The beginning of 2023 has shown promise in the rental market.
Last quarter we saw a small drop in the rental costs, but throughout the first quarter of 2023, we saw those numbers increase to the highest they’ve been.
To start off the new year, rent prices are at an average of $1,450 in Indianapolis. This is a $70 increase compared to the last quarter of 2022.
Some cities saw an increase in rent of around $300 while others had a more moderate increase between $50-$150 compared to last quarter where rental prices dropped at least a small amount in most cities.
The number of homes rented increased for a majority of Central Indiana cities, especially in Indianapolis. For the first time since the second quarter of 2020, the number of Indianapolis houses rented has exceeded 600. The number for the first quarter finished at 613 properties.
Another increase we’re seeing is the days on market, with the average days on the market at 55 compared to 35 in the fourth quarter of 2022.
The number of homes rented and rental prices are on the rise which is great for investors to see and even though we are continuing to see an increase in days on market, we do expect it to go back down to the more consistent range we were seeing last year of homes being on the market for around a month at most.
T&H Realty’s Perspective
We were expecting a rebound in showings and applications in the first part of 2023, so seeing an overall increase in rent prices and the amount of rental homes being leased isn’t a surprise.
Rental activity tends to pick up throughout the first quarter and continue through the second and third quarters of the year. With this information in mind, we do expect rental costs and homes rented to increase at a steady rate with days on market beginning to decrease with the rising demand for rental homes.
Throughout the first quarter, we have noticed that days on market numbers have affected many investors and caused concern. T&H Realty is working to minimize that concern with our Owner Clients by improving our marketing strategies through additional tools and more effective marketing plans.