Nationally, this income level roughly corresponds to the top 1% of earners.
These affluent households can afford properties far above the states median home values.
Indianas median owner-occupied home value is about $226,000, roughly two-thirds of the U.S. median of $340,000.
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Regional Concentration
High-income homebuyers in Indiana are primarily concentrated in a few prosperous areas.
These areas feature upscale neighborhoods with expansive single-family homes, which are the preferred choice for many affluent families.
Going into 2018 and 2019, the market was relatively stable with steady price appreciation and favorable interest rates.
Statewide, house prices jumped 17.5% year-over-year in Q2 2021 an unprecedented spike for Indiana.
Impact on High-End Buyers
In this sellers market, Indianas affluent buyers had a clear advantage.
Their resources allowed them to navigate soaring prices and intense competition more easily than average buyers.
Indianapolis Metro
The Indy metro anchored the states luxury market from 20182023.
Indianapolis itself also saw some high-income households opt for downtown luxury condominiums or townhouses for a cosmopolitan lifestyle.
About 73% of Indianas occupied housing units were single-family detached houses, compared to ~61% nationally.
A portion of Indianas high earners are empty-nesters or retirees in their 60s and above.
This created a niche demand for high-end condos, townhomes, and lock-and-leave residences.
While such projects are relatively few, they indicate a growing acceptance of condo living among the wealthy.
Condos and townhomes played a supporting role mainly for older buyers or those with a second home elsewhere.
Redfin reported that interest in second homes hit a record 92% higher than pre-pandemic by January 2021.
Indianas $500k+ earners contributed to this trend.
Market Cooling (2022-2023)
The vacation-home boom did eventually cool.
High-income buyers became more cautious as borrowing costs jumped and financial markets turned volatile in 2022.
Investment Properties
High-income households also commonly invest in real estate beyond homes for personal use.
Indeed, the hot housing market saw plenty of investors snapping up homes, sometimes outbidding owner-occupants.
While many of those were institutional buyers, local high-net-worth individuals also participated in buying rental portfolios.
These affluent mom-and-pop investors often paid cash for properties to convert to rentals.
However, they typically made large down payments and had access to jumbo loans with favorable terms.
Yet, interestingly, the share of cash buyers began to rise during the pandemic housing frenzy.
In a hyper-competitive market with bidding wars, cash offers gave buyers a decisive edge.
High-net-worth buyers were often willing to buy outright or at least remove financing contingencies to win deals.
Many decided to deploy cash reserves instead of borrowing at these rates.
This trend was certainly reflected in Indianas luxury transactions.
Top-tier buyers, from Indianapolis to South Bend, frequently showed up with cash in hand for high-value listings.
Cash vs. Financing Strategies
Cash purchases became a preferred mode especially from 2021 onward.
Wealthy buyers liquidated stock portfolios or used accumulated savings to avoid the hassle of loans.
In 202223, cash helped avoid steep interest costs.
Those who did finance often took jumbo mortgages, which remained readily available throughout this period.
In 20182019, typical jumbo rates were slightly higher than conforming, but by 2020 they dropped too.
Some high-income buyers locked in ultra-low fixed rates in 20202021, securing loans under 3%.
Looking ahead, Indianas $500k+ earners are likely to remain a pillar of the housing market.
Their propensity to buy and invest in real estate provides support even in slower markets.
And in Indiana, they will continue to find that their dollars go a long way.
