Real Estate Experts List Buyers as Biggest Need in Indy Area
Indianapolis real estate agent Kristie Smith
After years of slow growth and low inventory, Indianapolis-area real estate agents say the current housing market presents an excellent opportunity for sellers, with sale prices on the rise and days on the market on the decline.
However, they say more buyers are needed to kick the resurgence into high gear.
Kristie Smith, founder of highly rated Indy Homes Team in Indianapolis, says the improving economy helped to make a big difference in the past year. “It’s been a breath of fresh air,” she says. “People who have been underwater in years past are getting to the point they can sell and move on to something else.”
The housing market in the Indianapolis metropolitan area appears to be emerging from a period of extremely low inventory of homes for sale, according to the Metropolitan Indianapolis Board of Realtors. Currently, the area has a 5.9 month supply of housing, with 12,764 active homes on the market as of July, the most recent month for which MIBOR statistics were available. The supply at the beginning of the year was 9,417.
“That’s the highest it’s been for quite some time,” says MIBOR president Janet Jernigan, who also owns Platinum Realty Group in Carmel. “We consider a 6-month supply to be a balanced market, so we’re approaching that point, but we’d like to see more buyers entering the market.”
In June, the average home sale price in the region reached $190,273. That dropped slightly to $183,359 in July, but the two months still represent the highest home sale values of the last decade, according to MIBOR.
Now, more buyers are needed, Jernigan says. “The big question is, what’s keeping buyers out?” she says. “Interest rates are great, but we’ve had them for some time.”
Did you know?
Hamilton County has the highest concentration of homes for sale at $1 million and up. Homes in Carmel are selling at an average of $341,697, which is second in the region only to Zionsville in Boone County.
Stephanie Evelo, co-owner of the Evelo Team in Indianapolis, believes the low interest rates create their own ups and downs in the real estate market, especially since many homeowners refinance their mortgages when rates are low. “People aren’t moving because they’re locked into such low rates,” she says. “Under 4 percent is just unheard of, so they don’t want to move.”
Rates won’t stay low forever, Jernigan cautions, pointing to National Association of Realtors Chief Economist Lawrence Yun’s forecast of an upward swing in 2015. “It’s a really good time to buy right now,” she says.
Evelo agrees. “We’ve come through a time when it was very challenging to get homes sold,” she says. “It’s a completely reversed market from what we’ve seen over the past five years. There’s just an improvement in job security and consumer confidence as a whole, which helps perpetuate real estate.”
Amenities make the difference
Jernigan says “hot buttons” for home buyers vary from year to year. While updated kitchens and bathrooms remain evergreen amenities, specific trends do change.
“Updated kitchens with granite countertops and new, stainless steel appliances are hot right now,” she says. “And in the bathroom, people are placing more value on a larger, walk-in shower rather than taking up space with a bathtub that’s rarely used.”
Highly rated Indianapolis Realtor Pegg Kennedy says local buyers also value leisure. “They want outdoor living spaces like a paver patio and firepit,” she says. “They’re buying a lifestyle of carefree, easy enjoyment.”
Larger garages also matter to home buyers, Smith says. “When you add up teenagers and wagons and bicycles, it reaches a point where a three-car garage needs to be non-negotiable,” she says.
Without a doubt, quality of schools plays a huge factor.
When Angie’s List member Sarah Noll moved back to Fishers from Fort Wayne in 2013, she brought along more than just her 3-year-old son, Luke; both her mother and her sister’s family purchased homes at the same time. They turned to highly rated Realtor Paula Smith of Leo Signature Realty in Carmel to make the arrangements.
“My mother got an Angie’s List membership specifically to find people in Indianapolis, and that’s how we found Paula,” Noll says. “She was so patient and understanding, and made great connections with my son and my sister’s three kids.”
Noll, who grew up in Fishers, says her family looked at nearly 100 houses during their search. Noll herself specifically wanted something close to downtown Fishers and in the highly sought-after Hamilton Southeastern School District, with 12 of its schools rated 4 stars by the Indiana Department of Education.
Noll says she closed quickly on the 1,900-square-foot home that sold for $156,400. “Paula was a real miracle worker,” she says.
Did you know?
If you’re looking to buy a house in the Westside ‘burb of Brownsburg, you’d better be ready to buy quickly. Brownsburg homes stay on the market for an average of only 57 days.
