Investors drive all-cash Indianapolis home sales

Why it matters: Pandemic-era market forces have changed homebuying, perhaps for the long run, in ways that favor well-funded families and investors over first-time buyers and anyone else taking out a loan.

What's happening: Investors with cash made up 15.6% of Indianapolis-area home sales in 2022, compared with 12.7% in 2019, per ATTOM.

• Cash-paying individuals accounted for 24.2% of central Indiana sales last year, up from 19.1% in 2019.

Zoom out: One in three U.S. homes sold in 2022 was bought in cash, per ATTOM.

• Nearly 10% of those were sold to investors, while a quarter went to families and individuals.

💭 James' thought bubble: Indianapolis has one of the nation's highest rates of investor-owned housing. The pitfalls (bad landlords, divestment in neighborhoods) have been well covered, including in a recent IndyStar series.

• One possible benefit, though, is that investor demand for housing puts a floor on prices and makes a 2008-type crash less likely.

Flashback: Back in 2006 and 2007, only about 20% of Indianapolis-area sales were all-cash and the rest were mostly purchased through mortgages.

• Buyers had easy access to financing and operated on a level playing field.

Yes, but: We know how that ended — in mass foreclosures, with many homeowners either unable to afford monthly payments or stuck with exotic loans they wouldn't have qualified for under tighter lending standards.

The intrigue: Now, the housing market is traumatizing Gen Z, much like it did millennials coming of age in the Great Recession, but for different reasons.

• Record-high prices, combined with record-low homes for sale, plus mortgage rates approaching 8% and investor activity are putting housing out of reach for all but the wealthiest.

Meanwhile, the baby boomers are doing great — they're the ones throwing down cash for homes.