A weird open house moment....

The most profound moment at my open house last Sunday came when a prospective buyer shared with me one of the lone bright spots of the current downturn. She believes that we will all have to become better consumers when it came to our investments. Kudos Diane...VERY true. The weirdest moment? Well here you go..........




OT......there's a GREAT new tool out there for keeping track of just about anything from crime in your area to shopping, store deals, entertainment to a variety of news updates. It's FREE (nice) and you can also create your own search terms that can be updated and sent to you at http://www.trackle.com/. I'm getting ready to set up a search for where my 14 year old is after the movies on Friday and Saturday nights!

Just the Facts, Ma'am.

10 weeks into 2009 and we have some interesting data to start the year. The sales market has changed dramatically and is continuing to do so. The first time home buyer credit is having an impact on the market, but only for the actual first time home buyer, and not for the move up market.

Here's a look at the data for 2009 through early March for the entire 13 county metro Indianapolis area:

• nearly 50% of all homes sold were under $100,000
• 93% of all homes sold were under $300,000
• 95% of all homes sold were under $500,000
• 99% of all homes sold were under $1,000,000
• less than .06% of all homes sold were over $1,000,000

A major issue in this data starts with the low end of the market, or the first time home buyer. Of those homes under $100,000, over 50% of those were foreclosures. That tells us that of the owners of those homes under $100K, only half potentially went on to actually buy another property. That's why the sales numbers above $300K are so weak. What's selling is simply foreclosure inventory. While that's good and needs to happen, it tells us we are very VERY early in the recovery process if at all. Until the foreclosure inventory is absorbed and the foreclosure rate slows, we not recognize any value increase in the higher price points above 300K. At the moment we are simply absorbing unsold inventory. That inventory is the active inventory, not the secondary inventory which I would define as the complete set of homes that are waiting for any type of sign the market is recovering before coming back for sale. In other words we have several years of overall inventory to absorb before values begin to grow. If you're any type of buyer, this is good news because it means you are going to have opportunity to make a great buy for some time to come. Selling, will remain a big challenge for at least the next 24 months in our market.

...and another one gone and another one gone...another one bites the...

Well, you get the point. One of the most successful home builders in the history of Indiana is closing it's doors. This bizarre economy has claimed another victim in the corporate sense and thousands in the consumer and former employee sense. More layoffs and more peripheral pain in the industries that support housing. What ever you may think, we cannot simply blame C.P. Morgan for failing. It's WAYYYYYYY bigger than that. This is a national economic issue not isolated to this company and it's not over friends. You can see the entire Channel 13 television story with Greg here.

Gosh, sure glad the congress in all of it's infinite wisdom did something to fix housing. Oh, that's right, they didn't. We've now printed 1.5 TRILLION new dollars trying to save the economy and all we could come up with is a pissant $8000 first time home buyer tax credit that will have NO ultimate affect on the overall housing market. The $15,000 credit approved by both houses of congress was whacked by a bipartisan 'negotiating' committee whose identity was not revealed (intentionally) at the time of the signing of the stimulus package. What a load of crap. Fix housing first? What happened to that? How about let's kick housing to the curb. It is obvious now that despite the fact that a 6th grader understands how real estate leads economies into and out of recessions, our Congress and President do not understand or do not care. If we can find $150 million for honey bees we could find money to stimulate housing. Don't bother trying to tell me how honey bees need saving, I'm not arguing that....they just have NO PLACE in the stimulus.

We're not done friends. There are more challenges to come. For our friends formerly employed at C.P. Morgan and the consumers who are left in the wake, you have our significant sympathy. We're all hurting...some more than others.

I Have Issues

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Listen to Greg HERE on WIBC on the State of Real Estate

I'm in a foul mood. Last week I went to our city's 'State of Real Estate' conference. It was depressing. Lots of stats. Perfectly dressed people with perfectly coiffed hair gave us 94 minutes of bull roar in neatly packaged speeches. Just once I wanted someone to walk to the edge of the stage and talk to me. No notes. No cards. Just speak from the gut about the mess that was 2008 in Real Estate. Unfortunately there were no takers.

Seems like our industry takes one step forward and two steps back. At the very least there is a widening gap between those real estate professionals who understand where the future is going and those who have no clue. It's not that hard but there are plenty of people 'in the biz' that are headed for a rude awakening and a career change VERY soon at the rate we're going. Consumers...you need to ask more questions than ever before. Do you really need representation? Yes, but be careful where you tread or you may just end up in that gap between those that get it and the clueless who hang a license on the wall and want to collect a check from your sale. Yet there is hope. Last week the best and the brightest in the real estate profession also gathered in New York for the semi annual Inman Connect Real Estate Conference. Some stunningly great real estate minds. Some truly great solutions to the overall market's woes. So where are they in many local markets? Few and very far between. That's why, today, I'm irritated by how, on the local level, we practice real estate.

Here are some of my reasons:

1) Where's The Transparency? We don't get it in the Real Estate Industry. Tell the truth, the whole truth and nuttin' but the truth. Stop spinning the data. Stop giving sellers false hope. Stop encouraging buyers to offer 50% when the prices are already down 30%. Whether you like it or not your cred, your very survival depends on it as a real estate professional.


2) What happened to the Media? What the heck does the media want? You give them the straight scoop and still they twist it. Right now there are clearly two sides to the market. Great buying time. Tough selling time. Challenges mean opportunities...really REALLY great opportunities. Media reporting of anything has become totally about the agenda of the author.

3) Why the confusion about Marketing (industry)? I had reps from one of the major 'homes' mags tell me they would be around for 10 years (hard copy). I told them they should just focus on the next 10 minutes (if they were lucky). Print is dead. Broadcasting has terrible R.O.I. Online is the key to the immediate future.

4) Why the confusion about Marketing (sellers)? Quick - Mr. and Mrs. Seller. Can you name 10 web sites your home is advertised on? Can your agent? Think about it.

5) Social Networking Technology. Most Realtors don't even know what Social Networks are. Many Seller's kids are more proficient at this than those who are the professionals. If you don't know what they are, how can you leverage them to market real estate?

6) Proprietary Information is Dead. Real Estate, like many other businesses is no longer about being the 'gatekeepers.' It's not about the info...it's about knowing what to do with it. Clients no longer pay Realtors for their time but their expertise. If you don't have it, get it or practice saying 'welcome to Wal Mart, can I help you?'

There's plenty more....and I'll probably add to this list. For now, as my good friend Steve Simpson from WIBC says....'It makes my hair hurt thinking about it.' There's growth and opportunity ahead...as well as tremendous challenge. Step lightly and do your homework consumers. Much of the risk in the market is up to you to find.