October 20, 2008 Central Indiana sales show positive increase for September
The September results for the 9 county MIBOR area around Indianapolis posted a small but important gain in the year over year results. Several counties showed very strong trends with Boone sales jumping 42%, Shelby was up 15%, Morgan County was up 12%, Johnson up 8%, Hamilton up 3% and even Marion showed a +2%. Overall in September last year there were 2,006 sales and this year there were 2,008. While very small, it signifies a major event in what nationally has been a bevy of sales declines. More significantly, the number of properties listed for sale dropped from 20,943 down to 18,393. The inventory is beginning to fall which will ultimately lead to a more normal supply/demand equation and a favorable impact on pricing. Many mortgage lenders are reporting an increase in funds available to lend as the actions of the Federal government begin to take hold in the marketplace. Some are calling this market the buy of a lifetime, if you are thinking of buying, give me a call.
September 1, 2008 Getting Qualified
As tough as the mortgage market has gotten, it is still possible to get a good loan. The biggest drawback for many folks trying to take advantage of this super buyers market is their ability to qualify. The credit score is the key in many cases. There are many things in a credit report that can negatively affect the mortgage company's decision. In many cases this info in your file is either wrong or outdated. Those issues can be worked out with some reasonable effort and in a matter of a month or two it is possible those factors can be removed from being a roadblock. If you are looking for a home and feel that your credit is holding you out of the process, call me. Don't miss this once in a decade sale on homes in the USA.
August 11, 2008 Feds are helping first time buyers
Last week the Congress passed some significant legislation to help first time buyers purchase a new primary residence. If you have not owned a home in the past 3 years and earn less than $75,000 a year ($150,000 for couples filing jointly) you can qualify for up to $7,500 in tax credit in the year you purchase a home up until July 1 of 2009. So for example, if you have a tax liability of $8,000 that amount would be reduced for that year down to $500. If you owe less than $7,500 you receive the difference as a tax refund for that year. The beneficiary then pays the amount back at the rate of $500 a year for 15 years at tax time (interest free). Should you sell before the 15 years are up you will repay the remaining amount at closing from the proceeds of the sale. Should the proceeds not cover the remainder, the unpaid portion is forgiven. This is a terrific bonus for qualified first time buyers, if you read the blog entry below, dated May 15 and you qualify for the mortgage help described there, you can begin to see what a great time it is for buyers.
May 15, 2008 Mortgage help is out there.
Even in these trying times, there are some neat programs available to help entry level buyers. One excellent program here in Indiana is the first time buyers mortgage. Currently, a first time home buyer who meets the income qualifications can acquire a 5.25% fixed 30 year mortgage. The down payments required are very small and closing costs are minimal. In Marion county these loans apply to houses priced at or below $237,000 and a two person family income at or below $63,800 will qualify for this program. Most loan types are accepted and these include VA, FHA or conventional, so the flexibility is indeed great. There are many innovative products available to qualified buyers even now. So, if you have an interest in getting a home now in this fabulous buyers market, please give me a call.
April 16, 2008 Now is the time...
The tax season is finally over, and if you noticed you could have used some more income protection, focus your attention on the home mortgage deduction. Consider upgrading your living quarters and protect more of your income by moving into a bigger better home. This is the time for that move.
As of this morning 30 year fixed rate mortgages are hovering under 6% and 5 year ARM's are hovering around 5%. The Federal reserve has acted to make credit more available to qualified buyers and this rate cycle is probably at the lowest point it will reach. Congress is enacting legislation to stabilize the housing markets and home prices have fallen steadily for the past six months. My sense is that the next 90 days represents the golden window of opportunity for home buyers. If you have the desire to own a home, this is the opportune moment folks will talk about for many years. Inventories are rich with discounted homes being offered at prices that may never be replicated. Mortgage rates are near historically low numbers and loans are available to well qualified buyers. When you marry the mortgage environment with the inventory levels, it is easy to discern that this is indeed the moment for buyers. It's been a long correction with painful pricing adjustments but opportunity is knocking for those that wish to achieve the American dream of home ownership. Don't miss this moment.
