Indianapolis, Indiana Real Estate Market

Is the real estate market hot or cold in the Indianapolis market?  Is it a buyer market or a seller market?  Is now a good time to buy or sell?  These are questions we get a lot.

NATIONALLY, the real estate market is sort of like the weather, raining and cold in some markets and dry and hot in others.   The real estate market is in a ‘real estate recession’ in some markets and in other areas the real estate market remains strong.  States that are getting hit the hardest, with prices declining and significantly increased inventory levels are Florida, Texas, Arizona and California.    The Midwest and Northwest Regions are the two regions that are doing the best.

Specifically, in the metropolitan Indianapolis market, the housing market is still considered to be a SELLER’s market.   The supply of homes on the market is appx 2.2 months.  Meaning, if no other homes hit the market, it would take 2.2 months to sell all the current active homes on the market. A SELLER market is considered 3 months of inventory or less.  In a seller market, Sellers have more negotiating power, thus driving pricing up and getting better terms for seller.   A more balanced market, not favoring buyers or sellers, is when there is 3 to 5 months of inventory.  Exceeding 5 months, the market becomes a BUYER market, which means the buyers have more negotiating power, thus driving pricing down and getting better terms.
Nationally, the real estate market is at 5 Months of inventory, a Buyer’s Market.
Indianapolis is 2.2 months, we are in a Seller’s Market.

Indianapolis Real Estate Numbers (August 2025)

# of Homes Active For Sale
Aug 26, 2025:  7,243
Aug 26, 2024: 5,947
Inventory of Active Homes is up 21.8% from last year

# of Homes SOLD (using past 30 days)
Aug 26, 2025: 3,222
Aug 26, 2024: 3,061
Number of Sold homes compared to last year is up 5.26%

*Single Family Home / Condo / Townhome (not land or farms) listed on BLC in MIBOR

Additional Stats:

• 22% of homes selling for OVER LIST PRICE  (down 5% from last year)
• 51% of homes have reduced their list price (up almost 9% from last year)

Summary

The Indianapolis housing market has cooled off in 2025 when compared to 2020-2024.  While it is still considered to be a seller’s market in the Indianapolis area, homes are staying on the market longer and price reductions are more common.  Generally speaking, homes that are clean, updated and nicely decorated are still selling very quickly and with many times with multiple offers.  Homes that do not present well in this market are lingering on the market requiring sellers to reduce their list price in order to attract a buyer.

The Look Ahead

Affordability is a significant factor with the interest rates continuing to remain high as well as the price of homes continuing to increase, the average person is finding it a challenge to afford a typical house payment.   We are optimistic right now, with the latest news of a slowing labor market, the Fed’s are likely to lower the interest rates. In fact, Fed Chairman, Jerome Powell’s comments last week indicated all but lowering rates in September’s meeting.   This news has already sent interest rates downward.  
With the increased inventory of homes for sale, buyers have more to choose from, creating less bidding wars and less pricing pressures, resulting in more stabilized prices.   In Indianapolis, we have seen in recent years some communities get over 20% price appreciation.  In 2025, home values have increased year to date appx 4.5%, which is more typical appreciation for the Indy market.

Important to note, it is always a great time to buy real estate, as long as you have a buy and hold strategy.   Anyone that has ever owned real estate and sold will look back at the real estate they sold and say, “I wish I wouldn’t have sold that, just look at the value now.” 

Lastly, the market you buy in, is the market you sell in.  So if you think you are overpaying, then you probably got over paid for your current home.  If you think you are selling your home for too low of a price, then you are probably getting a good buy on your next home.   Again, the market you buy in, is the market you sell in.

Derek Gutting