Indianapolis Metro Rental Market Report – April 2025
The Indianapolis rental market continues to shift in April 2025, marked by rising inventory, minor price softening, and transformative developments in local suburbs. Whether you're managing existing units or scouting your next rental investment, this month’s updates provide critical guidance for long-term strategy.
🏠 Market Updates & Economic Insights
📉 Price Reductions Hint at a Cooling Sales Market
There’s increasing pressure on home sellers to reduce prices to find buyers. While there’s no sign of a housing crash, we are inching toward a buyer’s market. Nationally, Zillow revised its 2025 forecast and now predicts a 1.9% decline in home prices—a sharp pivot from earlier optimism.
In contrast, Indianapolis remains resilient. Prices are expected to grow modestly thanks to steady demand and an influx of inventory, especially as the school-year homebuying rush approaches. However, homes that are overpriced or in poor condition are lingering longer, suggesting strategic pricing is essential.
📍 Submarket Spotlights
Westfield: $123M Downtown Transformation
Westfield is finally playing catch-up to nearby hubs like Carmel and Fishers. A newly approved $123 million downtown mixed-use development will include:
- 240 new apartments
- 56 for-rent brownstones
- 40,000 sq ft of office space
- 3-story retail & restaurant buildings
Westfield’s long-term rental potential is strong, particularly with Grand Park’s ongoing sports tourism injecting economic vitality. Investors interested in long-view growth should take note.
Lebanon: The Leap Project Scales Up
The LEAP Project in Lebanon is expanding rapidly with land plots ranging from 500 to 1,500 acres and interest from companies like Meta for potential data centers. This initiative, backed by Eli Lilly’s multibillion-dollar investment in advanced manufacturing, is positioning Lebanon as a future economic hub. The ripple effect could drive demand for housing and rentals in surrounding communities.
Fishers: Rental Cap Law to Hit in 2026
Fishers is making headlines by enacting a 10% rental cap law—effective January 1, 2026. This regulation will limit rentals to 10% per neighborhood, with a grandfather clause protecting properties rented before December 31, 2025. The law is expected to:
- Restrict future rental growth
- Drive higher long-term rent values due to limited supply
- Spur early investor interest before the cutoff
Now is a pivotal time to secure a rental property in Fishers to be grandfathered in under existing terms. This could deliver significant appreciation and rent premium in the years to come.
🏡 Investor Outlook
For rental investors, the window to enter key Indianapolis markets remains open—but narrowing in spots like Fishers. Increased inventory and softening prices offer near-term opportunities, especially in areas seeing major infrastructure investment like Westfield and Lebanon.
Looking for expert guidance on managing your rental properties? Red Door Property Management offers local expertise with a proactive approach to maximizing your investment returns.
🔗 Related Resources
Stay tuned for next month’s update as we continue to track how these policy shifts and development projects reshape the greater Indy rental landscape.
Transcript Here
Introduction and Overview
All right. We are gonna get into this month's economic updates. Let's jump in.
Real Estate Market Trends
Mike. As I mentioned in the earlier segment I come bare handed on this one, so I am heavily relying on you. Let me, you know what, while I say that, let me just hold the mic for just a few seconds longer and say that I do, the one economic update that I have is that all the news that I'm reading, and I'm sure you're gonna mention this, that's why I'm gonna slide in here first.
More and more houses are having to reduce their price in order to find buyers. So again, I don't think that there's any real estate market crash coming, not even close. But I do think we're gonna get closer to a buyer's market and all the news that I'm reading is leading in that direction.
But as I mentioned in an earlier discussion with you. Is that we probably have a backlog of individuals who are just waiting for this, a slight reduction in in the properties that are on the market or a even a, the tiniest reduction in interest rates for that floodgate to open, which will obviously prevent any further reduction in pricing of real estate.
There's if you're holding back on a purchase because you think there's going to be a major shift in home prices, that's not the right attitude right now because that's not going to happen. I do think though, that we're gonna see a slowdown in home price increases, and that's my economic update.
Mike, over to you.
