According to Zillow’s annual predictions, Indianapolis will be the fourth-hottest real estate market of 2024, thanks to its solid economy, housing inventory, affordability and pent-up demand.
The top three spots in the ranking were Buffalo, New York, and Cincinnati and Columbus, Ohio. Overall, the Midwest, the Great Lakes and the South regions will get a lot of attention in 2024, according to Zillow’s study.
Indianapolis, which had 880,600 residents as of July 2022, offers a very strong and steady real estate market that attracts buyers looking for a more affordable lifestyle. It also boasts a strong labor market, adding 28,500 jobs in November 2023 compared to November 2022, according to data released by the Bureau of Labor Statistics (BLS).
Indianapolis is a hub for logistics businesses, including the world’s second-largest FedEx Express hub and the divisional headquarters for freight and transportation giant CSX. The city is also home to important companies in the pharmaceutical industry such as Eli Lilly and Roche Diagnostics. The No. 1 employer in the region is a hospital, IU Health, employing 23,187 people.
The real estate market
As of Jan. 19, there were 3,005 listed homes in the Indianapolis/Carmel metropolitan area, according to data collected by Altos Research. HousingWire Lead Analyst Logan Mohtashami said the inventory situation in Indianapolis is a little bit better than the national inventory levels, but still low historically. In November of 2019 the number of single-family homes for sale was at 6,000.
Indianapolis is more affordable than much of the country. In December, the median price of a home was approximately $330,000, compared to the national median of $403,714, according to Redfin. And the median days on the market was 56 in December , compared to the national median of 43.
Since November, the percentage of homes posting a price cut declined, reaching 45% of properties as of Jan. 19, down from 54.79% on Nov. 10, 2023.
“The market in Indianapolis is very cyclical,” Carrie Holle, Realtor and principal of the Carrie Holle Group with Compass, told HousingWire. “There is always a big slowdown between Thanksgiving and New Year. Things will pick up in the next week or two.”
Holle’s business was down about 10% in 2023 compared to 2022, which she attributes almost exclusively to elevated mortgage rates. In 2024, she is optimistic that sellers will sell and more buyers will come to the market, as there is a big pent-up demand.
For Mike Lyons, realtor and principal of the Lyons Team with Keller Williams, the impact of declining mortgage rates is already being felt.
“We are seeing more showings per listing, we’re getting more calls, inquiries per listing. The decline of the rates really activates the buyer’s market, especially the younger population, who tend to be more rate-sensitive,” Lyons told HousingWire.
Baby boomers and millennials are the most active segment of the population for real estate activity in Indianapolis, according to Lyons. He notes that many young adults return to Indianapolis after finishing college. As a result, parents are also eager to return to Indianapolis to be closer to their children and sometimes grandchildren.
“Wherever the kids and grandkids land, the parents, the baby boomers are following,” Lyons concluded.
Lyons is optimistic about 2024, especially if mortgage rates keep declining and new listings keep hitting the market.
“Indianapolis is a very affordable market, which attracts people from more expensive places,” Lyons said. “We’re usually in the top five, certainly the top 10 of most affordable major markets in the country.”
