diff --git a/lua/lazy/core/plugin.lua b/lua/lazy/core/plugin.lua
index 37d1a8f..8971c72 100644
--- a/lua/lazy/core/plugin.lua
+++ b/lua/lazy/core/plugin.lua
@@ -237,7 +237,7 @@ function M.update_state()
         or plugin.cmd
       plugin.lazy = lazy and true or false
     end
-    if plugin.virtual then
+    if plugin.virtual or (plugin.dev and plugin.dir ~= "") then
       plugin._.is_local = true
       plugin._.installed = true -- local plugins are managed by the user
     elseif plugin.dir:find(Config.options.root, 1, true) == 1 then