December 22, 2007 Here comes 2008
None of my contemporaries will be sad to see 2007 go. The soft market was a price paid for the go-go years leading up to 2007. Too easy mortgages, too many new homes built and the broad based feeling that house prices would forever go up without hesitation. If it sounds like the Internet bubble of 1999, it pretty much was the same behaviors transferred into the real estate market. We'll be a few more months letting the air out, but changes to lending practices have quickly come into place, and some legislation addressing the more egregious practices has now been enacted, and some government relief is on the way for some of the affected borrowers. The next step is a recovery. I see it slowly coming around, the phone is beginning to ring again and the prairie dogs are beginning to peek out of their foxholes. 2008 may still be slow in some of the explosive markets, but in Central Indiana I believe we will be in 2nd gear by May. As I tell anyone who will listen, don't wait for the takeoff, as soon as you feel the wheels beginning to turn make your move. The worst time to act will be when the cycle is in full bloom again. If you want any help, I'm right here.
November 2, 2007 Where's this train going?
Seems like every day brings more news of doom and gloom in the U.S. housing market; credit crunch, slowing home sales, dropping home prices, foreclosures and other seemingly awful sounding headlines. As someone once said if it weren't for bad news there wouldn't be any. As is always true, there are two sides to every story. There certainly is a credit crunch and home construction is slowing and prices are falling, at least for the moment. The consumer needs to remember however that looking at statistics is like looking in your rear view mirror, it tells you where you've recently been but not necessarily where you're going. All these issues can be viewed as positives if you are looking at home ownership.
Here's my interpretation of where we are and where we are going. The Federal Reserve bank has lowered the discount rate twice in the last three months, they have done that to improve liquidity in the credit markets, which is working. The impact has also shown up in dropping mortgage rates, both the 30 year fixed and shorter term 5 and 7 year ARM's are falling, many of these rates are now between 5 and 6 percent, pretty darn low. Is housing construction slowing? right now yes. Are home prices falling? right now yes. Are foreclosures rising? right now yes. All of this should suggest to the savvy buyer that now is an unbelievably good opportunity to act. Over the next six months one should be able to drive a terrific deal on a home, get a great mortgage rate and own a property that was out of reach just two or three years ago. Remember, once the overbuilding cycle is absorbed, and it will be, the fed will likely move up the discount rate, mortgage rates will likely climb, and home prices will revert to their historical upward movement reflecting a normal supply and demand balance. At that moment, if you haven't taken advantage of the down cycle you will have missed an opportunity that will not reoccur for years. Try to move against the flow of the lemmings, it pays in the long run.
September 26, 2007 Tired of yard work and expensive property taxes?
One can definitely get to those opinions in today's world. The increasing burden of labor and taxes combined with the overall population aging trend makes many of us look for relief as we become empty nesters and grandparents. In response to those dynamics, the housing market is now offering up some attractive options. Here in the Central Indiana market, townhomes of many types are popping up with a strong appeal to those who have grown weary of the weekend yard attack and have a greater interest in spending the weekend at a Purdue game, or Colts game or perhaps just a day at the mall with their spouse. A quick review of the MLS inventory shows well over 1500 townhouses/condos on the market mostly priced between $125,000 and $300,000 with square footages primarily running between 1400 to 3500. Most of us fit nicely into that amount of space given the departure of the kids and the lack of storage needed once the mowers, hoses and tools are history. The good news is that utility bills are generally lower and depending on how much downsizing you do, your taxes can run substantially less. Many of us also have reached that point where our homes are paid for or substantially paid for, and can pocket some equity by slipping into a townhouse. It's a nice change of pace to let the association worry about the upkeep while you head for the theater, coffee house or canoe excursion.
Some of the current inventory available include granite kitchens, stainless appliances, elegant tile floors and more. If your spouse is like mine there is a pent up demand for updated items that have been long delayed in favor of tuition, new roofs, new furnaces and other nagging priorities that always confront us. The point is, if you have an interest in taking a look at the alternative world that makes life a bit easier, give me a call, there are some nifty townhomes at some compelling prices that might just have your name tattooed on them.
