February 2020

Indiana Housing Market Vitality

forecast

Outperform

Indiana metro area house prices are forecasted to outperform the national market. Current local conditions support an estimated 7.8% increase in the next twelve months. Indiana’s housing market vitality, based on the fifteen metro housing markets which comprise it, is stronger than that of the overall U.S. and currently ranks the state as twenty fourth in the nation. Recent changes in local conditions suggest short-term performance will stay the same.

Housing Market Vitality

Housing Market Vitality summarizes the impact of economic conditions on future house prices. A value of 100 corresponds to conditions supporting current prices; values less than 100 correspond to a dampening effect; and values greater than 100 indicate a positive effect on house prices.  A housing market vitality value can be interpreted as a forecasted growth rate. Hence, a reading of 105.8 can be interpreted as a forecasted 5.8% annualized increase in house prices.

Indiana Metro Housing Markets

Indiana is comprised of fifteen metro housing markets that account for nearly 78% of the state’s population. The markets are unique in their demographics and local economies and exhibit trends that are distinct from the national or state narrative. Each metro market presents its own unique opportunity.

METRO AREA FORECAST US METRO RANK (/402)
Bloomington, IN Outperform 3
Cincinnati, OH-KY-IN Track 236
Columbus, IN Outperform 169
Elkhart-Goshen, IN Outperform 126
Evansville, IN-KY Underperform 329
Fort Wayne, IN Outperform 138
Gary, IN Track 161
Indianapolis-Carmel-Anderson, IN Underperform 189
Kokomo, IN Underperform 315
Lafayette-West Lafayette, IN Outperform 99
Louisville/Jefferson County, KY-IN Track 105
Michigan City-La Porte, IN Outperform 226
Muncie, IN Underperform 127
South Bend-Mishawaka, IN-MI Underperform 282
Terre Haute, IN Underperform 325

Industry Specialization

Indiana’s state economy is specialized in Manufacturing and Other svcs. Mining, Information, and Pro Bus svcs industry sectors are less important to the state economy compared to the national economy.

Industry specialization helps explain the differing impact of industry trends on local economies in contrast to industry composition which describes the structure of the economy. A Specialization Index value greater than 100 corresponds to the sector having a greater share of the state economy than it does of the national economy. Sectors with a Specialization Index greater than 120 characterize the local economy.

Demographics

Compared to the U.S., there is a higher incidence of poverty amongst Hoosier State residents and they have less purchasing power. There are more high school graduates and a smaller proportion of the population is college educated. Indiana’s population is comparatively less diverse than the overall U.S. population.

A Demographics Index value greater than 100 corresponds to the factor being more intense in the state versus the national average. Characteristics of the local population is a longer-term factor that influences the housing market.