Indiana Real Estate Market: What to Expect in 2024 & 2025?

The current median home sale price of $265,100 is stable and rising steadily at 2.9% YoY. Moreover, homes spend only 20 days on the market. This indicates that the Indiana real estate market is pretty much competitive.

The average months of home supply are 2 months YoY. A market with fewer months of supply indicates a seller’s market. The number of homes sold was up 6.2% year over year. There were 7,814 homes sold in July 2024, up from 7,201 homes sold in July last year.

Despite the competitive nature of the market, recent developments, such as the NAR settlement, have caused some hesitation among sellers, leading to concerns about selling prices and agents’ compensation.

The NAR settlement has removed the buyers’ agent compensation and many MLSs have followed the suit. It will probably reduce the home selling prices. As a result, buyers will have improved affordability along with low mortgage rates. Here are some tips for you to sustain in the market:

• If You Are a Home Buyer: Homes for sale (22,810) are growing at 14.3%. Along with this, the expected drop in home prices can benefit you. The low interest rates at 6.1% to 6.6% are now in buyers’ favor. Also, you can request for seller concessions.
• If You Are a Home Seller: You can lock in Indiana’s current high home prices. The correction in the home prices is long overdue. In the wake of the NAR settlement, home prices may drop a little more. If you’re a seller, you can still make profits on home sale before prices potentially drop.

So, How Is the Real Estate Market in Indiana?

Balanced! The number of homes for sale increased by 14.3% in July 2024 compared to the previous year. After a recent drop, housing market has witnessed such growth. Other important facts are:

• Median Days on Market: The median days on market for homes for sale are 20 days, up by 3 days YoY. This trend suggests a high demand in the Indiana real estate market.
• Housing Inventory and Supply: As a buyer, you have more options now as the housing inventory is up by 14.3%. There are 22,810 homes for sale in Indiana, with an average supply of 2 months.
• Average Home Prices: The median home price in Indiana is $265,100. But, it is expected to decrease due to a rise in inventory in the latter half of 2024. The sale-to-list price ratio is 98.5%, down by 0.41 pts YoY.
• Home Sales: As per July 2024 data, home sales increased by 6.2% YoY! 7,815 homes were sold, compared to 7,201 last year.
• Average Rent Prices: Rental costs vary statewide. The median rent is $1,400 with YOY change at +$20.

Why Is Indiana a Seller’s Market Now?

The Indiana real estate market has a balanced inventory of homes for sale. Besides this, a steady increase in median home prices favors home sellers. Homes spend only 20 days on the market which depicts the competitive market. Let’s look at some more facts:

• Fewer Days on the Market: Homes are spending only 20 days on the market before going under contract. This is visible in metro cities like Melody Hill and Speedway where the average days on market are between 4 to 8 days.
• Multiple Offers on Homes: Melody Hill has got 91 and Speedway got 87 in Redfin’s Compete Score. It means the housing market in Indiana is very competitive. This suggests that many homes receive multiple offers, with some even selling without contingencies.
• High Sale-To-List Price: The average homes sell for about 1% above list price whereas hot homes sell for about 4% above list price. The average sale-to-list price ratio in Melody Hill is 102.0%.
• Homes Sell Above List Price: On average, 26.3%  homes were sold above list prices. However, in July, 42.8% of homes experienced price drops, compared to 35.6% last year. This trend indicates a gradual shift toward a buyer’s market.

Indiana Housing Market Predictions 2024

Here are the predictions for Indiana’s housing market in the remaining months of 2024 and 2025:

• Number of Home Buyers Will Increase: As inventory grows and homes stay on the market, more home shoppers are expected to re-enter the market. The historically high interest rates averted buyers in 2023. But the easing inflation and stabilizing rates will bring back house hunters.
• Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across Indiana YoY, reaching $265K in July 2024. Cities like Marion and Michigan have experienced a 29.4% and 61.7% increase, respectively, in median home sale prices YoY. It’s expected to grow even further.
• New Home Constructions Sales Will Increase: As per Building Permits Survey, 14,838 new private housing units were authorized, in July, 2024. Indiana’s housing market’s high demand will be served with the new constructions.
• iBuyers Will Continue to Make Lowball Offers: iBuyers like Opendoor and Offerpad, which once offered 104.1% of market value in 2021, now offer around 70%. Such lowball offers to sellers will increase opportunities for individual buyers.

Bonus Predictions: Buyer Broker Commissions Will Be Zero!

In a shocking turn of events, the NAR settlement has completely eliminated buyer agent fees from the MLS. Let’s understand its impact:

• Buyer Agents Will Be Affected: With buyers now responsible for directly paying their agents, many may choose to find their homes on their own. This may very soon render buyer agents obsolete.
• Seller Concession Will Increase: Without the obligation to pay buyer agent commissions, sellers might see increased requests for seller concessions and offline transactions. Additionally, builders are offering significant concessions to attract buyers, further influencing the market dynamics.
• Builders Will Compete More: Home builders are persuading buyers to buy new construction homes with mortgage buydowns worth $30K!
• Sellers May Offer Fees for Services: Sellers may offer at least 1%-2% fees to the buyer agents in order to sell their homes quickly. Increasing competition from builders may also cause sellers to pay extra fees to buyer agents.

Is the Housing Market in Indiana Going to Crash?

A housing market crash in the Hoosier State is unlikely.

Indiana’s cost of living is 8% lower than the national average. The average cost of living for one person in Indiana is $1,959.

Indiana has a high median household income of $62,743. Indiana’s unemployment rate was 4.0% in July, lower than the national rate of 4.3%.

The state benefits from a lower cost of living, a high median household income, and a strong job market. These factors contribute to housing market stability, making a crash in Indiana unlikely.

2024: Is it a Buyer’s or Seller’s Market?

Indiana real estate market favors sellers in 2024. (And buyers, too!). The market is expected to lean more in favor of the buyers in the latter half of 2024.

Home prices are rising slowly, and the number of homes for sale has increased by 14.3% YoY. Buyers now have more choices. With mortgage rates around 6.1%, buyers also have more purchasing power.

Consequently, more homeowners are likely to list their homes on Indiana MLS. The 8.1% increase in new active home listings in Indiana has brought back home shoppers.

So, whether you are looking for a condo in Greendale or a single-family primary home in Lawrence, you will find your dream home in the coming months.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

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