Indiana Real Estate Market: A 2023 Recap and 2024 Outlook

In 2023, the Indiana real estate market faced significant challenges, with sales declining by 14% compared to the previous year. The state also experienced a 25-year low in new listings, contributing to inventory constraints and a competitive market environment.

However, as 2024 began and the spring selling season approached, there were signs of improvement. Mark Fischer, CEO of the Indiana Realtors Association, noted that both buyers and sellers were returning to the market, driven in part by seasonality and favorable mortgage rates. The Altos Market Action Index showed a gradual increase in market activity since January, indicating a more balanced market.

One factor contributing to the uptick in activity was the relative stability in mortgage rates, which made it more appealing for sellers to list their homes and for buyers to enter the market. Fischer highlighted the importance of this trend, noting that it was encouraging more sellers to list their homes and providing buyers with more options.

However, inventory challenges persisted, with low levels of new listings continuing to be a concern. Kurt Schuler, a New Albany-based ERA agent, observed that most new listings were driven by life events, such as job relocations or changes in family circumstances. This trend, along with an increase in contingent offers, further limited inventory and put pressure on buyers.

To meet the demand for housing, new construction played a significant role in some markets, comprising a larger share of inventory than usual. Alfredo Diamond, a Better Homes and Gardens Real Estate First Realty Group agent, noted that while demand for new construction was high, builders were struggling to keep up, leading to delays in new developments.

Despite the challenges posed by low inventory and rising prices, Fischer remained optimistic about the outlook for Indiana’s housing market in 2024. He predicted a 7% to 10% growth in sales for the state, driven by strong market fundamentals and continued demand for housing. However, he emphasized the need for patience and proactive planning, especially for buyers navigating the competitive market conditions.

In conclusion, while the Indiana real estate market faced challenges in 2023, signs of improvement in early 2024 suggest a more positive outlook for the year ahead. With buyers and sellers returning to the market and favorable mortgage rates, Indiana’s housing market is poised for growth in 2024.