August 13, 2007 You can't repeal the Law
The July stats for real estate activity in the nine county area around Indianapolis are now in. In the July versus July comparison there were just 37 fewer pended transactions this year than last year (properties put under sales contract). So selling is occurring at just about the same rate now as last year, doesn't sound too bad. Well, there is another piece to this puzzle. Homes listed have risen from 19,904 last year to 20,879 this year, an increase of 975, so the supply is increased by a sizable amount whereas the number being purchased is more or less unchanged. In light of this, the median sale price year over year has dropped by a couple thousand dollars. This in spite of the rapidly rising costs of labor, lumber, copper, and virtually all building materials, proving once again that the law of supply and demand is alive and well. In the housing industry these cycles are relatively common, oversupply and undersupply move back and forth like they do in any free market. What does it mean to you? Well, what it means is that if you want a house, NOW is the time to buy. If you want to get a property at favorable prices, now is the time to do it, if you wait until the market corrects, you will almost certainly pay a higher relative price - just like the folks who bought two years ago at the last pricing top. Like the stock market, you want to buy low and sell high. Remember, you heard it here first.
June 30, 2007 Land Ho!
I got an e-mail the other day from a web surfer who had checked out the website and was in the process of selling his townhome in the Bay area and is relocating to the Indy area for job reasons. His question was could he get a home with a good sized piece of land in this area. It seems that city living had left him with a desire to get a nice tract of land with some space around him. He had sold his townhome for $700,000 and was beginning his hunt for new living space. I didn't ask him for what his definition was of "good sized piece of land" but I did hunt the MLS for properties in that price range, and as I already knew, land in Central Indiana is a bargain. For those who are willing to drive 25 to 35 minutes from Indy or Carmel there are many options to acquire plenty of acreage. The first property that jumped up was a 4800 sq ft home built in 2002 sitting on over 20 acres priced at $700,000. Another 6300 sq footer built in 2004 at $899,900 sits on just under 30 acres, both in Boone County just minutes from our metro areas. If we drop into the 10-20 acre range, the options multiply and the prices moderate quickly into the $200's, $300's and $400's. Unbelievable to those coming from either coast. The fact is, one can live large in this region when it comes to land. And its always a good long term investment, we're not making any new land.
As it turns out, my e-mailer was looking for two acres and the task at hand is quite simple, but for those who are thinking wide open spaces are what you are looking for, look no further than Central Indiana. It's a steal.
June 13, 2007 A nature resort in the City
There are tons of great neighborhoods around Indy from the city center to the historic small towns dotting the surrounding environs. What is often overlooked is the incredible park on the western edge of Marion County - Eagle Creek. This is the 4th largest urban park in the U.S., it covers 4400 acres of which 1350 are the reservoir. This nature friendly park is home to a huge recreational complex and bird sanctuary which gives it the feel of a national park. A marina, hiking and biking trails, kayaking, canoing and picnicking are all part of the heavily wooded and rolling hills which are Eagle Creek.
Surrounding this beautiful body of water are a collection of neighborhoods of unique and elegant homes that provide their owners with an unparalled interaction with nature. Dense vegetation and abundant wildlife combine with the immense body of water give this area a vacation resort aurora. Even though the inhabitants are just 15 minutes from Indianapolis International airport and even closer to the Motor Speedway, the ambiance is one of being 100's of miles away from civilization. Property on the lake is naturally very pricey, running over a million dollars for some homes. But there are numerous options just blocks off the water where high quality properties sell for a quarter of that amount. If you enjoy sailing, fishing, pontoon boating, running, biking or communing with nature you might want to stop and investigate this well kept secret resort within the Indy city limits.
May 14, 2007 The magic of the Village
The city of Zionsville was established in 1852, and if you walk down the sidewalks today one gets the feel of, well, 1852. The brick street and the quaint 100 year old buildings give the village a feeling that is hard to replicate. The romance of the past surrounds you as you duck in and out of the retail shops that line the village streets. One only has to visit around 7pm almost any evening to see that the restaurants and bistros are packed with happy patrons enjoying that special ambiance of yesteryear.
