May 2025 Indianapolis Rental Market Update

Indianapolis Rental and Sales Market Report – May 2025

🏙 Rental Market Highlights

• Average Rent: $1,700 for single-family homes (⬆ 5.37% YoY)
• Vacancy Rate: 47 days on market (⬆ 4% MoM)
• Rental Insight: Days on market are elevated due to overpricing by new owners trying to cover high purchase/interest costs. Pricing realistically from the start reduces vacancy and protects returns.
• Apartment Market: 1,342 units available; average rent $1,109 ($1.50/sq ft)
• Condos & Townhomes: 141 units; average rent above SF homes; 46 DOM; $1.11/sq ft

🏠 Sales Market Highlights

• Average Sales Price: $256,785 (⬆ 2.5% YoY)
• Average Days on Market: 39 days (⬇ 27% MoM, ⬆ 14% YoY)
• Price per Sq Ft: $166 (flat MoM)
• Homes Sold: ⬆ 7% MoM, ⬆ 6% YoY
• Investor Takeaway: Over 6,000 homes sold under $250K last year — strong affordability continues to make Indy a top-tier buy-and-hold market.

💡 Behind-the-Scenes Insight

At Red Door Property Management, we see firsthand how investor behavior impacts days on market. Properties priced at or near market rate lease quickly, while overpriced homes tend to stall. Trust your local property manager to guide your pricing strategy — and reduce costly vacancy time.

🔗 Useful Links for Investors

• View Indianapolis Homes for Rent
• Explore Our Property Management Services
• Airbnb Management in Indianapolis

• Transcript Here

  
  

  
  

  📈 Market Report Introduction

  
  

   All right. We are going to get into your market report updates for May, 2025. We are getting into that segment now. All right, we're getting into our Indianapolis market reports, which I've already alluded to. Let's get this kicked off. Mike loves the Indianapolis market reports, so I'm gonna leave this one up to him.

  
  

  Let's, um, have you, have you scanned through any of these? Should we give any teasers? What are we gonna get into here? Do you, do you know? Have you looked? Uh, I have briefly scanned them. I haven't looked, uh, in detail, so some of this is gonna be, as we kind of start to analyze it, some of this is gonna be fresh, but I have looked at it.

  
  

  Um, I will say, I can't wait to see what your doom and gloom, uh, predictions are, are gonna come true or not. Well, let's, well then we're gonna start it off. We're gonna, we're gonna start it off right now. Okay. And so, as the last three months, uh, 'cause I've been trying to track this the last three months we've discussed this.

  
  

  Uh, Mike loves the doom and gloom. I do not, I have never once indicated that doom and gloom is coming. Uh, but I don't dunno. Maybe I did on the first time I mentioned this. I don't know, but, so, but without a doubt, uh, and I could have added this to our economic updates. Yeah. On probably should on the front of this podcast, probably should have at least mentioned it.

  
  

  But I know that we've just beat it to death over the last couple of months. And I'm pretty, I'm pretty sure they're, uh, the viewers are annoyed at watching us kind of fight back and forth on what's happening here, but. Without a doubt. If you're paying attention to the news, you know that we are still slipping more and more into, uh, and I hate to use this word, but more and more of a buyer's market prices are continuing to come down.

  
  

  Supply, uh, is, is getting higher and higher by the day. Uh, new, new home builders are starting to make, um, crazy incentives in order to attract buyers to. To pick up these homes that they've already constructed. Uh, I have, I have land that's already been developed all around me by these new home builders.

  
  

  And now, uh, but the homes being popped up on them have slowed down considerably. Yeah. Because the buyers just aren't there. They can't afford 'em. Yeah. Uh, so what happens when that's the case? Well, home prices start to. And again, I wanna be careful with this start to normalize, I guess is the right word.

  
  

  Yeah. Or I mean, potentially even come down ever so slightly. So the dynamic are changing. You're actually gonna see that in, uh, at least one or two areas here actually, I really do think, there's no doubt, uh, I mean, the chatter on the ground is that we are in a changing market for sure. Uh, whether or not that bleeds over here into Indy, you know, how much, how much of that here happens locally remains to be seen.

  
  

  I think what this is, is, um. Probably a little bit of like, Hey, we're looking in the past here in terms of like we're, you know, at least one month behind, sometimes 2, 3, 4 months behind in terms of this data. And other thing is that what we're seeing on the ground in terms of real time data. So I think that's, that's definitely part of it.

  
  

  Uh, the other part of it is, I don't think it's as bad here in Indie that maybe some of the other parts of the country, but let's take a look and let's, let's see what we got. That sounds good. And before we jump into that, let me just mention, 'cause I know that we have a lot of viewers who, who skip over the economic reports or the question of the week.

  
  

  Uh, Mike and I did not plan this wardrobe. Okay. So if you're just tuning in, I just had to mention it one more time. This is just by, uh, happened since, so this is not, this was not planned. This is, this is it. This is it. Okay. All right. Continue with Indianapolis. All right. Well let's, let's jump into the, uh, market insights, uh, for the rental data.

