New Castle-Henry County Economic Development Corporation’s recent board meeting focused on opportunities available to the area in the realm of real estate and home ownership. Local Realtors Susan Falck-Neal and Cara Huffman presented local real estate data and Mark Fisher, CEO of Indiana Association of Realtors, shared the overall economic impact of housing in the region and state.
Fisher noted that the conversation about where companies are choosing to locate has moved from buildings and infrastructure to people.
“Companies are now asking ‘Do you have people?’,” he explained. “Housing development IS economic development. We like to say ‘Houses are where jobs go to sleep at night.’”
Is Indiana’s Housing Advantage At Risk?
Across Indiana, housing costs are a competitive advantage for the state. The state’s affordable housing drives an overall cost-of-living edge. The opportunity to own a home is a powerful incentive for attracting working-age residents, which has helped Indiana become the Midwest leader in domestic migration. In other words, more people are moving into Indiana than moving out.
These economic advantages are at risk, however, due to Indiana’s housing shortage. According to Fisher’s presentation, Indiana’s total inventory of homes for sale has fallen by 75% since 2012. Compounding the challenge is the fact that the residential construction market in Indiana has still not recovered from the Great Recession in 2009. Relative to population, homebuilding remains at a 30-year low.
With fewer homes for sale, affordable housing is harder to find. East Central Indiana home prices are generally more affordable, but prices have still increased 60% over the past five years.
An additional factor impacting home sales is elevated mortgage rates. Many home buyers locked in historically low interest rates in 2020 and 2021 and are not incentivized to put their property on the market.
Opening The Door For Buyers
These factors are leading to home sales trending below 2023 averages, even in East Central Indiana. Henry County’s residential sales declined from 2021-2023, and the average sale price continues to rise. Henry County has seen an increase in new home construction permits over the past two years.
Inventory is beginning to rise in the region, giving buyers more bargaining power. Sellers are adjusting expectations and even dropping prices when needed. Mortgage rates are heading down as well.
Even with these trends, there is still a low supply of homes and an acute shortage in starter homes. Henry County’s real estate data shows 1.4 months of inventory, and +6 months is considered a balanced market. The average number of days a home is on the market is 32.
Much of Henry County’s housing demand, like other rural areas, is driven by remote workers who are leaving metro areas for more affordability and a better quality of life. Henry County invested in “MakeMyMove,” which has attracted several new residents to the county with moving incentives.
Hope For Hoosier Housing
Fisher shared hopeful news with the group, in relation to opportunities for housing. The Regional Economic Acceleration and Development Initiative (READI), the state’s program for fostering collaboration in regions to attract and retain talent, is currently in the second round of funding. More than 40% of READI 1.0 funds went toward solving housing shortages. READI 2.0 could be even bigger.
“READI is the most transformative housing strategy the State has ever had,” Fisher expressed. “We also have the number one homeowner tax credit system in the nation.”
He also explained that communities can’t just be the cheapest. This approach is not a growth-driver. He encourages communities to fund quality of life initiatives, quality schools and safety personnel.
Fisher concluded by saying: “No houses, no people, no jobs.” He notes that Realtors remain a vital partner for economic developers as Indiana continues to grow. EDC President Corey Murphy echoed Fisher’s comments, sharing an update on local READI projects and noting that there are still opportunities for employers to leverage MakeMyMove incentives.
To learn more about the East Central Indiana region’s efforts to attract and retain residents, visit ForgeECI.com.