Zillow's Housing Market Forecast
I actually, that is one of mine. And. It was actually a Zillow report. So Zillow kinda puts out these, projections for the year. And they recently kinda restated theirs. Saying that they are they are, they said they, Zillow makes waves last week issuing a surprise revision to their housing market forecast.
They now expect national home prices to decline over the next 12 months. This is a notal, a notable shift. Got a lot of investors asking questions. Is Zillow overacting, are experts on the same page? More importantly, is a buyer of market really forming. They're predicting a back in January, they were predicting a modest 3% increase in home prices through early 25.
By February, they revised it to 1%, 1.1%. In March they revised it again to 0.8%, and now they're calling for a 1.9% price decline in sales. So they're constantly revising it to show a downward trend That's at the national level. I will say, I think we should temper that for Indianapolis.
Indianapolis is never up and down. Yeah. Like the coasts and the sunbelt and all that good stuff. So I still think we're actually gonna see. Slight price increases. That's what we have been seeing. I believe that we are going to see, already are seeing a big spike in inventory already, which is interesting because really, kids are just getting outta school. Like my, I, my, my kids are out, like next week is their last week. And so that's this running to the bulls for everybody to buy and sell houses, is that, 'cause they wanna be, they wanna stay in their house for school.
They wanna sell it and they get back in before school starts again. So that's like May to August. And if we're already seeing a, an increase in inventory, you gotta think that we're gonna see even more in June and July. So I think that's coming. I think more inventory is coming.
But I do still think there is pretty good demand out there. So I think I've told you this before, I think we're gonna see. The good homes that are priced right, that are in good condition, they're still gonna sell quick. Then the ones that are either overpriced or not in great condition, I think those are gonna linger on the market.
That's where you're gonna see the price reductions. So that's the Mike Taylor 2025 Indianapolis Price, price prediction.
I love it. I love freaking love it. That's awesome. So I gotta be honest, what I heard, I stuck towards the front end of that. I heard that Zillow's been watching my podcast and that yeah they agree that there are price reductions on the way obviously.
All I got that's cool. And, sorry, go
ahead.
No, I was just gonna ask you what's what's next on the economic updates.
All right. I got two more. Actually, I got three more. Just do briefly one.
Westfield's Major Development Project
I know I always talk about Westfield, but there's just always so much activity going on at Westfield that it's hard.
They're just attention grabbing, so I. We'll just talk about this real quick 'cause it, it is a, it's a approved proposal of a major downtown development project. So it's gonna be a multi-use real estate development project in Westfield. It's moving forward. The city council approved it actually I think this week.
So it was a six to oh approval. It is $123 million project. It's calling for 240 apartments, 56 for rent. Brownstones, I think is like the up and down ones. 40,000 square feet of office. Three story building of retail and restaurant and a parking garage. So this is important because if you know anything about Westfield, it, it's booming and they have this tiny little downtown, but it's so far behind, like a downtown Carmel or the Nickel plate District in Fishers And Noblesville just announced they're doing one.
It's obviously the big trend everywhere is to try to redevelop their downtown. So in my opinion, Westfield is far behind in this. So it's good to see them. Bringing this forward. 'cause that downtown was, it's just disjointed. It's old, it's always under construction.
I guess it will be now for a little bit more, but at least there's an end in sight with a master plan in sight. So it's good to see that kind of make a little bit more of a cohesive structure over there on that side of on that side of 31.
Man, I gotta tell you I, I know our market reports on the rental side for the Westfield area are not always.
Stunning and shiny, but man, to get into Westfield right now seems like a no brainer with what they're developing there in the downtown area and what they're doing to the Grand Park area, which I think I'm most excited about the Grand Park. Maybe 'cause I'm biased. 'cause I have kids that, that have sporting events there every other weekend.
So I'm like, oh yeah it's so exciting. But I honestly think that brings. Great dollars to the market. A ton of people from in travel sports is just where sports are these days. It's not so much people, the local and people crazy
amount of money on their kids in travel sports.
Yeah. It is insane.
