Property Investment Trends in Indianapolis, Indiana 2010

 Like many Midwestern counties that are highly populated, Indianapolis (Marion County) has suffered a tremendous blow from the recent economic recession.  Foreclosures still seem to be mounting, and considering the great difficulty of getting a mortgage in this state, it has truly become a buyer’s market—for those who have the funding.  With short sales, discounts, and foreclosures popping up left and right, it’s a great time to invest in a property.  But, as always with great business opportunities, this one comes with certain risks and caveats.

      This past year, 24% of all homes sold in Indianapolis were foreclosures—pretty staggering.  Even more impressive, 16% of all new listings were foreclosures.  There is no shortage of cheap real estate to invest in right now.  Total sales in Indianapolis have dropped about 6% from 2007, and sale prices have gone down about 4%.  Due to the lower sale prices, homes tend to spend less time on the market (an average of 9 months, down from 11 previously). 

      All of these figures add up to one very sweet picture for the investor who has a bit of money to play with.  Short sales and discounts are everywhere, and all prices tend to be a bit low, so you can get a real deal on some properties.  The number of sales is down, which means there is far less competition in the buying market, making your job infinitely easier and less expensive.  And the time it takes to resell your investment tends to be less than before. 

      But before you jump right in with both feet, cash in hand, you should be aware of the climate and attitude of some financial institutions during these foreclosures, and you must be prepared for the financial burden of owning property in a slow market.  First, many banks and other lenders or previous owners are stripping these homes bare at foreclosure.  I don’t mean taking couches and TV’s; some are taking everything—sinks, baths, doors, you name it.  The point is, don’t get in line to buy a property that’s just walls and a roof unless that’s what you’re looking for.  Further, don’t be fooled by the statistic telling you it will take less time to resell your home.  That trend reflects the lower listing prices due to foreclosures.  If you plan to profit, which of course you do, your listing price will not be quite so low, and you can expect to spend a longer time trying to sell.

      So, it’s a buyer’s market in Indianapolis and a great opportunity to jump in when homes are cheap, but understand that you’re dealing with banks who want to get every penny back that they can from a lousy investment, and you’re more than likely dealing with a community that does not have as much disposable income as they are used to having.  Get into it understanding these facts: if you have the money, you can get a piece of real estate very cheap right now, but it will probably be very difficult to flip in a timely manner for the kind of profit you might have seen ten years ago.  Buyer’s market, but buyers beware! 

Tell us what you think. J