In the fourth quarter, a significant shift occurred as Indianapolis managed to break free from the 50+ days on market (DOM) curse that has persisted.
October and November witnessed a refreshing change, with the City experiencing mid-to low 40s in terms of DOM for the first time in 2023.
However, things took a turn in December, bringing with it an average Indianapolis DOM of 53. That’s an increase of 10 days from the previous month.
The impact was palpable not only for our leasing team, but for anyone in the market. Movement on the leasing side of things seemed to come to a halt, an unusual phenomenon even considering the historically slow pace often associated with December due to holidays and cold weather.
The statistics for Q4 revealed that Indianapolis recorded the lowest number of homes leased throughout the entire year, totaling just 173. This downturn in the market had direct influence on the average rental rates in the city, which decreased by $83 from November to December. It became evident that landlords were heeding our advice—when the market stalls, adjusting your rent rate becomes imperative.
Reflecting on Q3, it felt like two distinct phases. October and November stood out with DOM hitting a year-long low, creating a sense of buoyancy in the market. However, December presented a stark contrast, as the market struggled for vitality. This shift was not only felt by our team but resonated throughout Indianapolis.
T&H Realty Services’ Perspective
After a late leasing season that dropped off in October, we felt how fast it turned into a stale market.
Our leasing team had to work double as hard to get a home rented in the same timeframe as just a month earlier.
But due to December being stone cold, we didn’t greatly anticipate January to start with a bang.
We were wrong… and we couldn’t be happier about it.
January 1st hit and our leasing team was busy. A huge surge in home applications hinted that 2024 might be the year we break out of the unpredictable post-pandemic market.
If this trend does continue, and 2024 marks the return of a normal leasing market, you may see rates start to increase as demand increases come Q2. In turn, DOM will most likely decrease.
Is this January surge a temporary anomaly, or is the market set to thrive at least until July?
Only time will tell, but the first three weeks of this year have us eagerly anticipating what lies ahead.