Exactly. Exactly. And the thing is that you want those people that spend that kind of money on travel sports to visit your community because guess what? They got dollars to spend Exactly. Exactly. Yeah.
That's just, we've said it before. The long term projection for Westfield is really strong.
Yeah.
LEAP Project and Its Impact
Let me share this with you, Chris. I'm gonna share my screen real quick. Gimme a second. This is 11 one and
Oh, okay. Okay.
I don't really wanna talk about the article. I'll mention the article, but that to me is not what it's about. To me, it was this it was this graphic here. And the article itself is, it's from IBJ for sale, IEDC, which is the Indiana Economic Development Committee.
I think they're the, they're buying up all this land to make this LEAP project, which is this big project. And they're selling off a couple lots because they're not using 'em and they're actually getting, they audited because the governor thinks that maybe they spend a little bit too much money, all that.
Anyway, that's not the point of the story. The point of the story is we always talk about it, but I want people to get a sense of how. Huge. This is, can you see my screen, Chris? Yeah. Yeah. I got here. Okay. So this is the kind of the LEAP project you can see up top here. Is Lily. I don't know how many acres that is, but I wanna highlight.
How big of a area this is. You look down here, this is a 1500 acre plot of land. This is a thousand acres. This is another 800 acres, another 500 acres. The yellow is gonna be mixed use slash what they call village center, which I'm assuming is, mixed, retail office, that kind of stuff.
So that's six, six eighty five hundred, a hundred and thirty, three hundred and ten acres. Just look at how huge this area is. So I know we've been talking about it a long time. I don't think we've ever had a graphic like this to explain. What big of a project this is now, this is like manufacturing and stuff like that, but it's just such a huge development.
It's gonna have such an impact on the community. And I think I just read, and I can't remember if I knew this or not, but I think meta, Facebook meta, they signed like a letter of intent to do something here as well. So there, there's just a ton of momentum for this project.
Yeah.
I just wanted to share this because I thought a cool graphic.
Yeah, a couple things. So I think that Facebook thing, I think that's data center that they're trying to, oh they're trying to put those data centers everywhere. In fact, they tried to put one here in McCordsville, but I think they're on their way to kiboshing it. The local citizens like no data center, but yeah.
But back up a little bit here and explain, so you're right. In a previous podcast we've discussed Lily coming into the Lebanon area. Yep. What do you know? What do you know about that? What is Lilly doing here in the area?
I think it's just an advanced manufacturing and I, if I'm not mistaken, I think it's their oh, what's their their version of Ozempic?
The, Oh
yeah. GLP ones or, yeah.
Yeah. I think that's what it is. I could be wrong about that. But I also know is they're investing billions and billions of dollars in this yeah. In this area. And that's massive. It's insane. That's huge,
man. Yeah. I'm so glad you showed this graphic 'cause Yeah that's incredible.
It really helps get some perspective when you can actually see it. Yeah. Right there. Scale in map format. Scale is crazy. Yeah. That's insane.
Fishers Rental Cap and Future Prospects
Alright, the last one I wanna talk about, and this kind of a revisit of what we what we already talked about, I think we talked about last month, but the fishers.
The city of Fishers passed like eight to zero or nine to zero to put a rental cap on on rentals starting January 1st, 2026. And there was a part of that article that said the simultaneously, or right at the same time, the state was trying to pass something similar to basically block that from happening to block all future communities from doing that.
And actually this morning. I was in a meeting and talking to the person presenting was the the lobbyist for the realtor commission. So she's very in tune with what's going on at the State House in terms of passing laws and all that kinda stuff. And we talked about this at length. And she said this is gonna be a big a big issue for them in 2026.
And, I asked her about Fishers specifically, I said what's, what's up with the state law? Can you roll back what Fishers did? And she said we're definitely gonna try. She said, but it's, it is a a big mountain to climb. It's very difficult to go retroactive once something has passed.
And
of course,
over overrule a what a city has already done. So they're trying to get something in place quickly so that other cities and towns can't do this because the realtor. The Realtor Foundation, or sorry the Indiana realtors are in agreement that this is not a good thing for for the community.
