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I don't understand why Carmel is as expensive as Naperville, IL. Which is a similar wealthy suburb outside Chicago. Houses are so expensive. I'm not asking why its expensive, I'm asking why its as expensive as comparable suburbs in higher cost of living regions.
I'm very familiar with Naperville. Lived there and nearby for 15 years. Every single person, me being the exception, I knew from the Western suburbs that moved to the Indianapolis area moved to Carmel. That's because Carmel is similar in the city services and amenities it offers, similar in the socioeconomic background of the residents, similar schools, similar shopping, etc.
One big difference though is that starting sometime in the 1980's Naperville was able to expand. Land was still available to the south and to the west a bit. That kept costs down a bit there. Contrast that with Carmel. There really isn't a way to expand and become larger. Even a building lot is hard to find in Carmel. That drives up costs in Carmel.
I do think the bigger factor though is the cost of real estate taxes in Dupage County vs. Hamilton County. Those higher taxes and other tax issues in IL are keeping prices a bit lower. The taxes are what make the area a higher cost of living area. It's not the grocery prices, clothing prices, etc.
The biggest factor is that many parts of the Chicago area still have not fully recovered from the market crash in 2007/2008. Just one example: I noticed my old house in the area was for sale last year. It was listed only about 10% higher than our cost to build it in 1996, 20 plus years earlier and was only 3% or so higher than the price we sold it for 18 or so years ago. A couple of years after we sold it the value was up about 25% from the original purchase price.
I'm very familiar with Naperville. Lived there and nearby for 15 years. Every single person, me being the exception, I knew from the Western suburbs that moved to the Indianapolis area moved to Carmel. That's because Carmel is similar in the city services and amenities it offers, similar in the socioeconomic background of the residents, similar schools, similar shopping, etc.
One big difference though is that starting sometime in the 1980's Naperville was able to expand. Land was still available to the south and to the west a bit. That kept costs down a bit there. Contrast that with Carmel. There really isn't a way to expand and become larger. Even a building lot is hard to find in Carmel. That drives up costs in Carmel.
I do think the bigger factor though is the cost of real estate taxes in Dupage County vs. Hamilton County. Those higher taxes and other tax issues in IL are keeping prices a bit lower. The taxes are what make the area a higher cost of living area. It's not the grocery prices, clothing prices, etc.
The biggest factor is that many parts of the Chicago area still have not fully recovered from the market crash in 2007/2008. Just one example: I noticed my old house in the area was for sale last year. It was listed only about 10% higher than our cost to build it in 1996, 20 plus years earlier and was only 3% or so higher than the price we sold it for 18 or so years ago. A couple of years after we sold it the value was up about 25% from the original purchase price.
But there is still land around Carmel to build like Westfield , and I still see homes going up in Carmel. There can’t be more land around Naperville to build than the Carmel area. The suburbs just run together around Chicago.
Westfield isn't Carmel. I know that some Westfield addresses are assigned to Carmel schools, but it's not the same as a Carmel address when it comes to real estate values.
Yes, there are still homes being built in Carmel, but the point was that there is not room for Carmel to expand the size of the city and the amount of vacant land isn't a lot. It's being built pretty quickly. I was there a few weeks ago. I was stunned at the development that's happened in just the last 8 years off of Old Meridian.
Also read it again--I said in the 1980's (and into the 90's) Naperville had lots of land around it and expanded. When we first moved there in the mid- 80's my drive to work on Ogden Ave was through cornfields. There were cornfields behind my apartment. By the time we moved to the next place a few years later, the cornfields were townhouses and an expensive golf course subdivision.
Naperville has about 55,000 housing units compared to Carmel's 35,000 units.
BTW--I'm well aware of how the suburbs run together around Chicago. I spent most of my life in the Chicago area.
There is some land, but not as much as you think left in Carmel area. Most of it is on the westside of Carmel. Even there, as rrah said, some of those homes seem like they would be Carmel schools or address, but may actually fall into Zionsville or Westfield. That will obviously drive up price and demand.
I know you said not the why, but I think to understand why it's expensive and others there is some overlap.
I think some of the pricing is the City Council too. They ultimately decide what is developed and at what cost those homes can be sold for at a minimum. If they want to stop a neighborhood from offering homes starting at $120,000 they can. Siomilarly, if they want they can pass a developer building homes starting at $350,000 minimum. So based on what their policies and needs are for the city they can influence some of that. With everything the city has done bond wise, taxes and other in order to pay for the amenities like the Paladium, City Center and other things I'm sure they want to recoup as much tax dollars back to help pay for those things. Best way to do that is to make the neighborhoods coming in build more expensive homes. You will get more money in taxes on homes that are larger or assess for a higher value.
