Indianapolis Multifamily Report – Spring 2021
Despite its share of challenges, the metro's rental market is performing better than expected.
A year into the COVID-19 pandemic, the Indianapolis economy and multifamily market has displayed far more resilience than initially expected. The metro’s average rent recorded a 0.3 percent increase on a trailing three-month basis through February, to $877. This was in part thanks to the market’s upscale segment, where a supply imbalance has kept demand healthy and rates on the rise. Year-over-year, the average overall Indianapolis rate was up 3.6 percent as of February—a strong performance considering the economic turmoil.
The metro’s employment pool contracted by 18,600 positions last year—down 2.7 percent —recording losses in six of 10 sectors. As of the week ending March 13, some 18,000 jobless claims were filed throughout Indiana, up from 9,237 the previous week, in a sign that economic uncertainty is far from clear. However, the number of people receiving unemployment benefits in the state was down 6.3 percent as of March 6, compared to the previous week, to 64,983.
Nearly 2,400 units came online in Indianapolis in 2020, almost a quarter fewer than the previous year. Developers were working on 4,114 units across the metro as of February, equal to 2.3 percent of existing stock. In line with other affordable inland metros sporting a diversifying talent pool, we expect multifamily demand to ride out the pandemic, pushing Indianapolis rents up 3.5 percent in 2021.