In Q2 2023, Indianapolis apartment operators and investors saw a reason to celebrate as rental demand rebounded into positive territory after four quarters of negative absorption. However, this upturn wasn’t enough to offset the new units added during the quarter, resulting in a slight 10 basis point quarterly drop in the average occupancy rate to 94.2%. Variance was minimal among property classes, with Class C properties on the higher end recording a rate of 94.5%, and Class A units on the lower end registering 93.5%.
Although all thirteen Indianapolis submarkets reported annual decreases in occupancy, the Carmel submarket noted a quarterly increase of 30 basis points, boosting its occupancy to 95.0% in the second quarter. This submarket’s strong demand saw newly occupied units outnumber the 164 that were introduced during this period. On the other hand, among submarkets with an inventory of over 5,000 units, Northeast Indianapolis had experienced a total of 652 net move-outs year-to-date, resulting in the area recording the lowest occupancy rate at 92.7%.