Craig Bartels interviewed in article about Indianapolis Rated Best Place To Invest In U.S.

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Indy Top Rated

Indianapolis-Carmel, Ind.

The Indianapolis-Carmel metro area was the most populous of the markets chosen. The area's population jumped 15.2 percent between 2000 and 2010, to nearly 1.8 million people, according to the U.S. Census Bureau. By comparison, the U.S. population as a whole rose 9.7 percent in the last decade.

"If you're looking at market trends on a positive side, certainly a growing population is hard to argue with. It will funnel through the first-time-homebuyer segment of the economy or push rental rates up," said RealtyTrac's Rick Sharga.

SmartZip, which contributed population, job growth, home-price appreciation and ROI projections data to this report, predicts the metro area's population will rise 8.6 percent over the next 10 years, somewhat higher than average.

Indianapolis-Carmel's unemployment rate was 8.1 percent (not seasonally adjusted) in March, compared with 9.2 percent for the nation as a whole. The rate fell by two percentage points year-over-year — compared with a 1 percentage point decrease for the U.S. overall. Ten-year projected job growth for the area is 14.9 percent.

As a state capital, the area's largest employers are the federal and state governments. Several health care-related companies and universities are also among the area's top employers, including Eli Lilly and Co., Clarian Health, St. Vincent Hospital, Indiana University and Purdue University.

Indianapolis-Carmel had the lowest sales price of the chosen markets in fourth-quarter 2010, at $106,000, and the highest affordability, with 93.5 percent of homes affordable for households making the median income. Indianapolis-Carmel has been the most affordable housing market in the nation almost continuously for the past five years, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index, a national affordability index.

Craig Bartels, broker-owner at The Indy Realty Shop in Indianapolis, said about half of his brokerage's clients are investor buyers, and about 30 percent of those investor buyers pay in cash. Distressed properties, including short sales, account for 75 to 80 percent of his business.

"(We) have determined the main things favorable to investors are cash flow and price-appreciation potential. A $100,000 investment will yield a newer, single-family home that rents for approximately $1,200 a month. This can't be found anywhere else in the nation," he said.

While the area's projected 10-year home-price-appreciation rate was modest relative to the other chosen markets, at 24.3 percent, Indianapolis-Carmel had the highest projected 10-year ROI of the chosen markets: 300.9 percent.

The ratio of median total cost of ownership to the median rental cost of property in the metro was the lowest among the 10 markets: 0.79. According to SmartZip, a ratio of 1 implies that it costs the same to own or rent a property in the metro; a ratio less than 1 indicates it costs more to rent and is therefore better to own; and, a ratio greater than 1 indicates that it costs more to own and is therefore better to rent.

According to HotPads, Indiana's median rental price rose 6 percent between April 2010 and April 2011.

Indianapolis-Carmel is relatively steady in terms of home prices. It was the only chosen metro area to see its median sales price remain completely flat year-over-year in fourth-quarter 2010, though its median listing price has fallen somewhat lately.

"Unlike other areas of the country, the Indianapolis area has not experienced the huge price fluctuations and price drops, such as (those) in Las Vegas, California and Florida," Bartels said.

Indianapolis-Carmel, Ind. Metro U.S.
Population (2010) 1,756,241 308,745,538
% ch. population (2000-2010) 15.2% 9.7%
10-year projected population growth % 8.6%
Unemployment rate (March 2011) 8.1% 9.2%
% pt. chg. in unemployment rate (March 2011 vs. March 2010) -2% -1%
10-year projected job growth % 14.9%
Median sales price (Q4 '10) $106,000 $175,000
% ch. median sales price (Q4 '10 vs. Q4 '09) 0% -2.8%
Median list price (March 2011) $134,900 $189,900
% ch. median list price (March 2011 vs. March 2010) -3.6% -4.8%
Projected 10-year appreciation % 24.3%
% homes affordable at median income (Q4 '10) 93.5% 73.9%
SmartZip Affordability Index 188
Total cost of ownership/rent ratio 0.79
Share of foreclosure sales (Q4 2010) 19.7% 26.5%
% ch. share of foreclosure sales (Q4 2010 vs. Q4 2009) -20.1% 4.1%
Average foreclosure discount (Q4 2010) 27.4% 28.2%
% active loans noncurrent (as of March 31, 2011) 12.3% 12%
% active investor loans (as of March 31, 2011) 5.1% 5.5%
SmartZip InvestorScore 62
10-year return on investment (ROI) % 300.9%
Median age of inventory on in days (March 2011) 93 108
Search ranking on (March 2011) 54
Walk Score 36