South Bend, Indiana Real Estate Market 2026: Score 84, Undervalued, and 48% Five-Year Gains

South Bend, Indiana scores 84 out of 100 on the PropertyIQ index as of February 2026.

That is a B-grade score, placing South Bend solidly in the upper tier of Midwest markets. The more notable data point is what sits beneath the score: over the past five years, home values in South Bend have appreciated 48.76%. At a current Zillow home value of $223,111, this is a market that has compounded returns that most investors associate with coastal metros, at prices well below the national median.

PropertyIQ scores South Bend an 84 out of 100 as of February 28, 2026. Scores are updated monthly using Zillow, Census, and Realtor.com data.

The Numbers Behind the Score

The median listing price in South Bend is $291,500 as of February 1, 2026. The Zillow home value index is $223,111 as of January 31, 2026. The gap between listing price and Zillow value reflects a listing composition skewed toward the higher end of the market. Transaction prices have been more moderate.

To purchase at the current Zillow home value, a buyer needs an estimated annual income of $77,480. The South Bend metro median household income is $65,385 as of 2023 Census data. That leaves an 18.5% income-to-buy gap, which is meaningful but among the most manageable of any scoring market in the Midwest outside of the Buffalo-to-Albany Northeast corridor.

The market is currently 3.3% undervalued relative to what local income fundamentals would support. That is a rare reading. Most markets in the PropertyIQ dataset where scores are in the 80s show some degree of overvaluation. South Bend's -3.3% overvaluation figure means the market is priced below what incomes should be able to support.

The affordable home price is $245,997. The Zillow home value of $223,111 sits $22,886 below that threshold. That undervaluation, combined with a score of 84, is the fundamental investment case for this market.

Five Years of Appreciation

South Bend's five-year appreciation is 48.76% as of February 2026.

To put that in context: a home purchased at $150,000 in early 2021 carries a current Zillow value of approximately $223,000. That is a $73,000 gain over five years in a metro where median household income is $65,385. The appreciation represents more than one full year of median income in absolute gain on a typical starting investment.

That appreciation rate is not exceptional by the standards of 2020-2022 Sun Belt boom markets. What makes it notable is the price point. Markets like Phoenix, Austin, and Nashville saw similar or larger percentage gains on much higher absolute prices, which created severe affordability problems. South Bend's appreciation started from a low enough base that the market remains accessible.

The Zillow 12-month forecast is 4.2% additional appreciation as of December 2025. On a $223,000 asset, that is approximately $9,360 in projected value growth over the next year.

Inventory Is Tightening

Total inventory in South Bend is 506 active listings as of February 1, 2026, down 14.39% year over year. New listings are also contracting, falling 7.38% year over year to 276 new listings in February.

When supply tightens simultaneously across total inventory and new listing flow, it indicates that sellers are not bringing homes to market at the pace they were a year ago. Existing homeowners with low-rate mortgages are staying put, reducing turnover. The result is a smaller pool of available homes competing for the buyers who are active.

The pending ratio is 0.6716, meaning 67.2% of all active listings currently have accepted offers. That is strong absorption given the already-compressed inventory base. The market is not just tight; it is actively being bought.

Volatility in the Score History

South Bend's score has been notably volatile over the past 18 months. Here is the history:

• February 2026: 84
• January 2026: 66
• December 2025: 68
• November 2025: 86
• October 2025: 80
• September 2025: 78
• August 2025: 87
• July 2025: 81

That range of 66 to 87 within a single year is wider than most markets of comparable size. The 18-point jump from January (66) to February (84) is the sharpest single-month increase in the South Bend score history available in the dataset.

Volatility in smaller metro scores typically reflects how sensitive the supply-demand balance is to relatively small changes in listing counts or pending activity. A market with 506 active listings only needs a modest shift in either inventory or buyer activity to move the composite score significantly. Investors in South Bend need to account for this volatility when using the score as a timing signal; the trend and the full history matter more than any single month's reading.

The current score of 84 comes after two winter months of weaker readings (66 and 68), which themselves followed a 86-87 range in August-November 2025. The February recovery suggests the spring buying season has arrived in the data.

The Rental Profile

The Zillow rent index for South Bend is $1,379 per month as of December 2025. At the current Zillow home value of $223,111, the gross rent multiplier is approximately 13.5x annually. That is a GRM within the range that investors typically consider for cash flow properties, particularly in markets where appreciation prospects are also present.

The income required to comfortably afford the current rent level is $55,156 per year, below the metro median income of $65,385. Renting is affordable relative to local incomes, which supports a stable tenant base.

The homeownership rate is 70.76% as of 2023 Census data. That is high. In a market with 70.76% ownership, the rental market serves the remaining 29%, and those renters generally have fewer ownership alternatives than in markets with lower homeownership rates.

The Economic Foundation

South Bend's population is 324,180 as of 2023 Census data. The metro encompasses South Bend, Mishawaka, and extends into Elkhart County in Indiana and Berrien County in Michigan.

The University of Notre Dame is the most prominent economic anchor in South Bend proper. Notre Dame's impact extends beyond direct employment to include the healthcare, hospitality, and professional services ecosystem that has grown around the university. The institution provides a stable, non-cyclical demand base that insulates the market from the employment volatility that affects more manufacturing-concentrated Midwest metros.

The unemployment rate is 3.7% as of November 2025. That is below the national average and consistent with a labor market that, while not exceptionally tight, is functioning without significant distress.

What South Bend Is Not

A score of 84 and a 48.76% five-year appreciation record do not make South Bend a high-velocity speculation market. This is a mid-size Midwest metro with a university anchor, a stable but not rapidly growing employment base, and an affordability profile that makes it accessible to buyers who cannot compete in Chicago, Indianapolis, or the mid-Atlantic markets.

The score volatility from 66 to 84 within two months is a reminder that this market's scores are sensitive to small shifts. A market with 506 listings is not deep. Seasonal patterns matter more here than they do in larger metros.

For investors comparing South Bend to other Indiana markets, Indianapolis, IN offers more employment diversity and depth as the state capital and largest city, but scores 52 on the PropertyIQ index as of February 2026. Fort Wayne, IN scores 76. South Bend's 84, undervaluation reading, and five-year appreciation record make it the strongest-scoring market in the Indiana dataset at current data.

The Path Forward

South Bend's score has spent the bulk of the past year in the 78 to 87 range, with two weaker winter months. The structural case remains: undervalued, tight supply, strong absorption, and a five-year appreciation track record that competes with markets three times the price.

The income-to-buy gap of 18.5% is the primary risk. As listing prices continue to climb and Zillow values catch up, the undervaluation advantage erodes. If the market moves from -3.3% undervalued to flat, and then into overvalued territory, future score trajectory becomes less certain.

For now, the data supports the current 84 reading. The February score recovery after two weak winter months, combined with a tightening inventory base and strong pending activity, indicates the spring 2026 market is entering on solid footing.

PropertyIQ score as of February 28, 2026. Listing and inventory data as of February 1, 2026. Zillow home value data as of January 31, 2026. Sale-to-list and forecast data as of November and December 2025. Rent data as of December 2025. Census data as of 2023. Unemployment data as of November 2025. All data for informational purposes only.