I think you also have to look at their history. Going back to the 1990s, before suburbanization had expanded nearly as much outside of Marion County (Unigov influenced some of that) as it has today, Carmel was the place with the nicest houses typically. Geist, Zionsville and Meridian Street in Indy being the others. Zionsville had some nice stuff, but still doesn't have the inventory of a Carmel. Most of the pro athletes in Indy were living in Carmel or Zionsville. The people making the most amount of money were mostly in Carmel area due to many of the financial centers of work being dowtown Indy or the Northside (the Pyramids, Keystone at the Crossing). So a commute to those places right on the Marion County border meant Carmel was only a skip and a hop away if you didn't want an Indy address or couldn't afford Meridian street. Obviously there are outliers, but back then that's where the new money went. The old money was still on Meridian in Indy north of 38th street. But if you are new money and either want your own house/mansion or want something nice but can't afford Meridian, Carmel was just a slight extension of that back in the day. The CEO of Conseco had a mansion in Carmel. The mansion that is now a part of Coxhall Gardens used to be owned by a guy who invented or was CEO of a telecommunications company I believe. Tony Dungy, Reggie Wayne, Adam Vinatieri all had homes in Carmel. Pete and Alice Dye lived and designed golf courses in Carmel and nearby areas (Crooked Stick). And people with money, typically not always, want to live around others with money. They figure they'll have similar views, investments, friends and keep their property up more than those without it. The whole keeping up with the Joneses applies. What way can you control who moves to an area and if they have the money or not than controlling the style and cost of homes built in said areas by the city-council. You aren't going to plop a neighborhood of $100,000 homes next to a mansion that will sell or be broken apart and redeveloped, but still sell for $5 million dollars.
Now fast forward to today and as was stated earlier, Zionsville is very pricey too, but still has lots of land it can develop into in Zionsville and Whitestown area and have cheaper homes if they choose to allow that to develop as a town council. However, the town council is trying to keep most new neighborhoods on the pricier end to keep that sort of image for themselves and that tax base there. There are brand new neighborhoods where the minimum for a home is $500,000 with no upgrades. Carmel on the other hand really doesn't have much area left to build into. That raises prices as most would agree that Carmel amenities are ahead of Zionsville and other nearby areas. People want to get into Carmel schools or be in Carmel for the other benefits and so are willing to pay top dollar. That will continue to drive prices up even on older homes just simply off demand for the area. I think those factors are what make Carmel so pricey in comparison to other places.
I don't know enough about Naperville, IL to know for sure, but would speculate if home prices are similar you are still getting more house for your home in Carmel. Not necessarily yard, but sq ft per dollar is better in Carmel still. Just a guess. So rrah and others, please chime in and educate me on this if my guess is wrong. From what I've read in past and knowing the taxes for land alone in Chicago area, Carmel may be pricey but you probably get at least a little more for your money. I would guess if you drove many of the neighborhoods in both cities you would notice a big difference in what the homes look like. That's just my experience with other wealthy neighborhoods in other metros outside of Indiana.
Many of the houses on the west side of Carmel are basically estates with a lot of land. Once you get past Ditch Road or so, a lot of the traditional suburban density tails off and you get a quasi-rural feel. If that land could be developed, that might put the brakes on the rate of appreciation for a little bit.
Many of the houses on the west side of Carmel are basically estates with a lot of land. Once you get past Ditch Road or so, a lot of the traditional suburban density tails off and you get a quasi-rural feel. If that land could be developed, that might put the brakes on the rate of appreciation for a little bit.
Maybe, but the Village of West Clay is out there. Those houses are practically stacked on top of each other and they are still several hundred thousand dollars. I think the Carmel address alone really drives up prices.
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I don't know enough about Naperville, IL to know for sure, but would speculate if home prices are similar you are still getting more house for your home in Carmel. Not necessarily yard, but sq ft per dollar is better in Carmel still. Just a guess. So rrah and others, please chime in and educate me on this if my guess is wrong. From what I've read in past and knowing the taxes for land alone in Chicago area, Carmel may be pricey but you probably get at least a little more for your money. I would guess if you drove many of the neighborhoods in both cities you would notice a big difference in what the homes look like. That's just my experience with other wealthy neighborhoods in other metros outside of Indiana.
It's going to vary, but in general you'll get more sq. ft in Carmel for a similar price. It's hard to tell exactly because different areas input sq. ft a bit differently so one doesn't really know how what is being reported in sites like Realtor and Zillow. You'll pay about 2.5 times more in property taxes in Naperville for a similarly priced house.
Redfin has some interesting stats that compare the two markets. It's pretty clear that one of those markets is a lot hotter than the other.
It's going to vary, but in general you'll get more sq. ft in Carmel for a similar price. It's hard to tell exactly because different areas input sq. ft a bit differently so one doesn't really know how what is being reported in sites like Realtor and Zillow. You'll pay about 2.5 times more in property taxes in Naperville for a similarly priced house.
Redfin has some interesting stats that compare the two markets. It's pretty clear that one of those markets is a lot hotter than the other.
Property taxes are higher, but only by maybe 4-6k on average. Keep in mind we are comparing a world class city (suburbs) and one of the most expensive, to one of the least expensive metros and states in the country. Not to mention all the additional career opportunities and high paying jobs in Chicago vs Indy.
Property taxes are higher, but only by maybe 4-6k on average. Keep in mind we are comparing a world class city (suburbs) and one of the most expensive, to one of the least expensive metros and states in the country. Not to mention all the additional career opportunities and high paying jobs in Chicago vs Indy.
Taxes put downward pressure on home values. That extra 6k a year adds up to an extra $180k over a 30 year mortgage. And people are fleeing Illinois while Indiana and particularly the Indianapolis metro continues to bring people in. And Carmel has some of the best schools in a state that is far better managed than Illinois.
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