  
  
  🏙 Indianapolis Rental Market Update

  For Indianapolis. Okay, so, um, really kind of stable here. So, a number of homes on the market, 1147. That's up slightly, let's call it 4% month over month. That's, that's, you know, probably seasonality. So nothing to be concerned about there In terms of a 4% increase in number of active homes, no big deal. Uh, average rental price continues to creep up month over month.

  
  

  Just about a 1% year over year, 5.37%. I'm happy with that. If I'm an investor, love to just see year over year, uh, numbers go up. Uh, days on the market is a little bit disappointing. I will say that 47, um, is not, I. Terrible, but it's may and we should start to see that go down and that's actually going in the wrong direction, just ever so slightly 4%, uh, since last month.

  
  

  So I dunno, I'm just so sensitive to that because of last year it was so crazy. Yeah. I always keep an eye on that. And it is vacancy. Vacancy, you know, can kill your profits and so, such a huge number to watch. 47. Not, not terrible, nothing like you're gonna see in Westfield, uh, but um, definitely something to keep an eye on.

  
  

  Average price per square foot. Again, this is something that more you see in the multi-family, but we like to keep an eye on it here too. Price per square foot is a dollar 14 for single family homes. I. Um, ba ba ba and uh, then the next two graphics are apartments and condo slash town homes. So apartments, there's quite a few, quite a few apartments on the, uh, on the market.

  
  

  There actually more than single family homes, so 1,342, uh, apartments. Wow. With a significant, yeah, significant price difference or differential between the single family home. So 1109 is your average apartment rent here in Indianapolis in May. And that is a dollar 50 per square foot. Uh, condos and town homes is a decent amount of those 141.

  
  

  Average, uh, average rent price actually above single family homes, which is, um, I always find interesting and average days on the market. 46, pretty consistent with single family homes. And then, um, price per square foot for condos and town homes is a dollar 11. We got the three graphs there at the bottom for you to take a look at.

  
  

  I always just typically focus on the bottom left, one single family homes, but that looks like a healthy, um, a healthy. Price graph over time. I mean, year over year, it's, it's heading in the right direction, month over month. It's heading in the right direction. I mean, nothing crazy, just kind of slow and steady.

  
  

  And that's, that's what we like, that's what we like to see in Indy. That's what we expect out of Indy is slow and steady. And so, um, honestly, other than days in the market, slightly ticking up, this is, this is pretty positive news for Indy. Yeah, so good or bad, I'm gonna give a little bit of a behind the scenes look here, uh, for Red Door again.

  
  

  
  🔍 Behind-the-Scenes Insights from Red Door
  
  

  Uh, the, there's been so much new construction happening in the Indianapolis in surrounding areas that we, that I think play a major factor to the average days on market. Maybe not the Indianapolis areas much as maybe some of these outlying suburbs, but. Um, but so behind the scenes, without a doubt, it's our newer properties that we're onboarding that happen to see a few more days on the market than our ones that are turning.

  
  

  Um, that, that we turn right, that, that, that are turning the tenants moving out. We're remarketing the property. Uh, and the reason for that is a lot of these. New onboarding owners, they want to achieve the highest possible rent. Whether that's because, well, the current market, they're having to purchase these properties at higher price ranges.

  
  

  The current interest rates that they're acquiring these properties on, uh, in order to cover their costs, well, they have to market the property at a little bit higher rent. And this is, this is, this also goes back to our question of the week. So if you miss that segment, get back over there, check it out, uh, because there's information on how this is going to help, uh, and affect your vacancy rate during your onboarding process.

  
  

  But, uh, for those new owners. It's important to be listen to your property manager pri primarily me at this point where I have those discussions, uh, where this is the market rate. And I'm not saying you can't start a little bit higher than that market rate is indicating, but, uh, you gotta be a little bit more realistic on, on the front end in order to reduce that vacancy, which is going to reduce your.

  
  

  Uh, your financial exposure on the front end when you're trying to place a tenant. Mm-hmm. There's nothing wrong with teasing the market a little bit, but making quick decisions and reducing that price is going to directly affect this number we're seeing in your average days on market. And, and the reason I, I.

  
  

  Give this behind the scenes of the look because we don't see on average, uh, 47, uh, average days on the market. Luckily, now we do get, we do approach closer to that with some of our new properties, but luckily our market updates are able to keep that in check a little bit. Uh, but certainly the properties that are being turned, oh my gosh, we're smashing that.

  
  

  We are, we are way below that. It's, it's so, and, and I, and the reason I wanna bring this up is because when I see these average days on market at 47 or 52, I'm like. How is that market wide? Because that's not what we're seeing here at Red Door. It's crazy. It's, it's crazy different, I will say, uh, Chris, because I look at those numbers quite a bit, the average days on the market, and, um, it's really, it's really indicative of, 'cause I'm always asking, you know, well, why is this one still on the market?

