Top 4 Best Real Estate Markets in Indiana 2021

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Summary: In this article learn about the top four best real estate markets in Indiana in 2021. Topics include the current state of Indiana’s economy, Indiana’s real estate market, housing trends in different markets and the best places to invest in Indiana.

Table of Contents

Introduction

Indiana’s state motto is “the crossroads of America.” It’s located in the Midwestern United States and Great Lakes area. It’s the 17th-most populous state in the country and home to more than 6.7 million people.

The economy of Indiana today is made up mostly of manufacturing, services and agriculture. The northern region is in the industrial belt spanning from Pennsylvania to Illinois. In Central Indiana, agriculture is the main economic activity as it’s nicely situated in the Corn Belt between Nebraska and Ohio. 

The Hoosier State is home to a huge international airport attracting millions of people annually. It has a huge offering of both professional and amateur sports and annually hosts the Indianapolis 500 (the biggest one-day sporting event in the world). Indiana has activities for the outdoor enthusiast, family-friendly neighborhoods and cities rich in culture and diversity.

The cost of living in Indiana is also well below the national average and housing is relatively affordable–depending on the market. However, along with the rest of the country, Indiana is experiencing a shortage of affordable housing. Because of this shortage, it becomes even more important to focus on the markets that are still affordable, growing in population and have plenty of jobs.

So, is Indiana a good place to invest in real estate? Find out what’s happening in the largest cities around the state and discover which real estate markets offer the best opportunity for a return.

The Current State of Indiana's Economy & the Impact of COVID-19

A global pandemic inherently comes with short-term and long-term impacts. Indiana and its economy are no exception to those impacts. COVID-19 resulted in huge job losses around the country, including throughout many parts of Indiana. 

The industries impacted the most have been service and hospitality, business and financial services, health care and more. Naturally, the larger cities in Indiana that have been impacted the most by the Coronavirus pandemic and subsequent shut down.  

Indiana’s total GDP is around $380 billion and has been on a constant upward trend in previous years. Even with the enormous job losses, the state is slowly but steadily recovering and adding jobs back.

The Indiana Real Estate Market in 2021

4 Best Places in Indiana to Invest in Real Estate

There are a number of major cities throughout the state of Indiana that are strong markets for investing. The four metropolitan areas we are going to cover in this article include, Indianapolis, Fort Wayne, Evansville, and South Bend. These metros are the largest and most populated in the state.

Infographic Highlighting - 4 Best Places in Indiana to Invest in Real Estate 2021

1 - Indianapolis Metro Area

One of the very best real estate markets in Indiana is the capital city of Indianapolis. But knowing where to invest in this metro area with 1.8 million residents, isn’t as simple as finding a nice home. Knowing which neighborhoods to invest in can make the greatest difference (hiring a good property management company is also a huge factor in your success–learn more about that here).

Within large real estate markets are a bunch of smaller sub-markets. And because we know that markets can vary greatly between nearby neighborhoods, looking at suburbs and towns surrounding large cities can make for the best housing markets. 

The following are 10 sub-markets of the Indianapolis metropolitan area.

Anderson

About a 50 minute drive from Indianapolis, Anderson has a population of over 55,000 people. About 42% of people in Anderson are renters. Average rents are $715 per month. Average home values in Anderson are $78,036. In the last year, values have gone up 14.7% and are predicted to increase another 9.7% in the next year. 

The Leading employers in Anderson include, Carter Express, Community Hospital of Anderson, Harrah’s Hoosier Park Racing, and St. Vincent Anderson Community Affairs. Health care is a big economic driver in this area.

Middletown

Middletown is a smaller town near Anderson and about an hour’s drive from Indianapolis. The average home price is nearly $139,000 and has increased 3.5% since last year. A 7% increase in home values is expected over the next 12 months and Middletown’s average rents are $793 per month.

Daleville

The town of Daleville is in Delaware County, next to Anderson and about 20 minutes from Muncie. The average home in Daleville is just over $98,000. Well below the national average, Daleville homes have increased 7.3% over the past year and are expected to go up 8.8% in the next year. Average rents in Daleville are also super affordable, around $600 per month.

