INDIANAPOLIS—11/15/2016—Increased consumer confidence and an improving economy are just two factors that have driven a marked increase in the purchase of luxury homes in two of Indianapolis’ most affluent suburbs.
An analysis of MIBOR data performed by Kristie Smith, founder of real estate team Indy Homes, shows that Carmel sales over $500,000 have shot up 17 percent in the past year, while Zionsville homes at this price point have increased 11 percent. Overall, $500,000-plus sales in Central Indiana, which includes the 11-county Indianapolis metropolitan area, have improved by 9 percent.
Why the surge in luxury home sales?
“So many things have come together to create this perfect storm in the Carmel and Zionsville markets,” said Smith, a top-10 Indianapolis Realtor affiliated with Keller Williams Realty. “This convergence of factors is ideal, and really, anyone looking to buy a home can benefit from it, not just luxury buyers.”
One factor that Smith points to is the increased consumer confidence in the economy. The U.S. consumer confidence index, an indicator of consumers’ perceptions of business and economic conditions, experienced ups and downs throughout 2016 but peaked in September at the highest level it’s been since the onset of the Great Recession.
“Optimism fuels home sales,” says Smith. “And with President-elect Trump touting decreased taxes, consumers could have more money to spend on housing.”
Corporate headquarters bring good jobs and stability
Those in the market for a Carmel or Zionsville home have reason to be optimistic—the economy in Carmel and Zionsville is strong. Unemployment is low in both communities—lower than the Indiana average—and median household incomes are high (right around $108,000). With several corporate headquarters making their homes in these suburbs, well-paying jobs are a short commute away.
“In Carmel, we have Delta Faucet, CNO Financial and Allegion. In Zionsville, LIDS recently moved into its new headquarters, and DK Pierce, a biopharmaceutical consultancy, just broke ground on its facility in August,” Smith notes. “Corporate headquarters bring executive-level jobs, as well as well-paying jobs in IT, research and operations.”
Improving home prices in desirable communities
Home appreciation accounts for some of the increased $500,000-plus sales. With their top-rated schools, low crime rate and community amenities, both Carmel and Zionsville are very much in demand with home buyers. As a result, in 2015 home values appreciated 8.4 percent and 7.5 percent respectively, which means homes that were valued in the $460,000s in 2014 have been pushed into the $500,000 range.
“Home buyers tend to buy at the top of their price range, and many are willing to pay a bit more for the amenities and features they want in a home,” Smith says. “The payoff for those who buy now is that these homes are predicted to continue to appreciate in the coming years.”
Mortgage rates, now at an all-time low, make attaining a home that was once out of reach possible.
“Many in the mortgage industry are anticipating that mortgage rates for 30-year fixed loans will go up in 2017, so we see many clients buying now to get the most value for their money,” Smith says. “Even a small increase in the rate impacts your monthly house payment.”
While housing inventory remains tight throughout Central Indiana, Smith encourages would-be buyers to prepare for home buying season, which kicks off in late winter/early spring.
“Currently, there are about 300 Carmel and Zionsville homes listed for sale in the $500,000 and up range. But if you can’t find your ideal home now, don’t worry. Inventory will be replenished in the coming months as sellers put their homes on the market in the spring.”
About Kristie Smith: Yearning to flex her entrepreneurial muscles, Kristie Smith left her corporate marketing job in 2003 and founded Indy Homes. In just a few short years, Kristie’s focus on client service and great evidence-based outcomes built Indy Homes into one of the top real estate groups in Indiana. The team continually ranks nationally among all Keller Williams agents in terms of sales volume. Kristie is certified by the National Institute for Luxury Home Marketing, and in 2015 Indy Homes completed 168 real estate transactions and closed $46 million in sales.