What are you seeing in the Indy market heading into 2027?

Question

Hey all, I'm a builder-developer based in Indianapolis. We focus on infill duplexes, quadplexes and townhomes (middle market housing) in the urban core, plus some larger projects in expanding Indiana towns. As we plan next year's pipeline, I'd like to hear what other local investors are actually seeing on the ground.

A few things I'm curious about:

• Rents: Are you still getting rent increases on renewals, or are things flattening out? Which neighborhoods are holding up best for 2BR and 3BR units?
• New construction vs. older stock: Are tenants and buyers paying enough extra for new builds to justify the higher cost, compared with renovated older homes?
• Townhome demand: Is there real for-sale demand for townhomes at entry-level price points in Indy and the collar counties, or is it mostly investors buying?
• Financing: How are you financing deals right now (DSCR, local banks, private money)? Has anything changed in the last six months?
• Supply: Are you worried about the number of new rental units being built in places like Fishers, Westfield, and the Mile Square, or does demand seem to be keeping up?

Rents: Are you still getting rent increases on renewals, or are things flattening out? Which neighborhoods are holding up best for 2BR and 3BR units?

New construction vs. older stock: Are tenants and buyers paying enough extra for new builds to justify the higher cost, compared with renovated older homes?

Townhome demand: Is there real for-sale demand for townhomes at entry-level price points in Indy and the collar counties, or is it mostly investors buying?

Financing: How are you financing deals right now (DSCR, local banks, private money)? Has anything changed in the last six months?

Supply: Are you worried about the number of new rental units being built in places like Fishers, Westfield, and the Mile Square, or does demand seem to be keeping up?

I'm happy to share what we're seeing on construction costs and lot pricing if it's useful. Mostly I'd like a real conversation about where people think Indy goes from here.

What's working for you, and what are you avoiding?

Ken Wade · Answer

@Alec Neu , on the townhome question, I'd be a little cautious about building to sell in 2027.

Inventory in the Indy metro is up 21% from last year, now over 7,100 homes for sale. That's almost double what it was in 2022. Meanwhile pending sales are at their lowest October level in 5 years (see chart). Months of supply is up from 2.2 to 3.0, and median list prices are down about 5% year over year.

So anything finishing in 2027 could be facing quite a bit more competition from existing homes.

Rents seem to be holding up better, up around 2% over the past year. That makes me lean a bit more toward build-to-rent right now, at least based on the metro numbers.

Of course, Fishers, Westfield and downtown Indy are very different markets, and these numbers don't tell us much about new rental supply in those areas.

Curious what you're seeing on construction costs and lot prices. Are you planning to sell most of your 2027 projects or keep some as rentals?

Scarlett Hayes · Answer

Really interesting discussion. I work in real estate networking and referrals, helping connect builders, developers, investors and property professionals with valuable contacts and potential opportunities. I’d be happy to connect and explore whether I could be a useful resource as you expand your project pipeline for 2027. Always good to build meaningful industry connections.

What are you seeing in the Indy market heading into 2027?

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