The appeal that draws folks seeking to connect with a simpler time has also spilled over into the homebuying market. A quick review of the current MLS shows over a dozen homes for sale in the village built between 1850 and 1930, and the price per square foot rivals higher end new construction prices. Almost any desirable property will cost between $160 and $240 per square foot, pretty impressive economics given that the closest ocean is almost a thousand miles away. It's just another example of the law of supply and demand, it comes down to the fact that people want to live in a well established, historically relevant community and there are just so many homes available. It doesn't hurt that Zionsville also has an award winning and much recognized school system. There is a smattering of new construction on a handful of open lots, and they too are worth reviewing, but the real market in the Village are the vintage homes and they form the core of a market that seems impervious to the downward pressure on prices that is dominating much of the rest of the U.S. marketplace.
If you have an inkling that a historic home may be just what the doctor ordered to renew your interest in life, give me a call, we are located right in the middle of the Village, don't miss it.
April 20, 2007 The return to the City Center
Last Wednesday myself and my colleagues had the opportunity to visit with one of Indy's premier urban builders down in the heart of the city. I was impressed. New high end, very affordable condos are springing up all over the heart of Indianapolis. This recent breed of new housing has been developing rapidly for the past five years. Indy, like most large metropolitan cities in America is seeing a migration from the suburbs back to the downtown area. The demographics are diverse; young professionals, both singles and couples, students, empty nesters, retiree's, and those who simply miss the urban restaurants, theaters, and the warmth of the close-in city community.
The hallmarks of these living units are hardwood flooring, granite countertops, 9 and 10 foot ceilings, rooftop terraces, and most top of the line fixtures and finishes that 10 years ago were only available in new construction in the outermost suburbs. The rebirth of our city centers has now come full circle and is pulling the population back to its roots. Modern construction techniques combined with the innate charm of the downtown area make this living option one that everyone should take a look at. Give me a call and I'll take you on a ride through the new in-town castles, I think you will be impressed with what is available and at prices that will have you calculating.
April 9, 2007 The advent of the New Towns
If you haven't been on Indy's north side lately, you have missed the development of two very dramatic communities, Stonegate and the Village of West Clay. Stonegate lies a few miles west of Zionsville, and The Village of West Clay is a few miles east of Zionsville. These two communities are well underway in their development and contain a variety of homes built with poignant architectural styles which are being constructed by some of Indiana's premier builders. These homes cover a broad range of price points and range from high quality to very high quality and much attention has been paid to the environmental aspects in their design. What defines these projects is a powerful sense of community. The look and feel of the neighborhoods takes one back to the early 1900's when neighbors were really neighbors. The developments have set aside large parcels of land which provide an open feeling and park-like atmosphere. There are walking trails, gazebos, ponds, park benches, nature preserve areas and lots of places where folks can gather and feel their community. Intertwined with the residences are architecturally consistent retail shoppes, community centers and clubhouses all designed to give residents that rich feeling of togetherness. Both projects enjoy access to the finest public school systems in Indiana.
I hope you will take an opportunity to visit and see these two forward looking projects. Whether you are actively looking to move, or just looking, there is much to like about these new towns.
March 24, 2007 The Sub prime Lending Mess
The world of mortgage lending is fairly byzantine to begin with and now with the recent upheaval (or rather implosion) in that part of our business has people asking - what's going on? More importantly I am getting the question - how does this affect me? The answer varies. If you want to obtain a mortgage and you have reasonable credit, you should have no problem getting one. The crux of the current problem is that lenders began granting mortgages with little or no down payments to folks who had questionable credit ratings. In many cases the loans required no proof of income, so called "no documentation" loans. Many of these loans originated with low "teaser" rates that escalated after two or three years to higher rates. When that occurred many were unable to handle the increased payments. These types of loans are what are known as sub-prime. Currently 13% of these loans are now delinquent and several large-and many small- loan companies who engaged in these practices have collapsed.
