Indianapolis Housing on the Rebound

Indianapolis has long been used as a test market for many companies such as fast food restaurants, snack food manufacturers and a variety of other businesses. Anybody remember the McDLT© and Olestra©? The reason those businesses use us as "guinea pigs" is the fact that Indiana is known as a "vanilla state". We typically aren't on the cutting edge of anything like the east and west coast states, and we are considered by those marketers to be representative of the average American people and aren’t subject to wild opinions.

Likewise, our real estate market follows along with that “vanilla state” theory. One thing my 12 years of real estate experience has taught me is that the Indianapolis housing market is stable and has been that way for many years. We didn’t see the massive price increases like the residents of Florida or California saw two and three years ago. However, we haven’t seen the massive price drops and the “bursting” of the “housing bubble” that those states are experiencing. On average, the Metropolitan Indianapolis area has seen a very modest two to five percent increase in house prices for at least the past 8 years. That is a general percentage as some areas have remained stagnant such as sections of Marion County, while other areas such as Zionsville and Noblesville have seen higher percentages. Ironically, the Zionsville area has very recently seen a larger drop in housing prices.

As long as Indiana remains a vanilla state, we won’t see the rapid price increases or price decreases in the housing market. Knowing that information, it came as no surprise to me to see that Indianapolis placed second in Business 2.0 magazine’s October ranking of the Top 10 cities poised for a housing turnaround. Dallas/Fort Worth was ranked number one. New Orleans, Atlanta, and Montgomery Alabama followed Indianapolis, with Memphis, Mobile, Austin, Houston and St. Louis rounding out the top ten. The magazine forecasts that Indianapolis will see a 5.6 percent spike in housing prices by 2009. Low unemployment, an influx of white collar jobs and ease of finding reasonable housing were all cited as reasons for the market rebound. The magazine went on to state that Indianapolis is “the nation's most affordable major metro” area.

That percentage spike is not a huge number, but is it very encouraging considering the state of the real estate market throughout the nation. In fact, many local real estate companies are already planning for this rebound. The Indianapolis Star recently quoted Donna Kreps, the general sales manager for F.C. Tucker (the city’s largest real estate company) as saying, “she (sic) credits the predicted turnaround to an increase in jobs in the area, more consumer confidence and lower interest rates.” She went on to say, “her (sic) real estate company is planning for an uptick in business – including increasing its recruitment.”

Again, this does not come as a surprise to me at all. I have been saying those things all along. Sure we are experiencing a mild hiccup right now in the market due to the mortgage predicament, but all of the indicators point to the fact that our city is ready to recover quickly. The doom and gloom seen on the national news about the poor real estate market may apply to other states, but Indianapolis has risen above those states. Now is the time to take advantage of some really great opportunities. Don’t let general news articles and reports, or uneducated opinions prevent you from jumping into that real estate investment arena. With desperate sellers and low interest rates, we are still in a buyer’s market. Buy now while the prices are very low, and sell later as the market begins to rise. What is your strategy for success? What goes down, will always find its way back up.