Chesterfield

Chesterfield sits between Daleville and Anderson. The average home price is just over $83,000. In the last year, the value of homes have increased by 9.7% and is expected to go up nearly 9% within the next year. The average monthly rent in Chesterfield is about $600 and residents enjoy a low cost of living.in

Martinsville

The population of Martinsville is about 12,000 people and is located 30 miles Southwest of Indianapolis. Martinsville is a more rural area with average home prices of $189,000. Since last year, the value of homes have risen 11.6% and are expected to go up another 8.7% in the next year.

On average, monthly rents cost $675 in Martinsville with 41% of households occupied by renters. Compared to other cities in the area, Martinsville is low and very affordable.

Arcadia

Arcadia’s motto is, “Where small town America still exists.” Located just 50 minutes Northeast of Indianapolis, home values are around $193,000. The price of homes has increased 7.7% since 2019 and should increase by 8% next year. The average cost of rent in Arcadia is under $700 per month.

Shelbyville

The population of Shelbyville is around 20,000. The average home in Shelbyville, Indiana costs $126,362. The value of homes have increased 2.8% over the last 12 months and are expected to go up 6.3% in the next year. Average monthly rents in Shelbyville are around $750.

Cumberland

About a 30 minute drive from Indianapolis, Cumberland has a population of over 6,000 people. The average price of homes has gone up 10% since last year and is $208,000. Zillow predicts that home prices in Cumberland will go up 9% by this time next year. Renters in Cumberland pay on average $750 per month.

Unlike many other smaller towns in Indiana, Cumberland’s population has steadily risen over the past 10 years. In fact, since 2010 its population has increased by more than 16%. Over 6,000 residents reside in Cumberland and it’s easy to see why. It offers affordable housing in a growing market.

Mooresville

Mooresville sits just 25 minutes northeast of Indianapolis. It offers residents a nice place to live and raise a family. It’s also known to have great schools. Like most suburbs in the Indianapolis metropolitan area, Mooresville is affordable.

Median monthly rent in Mooresville is $700 and the average price of a home is $211,000. Last year, the price of homes has increased 7.5% and the same trend should continue over the next 12 months. 

The population of Mooresville has risen 5.1% since 2010. It’s important to note that while Mooresville’s population growth has slowed down in the last couple of years, it’s still slow, steady growth.

Muncie

Muncie, Indiana! Has a population of about 68,000 people. The driving time from Muncie to Indianapolis is just over an hour. It’s home to Ball State University and IU Health Ball Memorial, which are Muncie’s largest employers. More than 22,000 students attend Ball State University, which brings a strong rental market. 

Around half of households in Muncie are renter-occupied and average rents are just under $900 a month. The median price of homes in Muncie is $89,344 with an increase of 7.8% since last year. In the next year, it’s anticipated that home prices will increase by 8%.

2 - Fort Wayne Metro Area

Another strong Indiana real estate market is Fort Wayne, which is the second largest city in Indiana with nearly 271,000 residents. In the last 10 years, Fort Wayne has grown by almost 7% and is growing at a rate of 0.62% in 2020. A growing population is always a good sign of some of the best real estate markets in 2021. 

It’s 16% less expensive to live in Fort Wayne compared to the rest of the U.S. Located in northeastern Indiana, the average price of a home in Fort Wayne is $155,563. Average rent per month is $800, also well below the national average.  

The big employers in Fort Wayne and Allen County include: 

  • Parkview Health Systems
  • Lutheran Health Network
  • General Motors
  • Lincoln Financial Group
  • Sweetwater Sound
  • BF Goodrich
  • Frontier Communications
  • Fort Wayne Metals Research Products Corp.

Fort Wayne is less than 200 miles from several major cities and states. It’s just 92 miles from Toledo, 105 miles to Indianapolis and 137 miles to Columbus and Cincinnati.