”Cold spots”? Not in Indy
Communities with city centers and walkable neighborhoods attract the most attention, Smith says. “The city centers are big, like downtown Zionsville, Carmel, Noblesville and Indianapolis, but you’re also getting these up-and-coming areas,” she says. “The greater downtown area is really booming. It might not be the expensive downtown people can’t afford, but you’re seeing pockets of little village-like areas, niches with walkability and a nearby grocery store.”
Smith cites Irvington as one such hot spot, and Kennedy adds that Meridian-Kessler, Massachusetts Avenue and Fountain Square also tend to draw interest. However, Kennedy also notes that downtown Indianapolis offers a less diverse menu of options beyond condo units and high-end homes. “There aren’t as many choices in the mid-range price of homes,” she says.
The walkability factor even extends to areas north of downtown that have been previously underdeveloped. “It used to be that people wouldn’t look south of 54th Street, but the growth of restaurants and craft breweries is drawing them toward more affordable, larger and rehabbed homes,” Kennedy says.
Did you know?
With high demand for condos around the Mile Square, Center Township sees some of the longest wait times to sell in the region, with homes remaining on the market for an average of 92 days.
Pat Haddad, owner of the highly rated Haddad Team in Indianapolis, says while certain segments of the Indianapolis metropolitan area are doing very well, she doesn’t consider any community to be a “cold spot.” “As more areas get developed, people have more choices,” she says. “Westfield, for example, has taken a slow but steady climb, with improvements on U.S. 31 and award-winning schools.”
Kennedy agrees, saying that the condition of the home has supplanted location in importance.
“The axiom used to be ‘location, location, location,’ and while that is true to some degree, I believe it has changed to ‘condition, condition, condition,’” she says. “The sellers who want to compete and get the strongest price either have continually done work on their homes, or they make improvements and updates to sell.”
A younger buying demographic may be to blame.
“A lot of people, especially younger buyers, don’t have the time, skills or money to improve their own house,” Smith says. “My dad was a super-handy guy and could fix anything at the house, but now people give a lot more time to their jobs, and when they’re home, they want to be off and recreate with their kids, not do handy work around the house.”
Shiny pennies sell quickly
Real estate agents say that while swift and high-dollar sales are certainly possible, they require serious advance work. The sellers who get multiple offers within the first few days are usually the ones who have put the most effort into preparing the home, including always-popular renovations to kitchens and bathrooms.
“It’s the shiny penny,” Smith says. “The key to selling your house is to make it a 10. If it’s nothing compelling, you get a revolving door of people who come in, come out, and go buy something else that looks more amazing.”
Kennedy says rehabbers often set the home prices in their markets by making a lived-in house look new. “Even buyers who say they want a fixer-upper buy a rehabbed home,” she says. “So sellers who want to compete and get the strongest price either have continually done work on their homes, or they make improvements and updates to sell.”
Did you know?
With its walkable area, new businesses, microbrewery and strong community, Irvington has established itself as a cultural center and attracts more buyers to rebab and remodel its historic homes.
In addition to younger families moving in, real estate agents say retirees are turning to the Indianapolis area for long-term relocation. Don Koller and his wife, Laura, moved to Noblesville from Salt Lake City earlier this year to be closer to their granddaughter, and hired Haddad as their agent.
The Kollers chose a ranch home, which had easy access to the nearby Dr. James A. Dillon Park. The 5,257-square-foot home in the Lochaven community, located on the southwestside of Noblesville, cost $585,000. “We really like the area,” Koller says. “The greater Indianapolis area is one of the more vibrant cities in this part of the Midwest.”
Don’t wait too long
While the future looks bright, local agents agree with MIBOR’s Jernigan that the historically low interest rates won’t last forever.
“While I am financially conservative, I wouldn’t scrimp on the size or price of house if it’s right for you,” Kennedy says. “If a buyer can buy a large enough house within their budget that they don’t have to move after their first child, they’ve saved the cost of buying and selling one home.”
If interest rates rise, that window to afford a larger home could quickly close. “If the interest rate goes up 1 percent a year for the next two years, first-time buyers who bought small might not be able to afford much of an upgrade in the size of their second house,” she says. “Interest rates are even more important than negotiating thousands off the price of a house.”
No matter the rates, MIBOR expects Indianapolis to remain a strong investment for years to come. “We’re in a very stable market, so our prices are slow and steady on an appreciation scale,” Jernigan says. “It’s a fairly safe investment for your money.”
Bottom line? The Indianapolis area offers home buyers big-city amenities at a lower price.
“To be in a city this size, with all that we have and our housing cost so low, you’re only spending a small percentage of your income on housing,” Smith says. “I feel like our market is going to remain stable for the next several years. As long as our local economy stays great, our housing market will stay strong. “