Condo units few and expensive downtown

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INDIANAPOLIS, Ind. (April 5, 2016)-- Throughout downtown Indianapolis, construction cranes dot the skyline as crews on the ground are building retail, office space and lots of apartments, but professionals and empty-nesters looking to move to and own in the city’s central core may find themselves priced out of the market even if there was something to buy.

“They get down here and they love it,” said Joe Everhart of the Everhart Studio. “We’ve got plenty of rentals right now for folks to come downtown and stick their toe in the water. Unfortunately, we don’t have as many for them to purchase now as we have in the past.”

In 25 years of selling property downtown, Everhart said he’s never seen a housing market like this and a shortage of ownership possibilities.

“It's definitely a seller’s market,” he said. “We don’t see as many being built as could be. We hear a lot about a lot of the rentals that could be changed into condominiums in the future, probably in the next year.”

Downtown Indy, Inc., just released its annual report and forecast 3,300 apartment units, expanding downtown’s rental market by a third, will open their doors by the end of 2018.

“We are at 96.5 percent occupied,” said Catherine Esselman of Downtown Indy. “We’ve heard stories of recent college graduates who have had a couple job offers with Chicago, New York, Indianapolis, and Indianapolis has won out based on that affordability. They can live the life they want to live in Indianapolis without sacrificing anything.”

A 2014 report by American Community Survey found 50 percent of downtown Indianapolis dwellers above the age of 25 have at least a college degree while developers said that the annual average household income of residents moving into downtown apartments is $90,000.

Esselman said that developments such as Marietta on Mass will attract high-tech firms, with highly prized college-educated employees, to inject above-average salaries and vitality into downtown.

“We have also seen some new job growth. It’s a national trend of this urbanization,” she said. “People coming more to the downtown core.”

Realtors report that middle age suburbanites are trading in family homes that are now too big in exchange for downtown living, but the market, the options and the prices may not be what those shoppers were expecting.

“Most empty nesters and baby boomers have been on the good side of real estate for a number of years,” said Everhart, “and you’re going to find that when they come to closing or make an offer, especially if you’re in a multiple offer situation, the boomers are the ones who are paying cash. That speaks really loudly when you are competing with offers that are five, ten or twenty percent down.”

Everhart said downtown home values have climbed ten to 15 percent over the course of the last year and sellers are getting what they want.

“My average last year was around 97 percent, 98 percent of list-to-sale price,” he said. “You would not believe the number of things that are selling above sale price right now. It's pretty amazing.”

Everhart stood in the living room of a two bedroom condominium at the Villaggio at Page Pointe with a panoramic view of downtown, just down the street from Lucas Oil Stadium, where the current owner previously suited up on Sunday afternoons.

List price is on the unit is $700,000 and Everhart is confident the former player will get it.

“This condo unit has been on the market for less than a week,” he said. “We’ve had quite a few showings. It's got an excellent view of downtown and, from what we’re hearing from the feedback, I really don’t expect it to be on the market for more than about another week.

“We listed a custom home for $1,650,000 and it was gone in two days and we’re seeing that more and more.”

Everhart said realtors find there is a shortage of condominiums priced below $250,000 which could freeze even high-middle income buyers out of the downtown market.

“There is a supply and demand problem when it comes to condos in the core of downtown,” said Esselman, Downtown Indy’s real estate specialist.  “We are knowing that that is a sweet spot in that 250 to maybe 300 thousand price point. We’re talking to some single family builders figuring out does that work. Can we build that size? We know there is a gap in that market.”

Real estate brokers are confident that neighborhoods which ring the Mile Square, especially the old north side, will continue to benefit from investment and rehabilitation as buyers seek proximity to downtown living but will have to settle for home a short Uber ride away from Monument Circle.

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