INDIANAPOLIS – As the pandemic gripped the nation, many industries were affected, including the housing market. While many businesses saw dips, sellers on the housing market saw dramatic increases.
This shift in the market meant over-priced homes, and for Indianapolis, it further highlighted an already existent housing affordability crisis.
FOX59’s Beairshelle Edmé found the three major issues contributing to the Circle City’s housing crisis.
“You either have to reduce the cost of housing or you have to increase income,” Hanson detailed.
But neither is happening right now.
Nationally, housing costs are skyrocketing. Apartment Lists found rental units are up by at least 16 percent in just the last year. Comparatively, units went up by about 3 percent from 2017 to 2019.
Those renters looking to jump into home ownership have found it’s a hot, high market.
The same can be said for homeowners looking for their next purchases, like Lauren Abdullah and her husband who got rejection after rejection on offers for Indy homes.
“It would be us and 10, 12, 40 offers at times going in, and then immediately you hear things like, ‘Full cash offers’ or ‘$50,000 over asking price’, things that we knew we couldn’t remotely compete with,” the 30-year-old newlywed and new mom detailed.
The Abdullah’s dealt with the same issues causing a housing crisis nationally.
“We knew that we needed to reconsider what was dream home right now,” she explained. “Maybe we couldn’t afford to get all the things we wanted in this home.”
Some homebuyers and housing advocates are reconsidering a lot in this market, and that includes if Indianapolis housing is affordable.
Asked if the city’s housing is affordable, one expert said, ‘Absolutely not! Not for individuals of low to moderate income.‘Amy Nelson, Fair Housing Center of Central Indiana (FHCCI)
Many Hoosiers are being priced out of Indy.
“Our average sale price is $255,000,” said Ashley Patterson, a managing broker with Liberty Group Realty. “The biggest challenge for buyers is how competitive the market is right now. It moves very quick. Our average day on market is five days.”
The real estate expert tells FOX59 that compared to other counties and states, Indianapolis’ interests rates and prices are low.
But is it low for everyone?
“The short answer is… depends on who you’re talking about,” Hanson said.
The affordable housing advocate explains Indy homes are often affordable only to Hoosiers with high incomes, upwards of six plus figures sometimes.
“So as recently as 2014, the median price for a home in Marion County was $104,000 and the median income was in the low $40,000, and so a median income at that time could afford a median-priced home,” he explained. “Fast forward to today… that’s ballooned to $220,000 so that’s a 115% increase in home prices, but incomes have not risen to that pace.”
There’s a second problem contributing to Indy’s unaffordable housing.
The Builders Association of Greater Indianapolis and the Metropolitan Board of Realtors recently found Indy’s underbuilding by 2,000 homes, which creates a greater demand than supply.
The executive director of Fair Housing Center of Central Indiana explains a third problem.
Amy Nelson says 19 percent of single, family homes are bought by out-of-state residents.
“They have been picking up those homes– homes that traditionally would have been bought by low-to-moderate-income individuals—and making all-cash offers and outbidding potential homeowners, switching them over to rentals at high price because we don’t have enough affordable rental housing either,” she detailed.
Those three issues combined lead to thousands of Hoosiers calling Indiana home, but unable to afford a house or apartment.
Nelson offers this solution, ” … we need to have a statewide comprehensive analysis on our housing policies.”
FOX59 uncovered a law adding to these three issues: inclusionary zoning bans. Indiana is one of a few states with these bans that prohibit cities, like Indianapolis, from requiring developers to include affordable housing in new projects.
Housing advocates FOX59 spoke to say something must change, but they remain optimistic.
While this trend has been long-term, trends evolve and they change, and while homeownership may not be achievable today based on what’s happening in the market, it may be 6 months, 9 months, a year, 2 years from now.Joe Hanson, Executive Director of Indianapolis Neighborhood Housing Partnership
Patterson agrees. She ultimately helped the Abdullah’s find and buy their new, Indy home.
“Indy is still a great place to purchase,” the Liberty Group Realty broker exclaimed.
She encourages Hoosiers to find a qualified agent who can help them navigate the market, noting she’s always taking new clients.
But until lawmakers and the housing industry find a solution, the reality is for many Hoosiers, the price tag for the American dream of a white picket fence, green lawn and beautiful home is just too expensive.
If you’re looking for tips on getting started on your housing search, here are 5 steps recommended by INHP!