Indianapolis Indiana Rental Market Update February 2023
Hey, guys. Mike Taylor, broker Owner, Red Door Property Management. Today we are excited to bring you the March 2023 rental market report for Indianapolis. So, it is March where winter is pretty much behind us. It is Indiana, so we'll probably get another couple snows in here. But it is for the most part behind us. And we are looking towards spring and summer, the height of the leasing season. So, we're not quite there yet. And this is going to be for February. These numbers are going to be for February, of course, because we're looking a month back. So, if you recall going into the end of last year and then actually even in January, we did see a pretty good decline in rental rates from its peak in July. And then last month we also saw a bit of an increase in days on the market. So, it was a little bit of doom and gloom last month. So, let's take a look at the numbers for February and see if it's a continued doom and gloom or if there's a bit of a bright spot.
Okay, so let's take a look at the numbers for February, 2023 for Indianapolis. As I mentioned in the intro last month, January really the whole half, second half of 2022 and the beginning of 2023. We've seen this pretty good decrease in price off the peaks, and I think I said July, but it looks like it was August. So, peaked up in August and then has had a slow rundown, actually a quick rundown into December and then January even further. February does have, if you can see here, a teeny bit of actually an increase here. So average rent up slightly 1.9% from January of 2023 to February of 2023. Now, we always get a little bit of a glimpse into the future and so we are seeing that arc go back down a little bit. So, we'll have to see what the numbers bear out in March to see what these final numbers are.
Average days on the market
But I am a little bit concerned, honestly, for Indianapolis because this continues and these days on the market are creeping up. It's very concerning. 60 days on the market is a lot. Look at the year over year and the month over month changes. So, from last year, last year was a crazy good market, but look at this, it's up 93%. So, it's almost double what it was last year, and it's up 40% from last month. So, that's not heading in the right direction. That is concerning to me. What's interesting is if you check out our other videos, if you look at like, Fisher's, Westfield, Noblesville, Greenwood, it's all super wild across the board. The numbers are just not meshing. It's not like the market is moving in one direction. It's kind of like Indianapolis is maybe moving in a downward trend and most other markets are trending up in terms of average rent. So, we're definitely getting mixed signals all over the place. I think until we really get into April, May, June, into the height of the leasing season, we aren't going to know for sure. But if I had a home in Indianapolis, I would be inclined to reduce my price sooner rather than later. Lock somebody in for this leasing cycle and then reevaluate, because what I would be fearful of is these days in the market is at 60. That's really high. You can see people maybe starting to do some price reductions. I wouldn't want to see a race to the bottom. And then if you react late, let's say it was 1395, next month is 1370, 513, 50. And then if you're holding out for your one price that you want to get, you then have to reduce even lower than that. So, it was me. I'm reducing quickly to try to get somebody in there for this cycle, lock them in, and then reevaluate next year, hopefully once things are stabilized, because the economy is just wacky right now. So, I would want to get somebody in there ASAP.
So, 1677 homes on the market. Sorry about that. I just kind of launched into average price, but 1677 homes on the market. We already went over days on the market. So again, that's up almost 100% from last year, up 40% from last month. Definitely heading in the wrong direction.
Average rent for Indianapolis, 1395, down slightly from last year and then up slightly from last month. So, some mixed signals there. Again, we just kind of show you where the price range of homes, the volume of activity is here in the marketplace, so they're anywhere from 500 to 7000. However, the bulk of the market here in Indy is this kind of like 800 to 2000.With most being in, that 800 to 1500, which makes sense because the average is 1395. So, it makes a lot of sense, but that's where the volume of the activity is.
And then the last thing we like to talk about is absorption rate. So again, this is if we stop putting homes on the market, how long does it take to run through our current inventory? We're at 1.4.That's a very balanced market. So that's a good number. That's not going out of control. That is good days in the market is concerning to me.
Median rental price over time
Average rent is concerning to me. This little blip, little future looking in March. But so far, we've basically just seen a steep decrease from its peak in August. So, we'll have to wait another month or two to see if we see some signs of recovery in terms of average rent. But it is a little bit concerning right now, so it is a wait and see. Kind of too early to call, but if you have a vacant home out there, I would encourage you to probably look at a price reduction, try to get somebody in there as soon as possible.
So that's it for the Indianapolis Market report for February of 2023.Check out our other videos because they are crazy different. So, we do a Fisher's one, we do a Noblesville one. We're doing a Greenwood one this month. We're doing a Westfield one, Westfield One this month. So, like and subscribe our YouTube channel so you can stay up to date on what's going on with Indianapolis Property Management.