(MUNCIE) – Ball State University economists dismiss news media accounts and social media posts that the Midwest is suffering from a housing shortage.
“I hate to throw a wet towel on this, but there is no housing shortage,” said Michael Hicks, director of the Ball State Center for Business and Economic Research. “Prices haven’t caught up with inflation.”
When it comes to the Indiana housing industry, the factors of supply and demand are working well on a local level, says new research from Ball State University.
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.”
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.
“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,” Hicks said. “This in turn attracts lower skilled workers to communities with more affordable housing.”