Much of this type of behavior was driven by the rapid escalation in real estate values, leading to the belief that appreciation would protect the lender in the event of default. As is now apparent, the real estate market, like any market has its ups and downs. The bottom line is that if you want to purchase a property and you have the ability to show that your income will allow you to meet your obligations, you will be able to secure a loan at rates that continue to be very low based on the past thirty years of history. Down payments will need to be made in most cases, and they are a good idea both for the lender as well as the borrower. For those who have limited ability to produce a down payment, they can always fall back on the FHA loan, with a 3% down payment still being a great way to launch a new home purchase.
There are numerous consumer education brochures available to help you evaluate your loan options, these include "Shopping for a Mortgage? Do your Homework First", "Specialty Mortgages, What are the Risks and Advantages", and "Traditional Mortgages: Understanding Your Options". If you would like one of these informative pieces, simply e-mail me, and we'll fire one off.
March 1, 2007 The State of Metro Real Estate
It's hard to tell from reading the myriad of articles exactly what is going on with real estate these days. Some reports talk of gloom and doom others point to a bottoming and nascent recovery, others report business as usual, what are the facts? Well, all those are true if you choose the right market or the right comparative time frame. Like politics, all real estate is local.
If you are in San Diego, Las Vegas, Ft. Lauderdale or Boston, you are looking at some real weakness, those markets enjoyed rapid price appreciation over the past few years and like the stock market, are going through a correction, which can be painful if you bought into those markets in the past couple of years. So when you read a real estate story pay close attention to exactly what region or regions are the basis of the story. Similarly, you need to read press reports carefully to determine if the report is about NEW home sales, which are indeed quite weak, or resales which are faring better. A reseller of a home normally has the option of staying where he is if he doesn't like the price the market is signaling on his property. A new home builder has far less flex in that regard. You will also need to pay close attention to whether comparisons you are seeing are to the prior month or the prior year, and of course you need to focus on whether the numbers you are being presented with are monthly, quarterly or annual comparisons. News stories use all those varieties of data to highlight - or slant - the theme of their report. Statistics don't lie, but in the hands of an artful writer they can prove many different points when arranged properly.
So what is the story? Well, in Central Indiana at least, the story is pretty good. In the greater Indianapolis area, defined as the nine counties in and around Marion County, the total number of home sales for 2006 were virtually flat with 2005. January of 07 likewise came in flat with January 06. There has been some small softening of average price - down about $5000 per home January over January or 3.5%. The average price per square foot declined less, about 2%, which just means that the average home sold was a tiny bit smaller this year on average. Additionally, the days-on-market increased by eight days in the December and January reports. The average home sold this January in Central Indiana had been on the market 93 days compared to 85 days last January.
In the category of "fun facts" it was reported recently by the IBJ, that Indiana actually led the nation in the 4th quarter of 06 with a 13.7% increase in the sale of homes over the 4th quarter of 05. The average for all states in that period was a 10.1% decline. CNN Money also reported (click on the link at the top right to read) that Indianapolis is the most affordable major real estate market in the country. That is a measure of the balance between the cost of housing versus the incomes people achieve in the marketplace.
Central Indiana did not see the rapid upward surge in home values that many of the "coastal" markets saw in the early 2000's and consequently is not seeing the market correction many of those markets are now experiencing. The greater Metro Indy market is solid and is likely to continue in that mode. The underlying economics of the region are quite good, and Indy's diversified economic base is holding together well even with the auto industry going through a downsizing. The slack is being picked up by a variety of businesses such as pharmaceuticals, insurance and a growing sports event complex. In addition to the pro sports success of the Colts, Indy plays host to a large number of sporting events which include statewide High School tournaments, Collegiate tournaments, and major auto racing events. The city recently built the popular Conseco Fieldhouse and is now constructing a new major football venue, Lucas Oil Stadium which comes with an expanded convention facility. The constant parade of sporting & convention events in the city has proven a big plus to the hospitality, restaurant and nightlife sectors. In the end, the demand for real estate is a reflection of the economic vitality of the region and Central Indiana has proven to be a resilient economic engine. It forms the underpinning for what is a solid and bankable market for buying and selling homes. Right now I don't see any obvious reason that would change over the upcoming years.
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