The single-earner income household is going to be a thing of the past: Indy realtor on housing prices

INDIANAPOLIS — The need for affordable housing is reaching dire levels.

The national average cost of a new house plateaued at around $389,400 between 2017 and 2019, and ticked up just a bit in 2020, according to Statista.

Last August, it rose to $443,200 and has mostly stayed there since.

Rochelle Perkins, a realtor and managing broker for Garnet Group Indy, says she doesn't see things getting any better any time soon for people looking for homes.

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"In our metro area, the single-earner income household is going to be a thing of the past if rents and home prices keep trending the way that they are," Perkins said.

Despite this being a multi-faceted issue, Perkins says supply and demand is one of the biggest reasons we're seeing this intense housing market.

"As competition for home sales skyrockets, rents are going to do the same thing," she said. "It almost feels like, the rest of the country just discovered Indiana."

Money continues to flow into the Indiana housing market from out-of-state cash investors. Many of them get more bang for their buck compared to the prices of the property where they live.

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Look through social media and you can find groups dedicated to out-of-state investors looking to buy houses and property in Indianapolis.

If people pay over asking price for homes, Perkins says that means they'll have to make up for it in some way, usually through rent.

"We've seen rents rising year over year from 15 to 20%," Perkins said. "That is a huge jump when you think about someone paying $1,000 bucks for rent for it to go up potentially $200 dollars in the following year is crazy."

Well-known house flipper Karen E. Laine from the hit HGTV show "Good Bones" says she is very concerned with the rising costs of homes in our area.

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Since 2017, E. Laine has supported a bill, filed by State Representative Cherrish Pryor (D-Indianapolis) that would cap property taxes in areas that are being or have been gentrified.

"It is a fair and equitable solution to a problem of neighborhoods where property values are rising, which is a good thing for the city but could be a bad thing for individuals," E. Laine said.

As in years past, it did not move forward at the Statehouse.

E. Laine has faced some criticism for bringing attention to Indianapolis through her and her daughter's show but says all the work they've done has been fair to those living in the neighborhoods.

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"When 'Two Chicks and a Hammer' sells a house, it's based on comparable sales in a temporal and geographical region. The sale has to be close in time and close in place. That's the amount the bank will lend," E. Laine said.

"We're not pushing the prices up by taking a completely vacant, dilapidated home and making it livable and putting a family in that home. Our sales price is based on comps. There are already houses in that area with that value, that's how the bank will lend on that."

E. Laine points to the people who've come after her as to one of the reasons why we're seeing increased home prices and in turn, increased rent.

"If someone is coming in paying cash, they can pay whatever they want and that pushes the prices up."