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HOME FOR LESS THAN $250,000 continued
Last month, Indianapolis-area home builders enjoyed their best February in almost a decade, ling the most construction permits for the month since 2007.
Still, coming out of the recession,
the number of building permits led annually in the metro area has held steady at about 5,000. Lains expects the number to remain relatively at in 2016—a far cry from the 13,200 led in 2005, before the housing market
went bust.
Lains thinks the amount would be higher if more affordable homes were being built.
“We think there’s higher demand at lower price points,” he said.
From 2011 to 2015, average prices for new homes rose in all nine metro-area counties, according to BAGI, with some increases too large to attribute to simple in ation.
The average price of a new home climbed the most in Hamilton County, from $285,000 to $369,000—a 30 percent jump. Boone County saw new-home prices rise 26 percent, from $326,000 to $411,000, and Johnson County, $214,000 to $264,000, or 23 percent.
In Marion County, the average new- home price increased just 3 percent, from $194,000 to $200,000.
To the west, Hendricks County reported a 17 percent gain, from $225,000 to $264,000. In the same ve-year span, the average price of a new house in Brownsburg increased from $205,000 to $234,600.
Town of cials have updated building codes in an attempt to improve designs, accounting for some of the increase, Brownsburg Town Manager Grant Kleinhenz said. Also, new homes in higher-end developments such as
Wind Ridge and North Ridge are priced above $250,000.
Yet the town isn’t about to abandon the more reasonably priced market, he said. “We generally believe a home valued around $200,000 begins to pay its own way, meaning it pays enough property taxes to pay for services,” Kleinhenz said.
Locally based Arbor Homes is one of the few builders constructing homes in the $200,000 range. But it’s not easy. Getting town and city councils to zone property for those homes and then meeting local architectural standards without going over budget are dif culties Arbor often faces.
“Municipalities are very upfront when saying they don’t want housing under $350,000,” said Arbor owner Curtis Rector. “But we try and show them the demographics of where the demand is.” That demand for lower-priced homes, coupled with little
competition, has served Arbor well.
In 2014, according
to the most recent IBJ statistics, Arbor led 700 building permits—the most of any builder in the nine-county area— despite the trend toward higher-priced houses. And those homes are needed.
When Fishers, for instance, lures a large retailer such as Ikea, it’s going to need more affordable housing for employees, Rector said. Ikea workers are typically paid
about $11 an hour.
To get those jobs, and the cachet of luring a large company, cities and towns often dangle incentives, further increasing their reliability on residential property taxes.
“A lot of the time, they will give tax breaks and incentives to those companies, and they exacerbate their tax issues,” Rector said. “They rely more on residential and [the price of a home] has to go up.”
Inventory also is a factor and, in Hamilton County, it’s especially tight. Beazer Homes bought a 36-acre lot near 126th Street and Lantern Road and plans in November to start building homes starting in the $300,000 range. Demand already is strong, said Laura Musall, a real estate agent at F.C. Tucker Co. Inc.
“They think they’re going to have to hold a lottery for the lots,” she said, “and they’re one-story homes.”
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