How To Navigate Indy’s Overheated Housing Market
In 16 years as a Realtor, Will Lonnemann of F.C. Tucker has never seen a seller’s market like this before. Reasonably priced homes have dozens of offers and are pending within hours of listing. “Most buyers are offering as-is and willing to pay thousands above the appraisal price if it’s low. Some are waiving inspections altogether,” Lonnemann says, though he doesn’t recommend the latter.
Indiana’s average sale price is up 9.8 percent from last March, with homes selling at 99.8 percent of list price. Buyers are armed with cash and piling on incentives to sweeten their offer—from paying all closing costs to allowing the seller to remain in the home rent-free for months. Realtors are seeing no-cap escalation clauses, which means a buyer will beat the highest offer by a certain amount with no ceiling. The craziest offer agent Traci Garontakos of Encore Sotheby’s International Realty has seen? A buyer willing to pay $100,000 over the listing price.
Garontakos believes the red-hot market is the result of a perfect storm: The pandemic shifted us to a remote workforce, sent city dwellers flocking to the suburbs, and inspired empty-nesters to delay downsizing. “Changes in our nuclear family needs, coupled with the lowest rates we have seen, are factors working together to create inventory shortages and increased sales prices,” she says.
People are itching to move, but the houses aren’t there. F.C. Tucker agent Kelly Huff recommends that buyers curtail their expectations and consider lower-priced homes to allow for appraisal gap coverage or making their own repairs. Patiently waiting for the right house, though difficult, will prevent potential buyer’s remorse.
Central Indiana’s average sale price is $260,000. However, the shortage isn’t limited to a specific price range or area. Hoping to find a sweet spot somewhere in the city that’s chockful of inventory? No chance. While the downtown market is a little slower, it’s not actually slow—homes are selling in a couple of weeks versus a couple of days.
There is hope for house-hunters, though. You just have to be ready to pounce, and with only one shot, an experienced Realtor is key. He or she will know how to follow the rules in a listing to a T, which are now specifying how long offers will be accepted and when a decision will be made. “That’s kind of new,” says Laurel Brown of Keller-Williams Indianapolis Metro North’s LyonsLink team, who also stresses the importance of a “clean offer that doesn’t ask for too much,” like for sellers to leave furniture. “An expert real estate agent can look for outside-the-box situations, like homes that are off-market. They can approach the owners to ask for a one-time showing. That’s where we’re at now,” Brown says. And about those love letters buyers sometimes write to try to connect with a seller on a personal level? They must meet Fair Housing Act standards, another protection a Realtor can ensure.
While selling your home for top dollar is enticing, you’ll be wading out into the same market to find your next abode. There’s a shortage of rentals (particularly three-bedroom apartments) and massive delays in new construction. Still going for it? Grab an umbrella for this storm. If rates remain low and the economy strong, the market isn’t expected to slow any time soon.