MUNCIE, Ind.–If you’re hearing about a housing shortage in Indiana, that’s not exactly what’s happening, says Ball State Economic Prof. Michael Hicks. He said some people have left the Midwest and that has made housing available, even if it’s not in the most desirable places.

“In Indiana as it is in almost all of the Midwest, home prices are actually very stagnant,” said Hicks, answering reports that prices are going up because of shortage. “They have not recovered to where they should’ve been after the Great Recession.”

Hicks explained that vacant homes are often in what he called less desirable areas t live, and that it actually may be harder to find a house, or at least one at a reasonable price, in one of the hotter neighborhoods in the state.

While the Indianapolis area is in a building boom, areas of the state that have experienced population loss are most at risk of too many empty single-family houses, according to the study, “Economic Considerations for Indiana’s Housing Markets”, which is new research by Ball State.

Indiana has roughly 316,000 such units, which is enough vacant homes to house nearly a third of the state’s residents. And, about 62 counties face markets where speculative new home construction is not profitable, said a news release from the university.

“The reason there’s not building going on is it’s not profitable to build a home and sell it across most of Indiana and most of the Midwest, due to population decline and slow economic growth,” said Hicks.

“Much of this enormous vacant housing stock is not readily suited for new residents,” noted Dagney Faulk, director of research at Ball State’s Center for Business and Economic Research (CBER). “Individual homes may be badly decayed, or the homes may be located in undesirable neighborhoods.”

But the presence of so many empty homes, as well as a home building industry facing unprofitable conditions, are challenges that Indiana shares with other Midwestern states, the study found.

“We also found that the oversupply of vacant homes suppresses home values in counties and regions where they are most concentrated,” said Hicks. “This in turn attracts lower skilled workers to communities with more affordable housing.”

 

Photo by Tierra Mallorca on Unsplash