So they are definitely anti rental caps, but the reality is that this could catch on kinda like wildfire. We're already seeing Carmel talk about it. She's hearing rumblings of Westfield and Noblesville already talking about it, so there is a chance that. Those guys could also pass something before the state of Indiana could get something in place, which would have a huge impact.
So I think the sail has, or the ship has sailed in Fishers. It sounds like that is a done deal, so locked in. Yeah, I think it's locked in. Unless there's some sort of lawsuit or something that, that overrules it, which, is obviously possible. But that is that's a big deal. Honestly, if you're looking at fishers, really for me has just ratcheted it up in terms of its level of desirability because you will be grandfathered in if you own a rental home before December 31st, 2025, you'll be grandfathered in. You won't be subject to these 10% premiums, which is so that means there's gonna be no more than 10% allowed in any community except for these ones. I know, it's crazy. It's like a it's like having a liquor license, you know what I mean? There's only so many that you can have. That's a good point. It may not have an effect year one or year two, but as these, as people sell off, if you can hold these things for 2, 3, 4, 5 years, rents are only gonna go up.
I would argue that rents are gonna go up at a disproportionate level in Fishers because of the limited supply. So the only d to,
if you have a liquor license though, it's transferable to the next owner.
Yeah. Okay. Maybe not the best analogy, but,
alright. Yeah, just wanna be clear everyone, short supply, they're what?
Oh my God, they're in short supply. Okay. Alright. Yeah. So once my understanding anyway is yeah, once that owner sells or anything, they, that, that property doesn't retain the right of rentability. That's
my understanding as well. You will be grandfathered in as long as you own it. Once you sell it, it is not transferrable.
That kind of grandfather clause then. Then dies. But that's my point is if you can hang on for two or three or four or five years, if you have a long-term strategy, which I do I wanna own this thing for 10, 15, 20 years, and if I own this thing in 10 years and there's still that rental cap in place, I gotta believe that I'm getting way more rent than I would've otherwise had there been no rental cap.
So I, I just wonder with a 10%
cap. I've, because I just, I assume as I spent more time thinking about this, I assume that will later evolve into a permit process. It probably has to in order to track the 10% of a neighborhood. I think that's part of the plan, which then would. Oh, is it?
Maybe. Okay, so it already is, which will come with its own associated fees. So Fishers, the town of Fishers, will probably end up securing some revenue during this process as well. I'm sure they'll make it a money maker.
They do it in Indianapolis. It's a joke and it's yeah.
I dunno, 10 bucks or something. I'm sure Fishers will make it more painful. I'm guessing a couple hundred, but it's nightmare to administer. So yeah, that, that's already in my understanding that's already part of the plan is that you'll have to have it registered by the end of the year as a rental in order to have that grandfather.
And then there's of course gonna be a registration process so that they can keep track of, the 10%.
Yeah. Okay. Alright. Alright, as we wrap up the segment, I am curious though early on you mentioned that you have a desire to move into the Fishers area. So what's pushing you guys, I'm curious what's, what pushed you guys in that direction?
There had to be something that was pulling you in was it the downtown nickel plate district, which is freaking awesome.
No, I don't wanna live there. I just wanna get another rental there. I wanna buy a rental there. I don't wanna live there. Honestly, I couldn't deal with the traffic.
Oh, okay. Okay. I couldn't deal with the traffic person, se Oh okay. No.
Yeah, I know. Yeah. Which, they're actually, they're working on that right now. I think that's going to, I think that's gonna improve considerably. Yeah. Okay. All right. So then I misunderstood previously, so I thought you were looking for a personal home in the Fisher's.
No. Looking for another rental, actually shortcoming, so we're not hanging out. No, sorry. Okay. All right. I guess my future dreams are now a bust, but that's fine. That's gonna wrap up the economic mike. Thanks for bringing all that delicious data with Westfield and Fishers and what's happening in these local communities.
That's gonna wrap up our economic market updates for the Indianapolis metro area.