  
  

  Why is this one's still on the market? Of course, because what we have, what we have is we have the vast majority of our homes, we churn through pretty quickly, and then we have. A couple, 2, 3, 4, 5, that stay on the market for a long time. That's right. And what it is, honestly, it's owners who are not responsive, who are not in tune with the market, who are not listening to our team to say, Hey, we're not getting leads.

  
  

  We're not, we need to reduce the price. Nailed it. Uh, and we had one example just this week, right? It was on the market for forever. Forever. Yes. Yes. And we finally got the owner to concede, um, uh, price reduction. And then boom, we leased it up, I think within three or four days. I mean, it was like.

  
  

  Instantaneously. Like obviously that was the, and we started like, we got three or four or five applications right after that. So I mean, it's you just, and that's what these market reports are for. Yes, yes. Is to be able to stay in tune with the market to realize that we're not just beating you down to, uh, take a price reduction.

  
  

  It's so that you are educated on the market where it is. We want you to know and feel a hundred percent comfortable with where the market is and make an educated decision. And that that's why we do these market reports. That's exactly right. And, and I'm not gonna beat a dead horse here, but it's, it's. Uh, I always go down these rabbit holes, uh, and it's, it's not just, we're not asking you for a price reduction, just for red door's.

  
  

  Uh, advantage, it's for, it's for yours. I mean, it's, it's a mutual beneficial effort here. Uh, and it's not, it can it sometimes be the marketing? Uh, yes. Very rarely, but not typically with the way that Red door is marketing your property. It's, it's not a marketing effort. If, if, if those things all, if those boxes are being checked, it's being distributed properly, you have professional marketing photos, which every property does.

  
  

  It's not a marketing issue, it is a price issue. All right. Alright, so, uh, let's, let's move on. I just wanted to mention that because these average days on market are sometimes shocking when I come across them. Totally. Alright. Alright. Let's take a look at the sales data for ind. There you go. Okay. Uh, days on the market for sales.

  
  
  🏠 Indianapolis Sales Market Update

  
  

  Uh, 39, which is, um, normally would be good. That is down month over month. Look at that. Down 27% month over month, but up, uh, 14% year over year. Uh, last year was crazy. Uh, so that, I don't know. Can't do that math real quick in my head, but it's probably, you know. Under 30 is my guess, which is crazy. Um, average price per square foot.

  
  

  166, unchanged month over month, just up slightly year over year. Average sales price, 2 56, 7 85, that is up ever. So slightly month over month, and then up, uh, two and a half percent year over year. So we're not seeing the, the decrease in price here in Indy, uh, homes sold again. Positive numbers here, up month over month and up year over year.

  
  

  Six, uh, 7% month over month and 6% more or less, uh, year over year. So not really seeing, uh, really any indicators here in the indie market of any sort of slowdown, any sort of price reductions. Again, it's not earth shattering. Nothing's through the roof, but we're not seeing. Any negative trends here yet in the indie market, slow and steady up and to the right.

  
  

  Uh, the price graph there kind of indicates that it's just, you know, steady Eddie there just, uh, up ever so slightly. Uh, and then the, uh, the graph there on the bottom right just kind of shows the, where the homes fall in terms of value and um, uh. If you're just tuning in, we always look at this. So there is a, a cap that we put on this.

  
  

  We look at this from the investor point of view, and uh, this is for homes that are under $500,000. So on all of these market reports that, that we're gonna go through today. All of 'em. Uh, when we run these numbers, we say, okay, only homes under $500,000. So that, that does, uh, affect the numbers. This isn't indie in total.

  
  

  This is indie in total under 500,000. So anyway, bottom right shows you where you can find those homes and it kind of gives you an idea of, you know, is this a value market? Is this a luxury market? And, uh, indie. Kind of is in between. It's definitely more towards the value market. We have a couple others that, that are definitely more value oriented.

  
  

  But indie, I mean, 2 56, I say this every month is such a crazy, affordable, average sales price. Uh, that it is just wild. And there's tons of homes in the, look at that. 3,600 I think is what it says, uh, in the under 200, another 2,500 in the under two 50. So you've got, uh, five, almost six more than 6,000 homes that sold.

  
  

  Last year under $250,000, which is incredible. Really attractive to investors. So, uh, you know, really good news both on rental and, um, sales data for this month for Indy. Yeah, and, and Mike, you're right, this is investor point of view, which doesn't play as much of a factor in the Indianapolis market as it does in some of these surrounding, uh, as you call 'em, donut counties, I think is what you said.

  
  

  Absolutely. But, so just to give you an idea, so some other numbers that I was thinking about kind of rattling off as we go through some of these. And here's one. So in, so in the Indianapolis, since we're talking about sales, the median, median home sale price, uh, in the Indianapolis area is 299. So 299 is the median home sale price, and we have it here as an average sale price at 2 56.

  
  

  So not far off even in your investor, uh, point of view. So these, these are pretty accurate numbers here for the Indianapolis area. Cool. Still affordable. Even if you take off the 500,000 cap, that's so affordable. Exactly. Yeah. It's exactly right. Yeah. Yep. Okay, good. Good for Indianapolis. Good for Andy.

  
  

  Let's move on. Alright, let's keep going.