In some cases, it’s hard to track down needed materials for turnover work, and we’re definitely seeing an increase in costs – labor, supplies, etc. – across the board.
Those same supply/demand factors that have raised prices have also surfaced within the actual rental supply as well.
We saw the beginning of it mid-year and – WOW – did it ever accelerate as we closed out 2021.
Quick Central Indiana Rental Market Overview
As you may remember, in the second quarter of this year, we saw a couple of records set:
- Fewest number of homes leased in a quarter (514)
- Highest average rental price in a quarter ($1,296)
Fast forward to the fourth quarter, and we see that things are getting even tighter out there.
New records were set – once again – on those two key factors:
- Number of homes rented plummeted to just 389
- The average rental price soared to $1,332
So, supply (lack) and demand (excess) are definitely at play here. A couple of big drivers are that investors are selling their rental properties to Owner occupants, which reduces the rental supply and that it appears many Tenants are simply staying put since prices are increasing at such a torrid rate.
For the year, average rental prices increased by more than 9% in Indianapolis. For Indianapolis – for any market for that matter – that’s a HUGE number.
T&H Realty Services’ Perspective
Our fourth quarter was steady but unspectacular.
Rental applications began to dwindle in October and, as expected, slowly declined in November and again in December.
Fortunately, lease signings were strong, and we finished the quarter with an average days on market of 27.
Generally speaking, January is when things start to heat up.
However, so far, we haven’t seen the big kick-up in demand that we normally see… probably due to reasons mentioned in this blog, along with some lingering COVID uncertainty that squashed the rental market last January.
At any rate, we’ve used this time to make a couple of additional key hires in our Leasing department that will better prepare us to handle the inevitable Spring rush.