When they moved back to Hamilton County after five years overseas, Rohaya Rahmat and her husband expected smooth sailing in their house hunting, given their household income of $250,000.
Instead, they got pounded by waves of buyers in a tumultuous real estate market.
“The last time we were here you could get a huge house for what we budgeted,” Rahmat, 49, said.“Not this time, we were quite shocked. People swooped inwithin an hour when (a house)went on the market.”
The couplemade offer after offer, and came to expect that the asking price would be about $90,000 more than the list price. They backed off from looking near Geist. They waived inspection contingencies. Still no luck, with $500,000 to spend.
Three real estate agents later, and on their ninth offer, Rahmat found a house for $650,000, a 5,400square foot ranch with a basem*nt at 146th Street and Hazel Dell Parkway in Noblesville. And that was only after the buyer who beat them to it dropped out.
The experience might seem like they were caught in a real estate freak storm, but it's instead become the norm, even for higher price-point homebuyers.
Affordable housing hard to find across most incomes
A new study revealed that finding affordable housing in Hamilton County is no longer just a nightmare for low and moderate wage earners; those making above-average incomes are getting squeezed out of the market, too.
The report by Indianapolis-based real estate consultant Greenstreet of housing demand in Hamilton County determinedthat families earning $98,000 year — 20% higher than the area median income — could afford only about a quarter of newly constructed homes and 12% of those currently on the market.
Even families earning twice the median income of $81,000 are being pinched; they can afford 86% of newly built homes and 59% of the active listings.
The culprits: flat wages and soaring home prices.
'It needs to happen':Carmel City Council to discuss removing member at next meeting
“Hamilton County is becoming less affordable to more people as stagnant incomes and growing home values create affordability problems for most income groups,” the report concluded.
The study was commissioned by the Noblesville Housing Authority, Hamilton County Area Neighborhood Development (HAND) and the Westfield Washington Township Trustee’s office. The results and possible solutions were discussed at a recent conference attended by 200 lawmakers, housing advocates, developers, businesspeople, urban planners and non-profit representatives,
“The pain is getting worse, we are definitely heading to a crisis point,” said Andrea Davis, executive director of HAND, which builds low-income housing.
Entry-level homes squeeze
Real Estate Agent Rodney Heard said a market flooded by buyers is making the process grueling. "Short supply and great demand and you have $100,000 over list,"he said."Ninety percent will find a place but some you send elsewhereor settle for something less."
The Greenstreet report paints an even bleaker picture of the market conditions for working class families who are takingnew jobs in Hamilton County and looking to move in.
It found that 52% of the jobs in the county paid below $40,000 a year, and the most jobswere in the service industry, such as hotelsand warehousing. Whilehospitals and labs arethe largest employers in the countywith many high paying jobs, low paid workers also are in the field.
Hamilton County housing:HamCodirects $5M to affordable housing from COVID relief funds
"Those are generally considered the support jobs," said Greenstreet researcher Katie Wertz.
It's the flip sideof an economic equation for the fast growing cities of Fishers and Carmel astheyadd higher-paying tech and medical science jobs. For each of those positions, five unskilled or lower paying jobs are created, the study found. Asa result, nearly 19,000 households, or one in four, spend more than 30% of their income on rent, a yardstick set by the federal government to define cost-burdened households.
“The opportunity for essential workers to find housing at attainable prices is disappearing and in some parts of Hamilton County, those opportunities are already gone,” according to the report. “An essential worker earning a $33,228 annual household income would find the task of acquiring attainable housing impossible.”
It's not just those lower wage workers who are priced out; municipal employees, child-care workers, health careandoffice workershave a difficult time findinghousing, too. The study found that 66% of the workforce in Hamilton County comes from elsewhere and thecounty's 22,000 apartments are at 98% capacity.
Hamilton County rentals are full
At one of the few large affordable developments, landing an apartment is like finding a pitcher of water in the desert.
"People are unbelievably thankfulwhen they can get an apartment," said Brittany Hart, regional manager for Pedcor, whichmanages Cumberland Crossing at Cumberland and 121st Street. "People are really desperate."
The 232-unit subdivision rents one, two and threebedroom apartments underthe $1,000 range for low wage earners, many who workin the service industry.
There are so many people inquiring about apartments each day and so few people moving out that keeping a waiting list would be impractical, Hart said.
Indiana real estate soars:Housing in Hamilton County unattainable for many, partnership seeks $51M to help
"It would be a mile long," she said.
Instead, it's first call first serve. But availability isextremelyrare.
InApril, five tenants moved out. In March, one moved out and in February two moved out.
Researcher Wertz said the lack of housing and long commutes increases employee turnover, whichcost companies more money.In the long-term it deprives cities of income tax revenue, which is collected based on a worker’s residence. And the shortage of homes deprives the county of property taxes.
If the trend persists it could start hurting the local economies, and making other cities more competitive for residents and businesses, Wertz said.
“We could see more and more issues related to workforce attraction, making business more unlikely to come,” Wertz said.
Housing market cool down
FC Tucker Realtor Christian Travis said the housing market began to cool down around Memorial Day but its still competitive. That's when Patrick and Allison Bohm, both government workers, started looking to sell their home on Maple Avenue near downtown Noblesville and look for a bigger place.
"At one of the first houseswe looked in Wellington North (Noblesville subdivision) there were about 30 people at a showing and they got three offers just in the short time we were there," Patrick Bohm said.
After that, the Bohms and Travis filteredthrough about 70 homes online but their demands were particular. The couple has two young childrenand wants four bedrooms and a three car garage.
"We are looking for something large enough that it will be our forever home," Allison Bohm said.
They decided to build a home at a subdivision beingdeveloped near downtown Cicero. The Bohmswere about 10th on a waiting list but moved up when other home-seekers dropped out. The house won't be ready for at least another 10 months. In the meantime, the Bohms have held two well-attended open houses for their 3-bedroom, two bath, Noblesville home, listed at $389,000.
The process is time-consuming "but not super-stressful," Allison Bohm said. "We are happy with what we found."
Housing trusts
Davis saidlawmakers and othershave begun to address the shortage of affordable housing:Hamilton Countydedicated $5 million in American Rescue Plan to develop homes and a recently formedHamilton County Housing Coalition hasa goal of securing $51 million over five years.
Wertz, whohas done housing assessments of other Indiana communities, saidheightened awarenessby politicians was just one piece of the puzzle. There also has to be acceptancefrom residents of affordable housing near them.
“Everything is doable if it has the right support butthe community is oftena barrier,” she said. “There can be lot of pushback sometimes.”
To help solve the funding piece, the researchers recommended forming housing trustfunds and community land trust funds.
Governments can fund housing trusts by requiring a fee for new commercial development, a percentage of permit fees or of various sales taxes.
Land trusts are operated by non-profits or governments that purchase land for future housing, which reduces the costs for buyers by about 25%. The resident owns the house and paysproperty taxes and maintenance or repairs but the land trust keeps ownership of the land.
Call IndyStar reporter John Tuohy at 317-444-6418. Email at john.tuohy@indystar.com and follow on Twitter and Facebook.
