by Christy Heitger-Ewing

Although Indianapolis continues to rank as one of the most favorable housing markets in the country, local sellers and buyers are experiencing the same strain between low supply and high demand that has national trends in a chokehold. Achievable housing is getting harder to come by as the majority of new build homes in Central Indiana are priced into the market at over $300K. Builders and developers around the state are noticing a host of issues leading to the continued inflation of housing prices – from cost of materials to labor shortages to municipal restrictions.

“A sewage pipe, for instance, used to be around $8 per linear foot. Now it’s $20,” says Tim Eckert, business manager at Weber Concrete.

And there’s another issue.

“After the Great Recession came the Great Retirement,” says Eckert, speaking on the aging workforce. “Older people are leaving, and younger generations aren’t gravitating to the construction field.” This is part of the reason Indiana is in a 175,000-job deficit in residential construction – with few immediate solutions in the works.

Mark Gradison, owner of Gradison Design Build, notes that with restrictive zoning requirements, delays in the planning, permitting and inspection processes, and the costs that are being pushed onto developers and builders, the purchase price for consumers is also climbing.

Some jurisdictions have shut their doors, which forces builders further out to communities like Lebanon, Whiteland, or Greenfield where people welcome the development.

“As much as [these local authorities] say they want affordable housing in their communities, they don’t always act like it,” says Gradison.

Meanwhile, developers and builders are seeking out locations for new developments. Gradison notes that it’s getting tougher to get a site titled, zoned, planned, and approved in a timely fashion.

“The shortage of lots is fairly staggering,” says Gradison.

Todd Pyatt, owner/president of Pyatt Builders, says that despite home prices remaining high and projected values continuing to rise, Indianapolis is still a comparatively affordable market for housing.

“Housing affordability, combined with a growing number of homeowners and strong job growth, Indianapolis is projected to be one of the top housing markets in the country in 2024 and No. 4 nationally, according to Zillow,” says Pyatt.

While builders have seen a bit more supply come to the marketplace due to interest rates over the last 6 to 12 months, there’s still a drop in permits in our nine county area.

“It’s not a drastic drop because some builders can buy down rates to help people afford a home, says Gradison. “Build Indiana Roots is certainly trying to help, by advocating for responsible, balanced housing policies.”

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