3 - Evansville Metro Area

Evansville, another solid Indiana housing market, is located on the Ohio River and is the third largest city in the state of Indiana. It sits right on the border of Kentucky and is less than 200 miles from six major cities: Louisville (100 miles), Nashville (132 miles), Indianapolis (145 miles), Saint Louis (151 miles), Lexington-Fayette (169 miles), and Cincinnati (188 miles).  

The city of Evansville has a population of almost 118,000 and the entire metropolitan area has over 314,000 residents.  While the population of Evansville has decreased slowly over the past several years, it’s still a large and thriving city. 

The average home in the Evansville area costs around $141,500. Since last year, home prices have increased almost 8% and should continue at the same rate over the next year. Average rent in October 2020 was $775 per month. 

The major employers in the Evansville area are: 

  • Deaconess Health System
  • Toyota Motor Manufacturing
  • Ascension St. Vincent Health System
  • Evansville Vanderburgh School Corporation
  • Berry Global
  • University of Southern Indiana
  • Koch Enterprises, Inc.
  • SKANSKA

 The housing costs in Evansville are 23% less than the national average. The overall cost of living is also 11% below the national average. With a large population, solid job market and lots of affordability, Evansville is one of the best real estate markets in Indiana in 2021.

4 - South Bend Metro Area

And the final Indiana real estate market we’d like to highlight is South Bend, which is located on the St. Joseph River and is best known for its proximity to the University of Notre Dame. Classic car lovers will get their fix at the Studebaker National Museum at South Bend’s city center. 

The metropolitan area encompasses St. Joseph County in Indiana and Cass County in Michigan. It has a population of approximately 323,700 and roughly 85% are residents of Indiana. South Bend proper is similar in size to Evansville as there are around 118,000 residents living there. 

Another similarity to Evansville, South Bend is within just 200 miles of several large cities including. These cities include: Fort Wayne (71 miles), Chicago (72 miles), Milwaukee (127 miles), Indianapolis (132 miles), Toledo (139 miles), Detroit (171 miles), Windsor, Canada (173 miles), Madison (189 miles), and Cincinnati, (197 miles). Also just five miles from downtown is South Bend Regional Airport.

The average home price in South Bend is around $123,000. Compared to last year, values have increased more than 10% and are expected to increase 8.5% over the next year. With such affordable housing costs, neighborhoods around South Bend could be a great opportunity for investors to find cash flow and appreciation through rental properties. 

Because of the high rental demand from Notre Dame’s almost 9,000 students, the cost of renting is quite a bit more in South Bend. The median price of rent is around $1,100 per month. That’s a slight decrease from last year, but as you can expect, rental rates tend to fluctuate, especially during uncertain times (cue Coronavirus pandemic). 

The largest employers in and around the South Bend metro include: 

  • University of Notre Dame
  • Msm Holdco, LLC
  • Saint Joseph Regional Medical Center
  • Beacon Medical Group
  • AM General LLC
  • Air Wisconsin Airlines LLC
  • Honeywell International Inc. 
  • Saint Joseph Regional Medical Center (South Bend Campus)
  • Ivy Tech Community College of Indiana

Because of the strong rental demand and prices, certain neighborhoods in the South Bend metro make for an interesting opportunity to buy real estate.

To learn more about investing in Indiana, view our Indianapolis real estate market page.

How the COVID-19 National Eviction Moratorium Could Impact Landlords in Indiana in 2021

The CDC issued a COVID-19 National Eviction Moratorium in September 2020. The moratorium essentially halts evictions for renters unable to pay rent due to the Coronavirus pandemic through the end of 2020. 

The state of Indiana hasn’t released any future plans for providing additional help to mortgage holders or landlords. 

If you’re a landlord looking for tips on how to collect rent during COVID-19, check out this article.

Conclusion

The best real estate markets in Indiana in 2021 offer affordability, are growing in population and have plenty of jobs. Investors can find great opportunities for cash flow and appreciation in markets showing these trends. Don’t forget to keep an eye on changing economic trends and market fluctuations. 

Interested in learning about real estate markets other than Indiana? Check out other top real estate markets across the U.S.

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