Time For the 2012 Crystal Ball

Pending home sales  leap at year's end....another positive sign. 


Have you read this story yet about home values?  No? Good. Ignore it.  Here's what matters far more than Case Schiller national data.

Resale home sales continue to climb but take it with a grain of salt. Last November we were recovering from the 2012 buyer's credit vacuum that affected most of the year.


Five great tips for selling a home around the holidays. 


What can neighborhoods do to create and maintain value? 


Mortgage rates set record lows (again). 


Here are nine unique features that can set a home apart. 


This time of the year, lighting can be EVERYTHING in selling a home. Here's why: 


One of the coolest new gadgets for today's home.  


Think your Home Owner's Association is tough?  Try these! 


For my foodie friends.....just for fun here's a site that I cannot get enough of.  If I could only make pictures of homes look this good.  

Visual Tour for 12069 Leighton Court Open Sunday 3-5

Trying to sell a home in this market is incredibly confusing for most home owners. There are a number of reasons why pricing is SO important in your quest to get to the closing table.....here's why

Lehmans and Fannies and Bears. Oh My!

For most people, the failure of Bear Stearns, the reorganization of Fannie Mae and Freddie Mac, the failure of Lehman Brothers,the sale of Merrill Lynch and or the survival of AIG is more than a bit confusing. Wall Street and quasi governmental lending instituitional failures have little resonation here in the heartland, but they should.

Right now, the crisis of confidence in the American financial markets is the overwhelming challenge in Today's New World Of Real Estate.

Selling homes is about one thing: Getting the Money. Right now getting the money is becoming more difficult by the day. Every failure at any magnitude erodes the belief that consumers and investors have in bank liquidity. That makes getting money that much harder for the average consumer. That makes selling homes that much harder. That makes value recovery that much harder. That makes any of us in the business of real estate that much crazier.

Make no mistake: It absolutely affects everyone involved in the real estate business.

While things will stabilize from what they are as this is written, the psychological affect will linger long after the fact and potentially be an instigator in future bank health. How many more will there be? How much tougher will it get in the credit markets because of the newest failure (Lehman)? If AIG fails in the next week what other bad news will that propel into reality?

Essentially it all summarizes what I've been saying for the better part of a year. If you are a seller, you had better price aggressively and get out. We are close to the bottom but there's far too much instability to trust things will improve before mid 2009 and then only in guarded measure. If you're a buyer, the time is right both in value AND in terms of interest rates, now hovering in the upper 5% range which can no longer be taken for granted.

Fasten your seat belts......it's going to be wild ride that's not for the faint of heart.

Questions...Comments....Donations...Greg@GregCooper.com or 317.848.GREG (4734)

Potpurri and 'wagging the dog' in Today's New World Of Real Estate.

A random collection of Real Estate 'potpurri' is up for today's post.

Right now it's the 'Wag the Dog' Theory when it comes to the current state of the housing industry. Think about a dog chasing a car or for our purposes, the News Media and home sellers reacting to the housing market. No matter how fast the dog runs, it will never catch the car. The dog will never slow the car down. And, the dog will never bite a moving tire. What must the dog be thinking? In parallel, the media will continue to report on any and all bad news about real estate. The consumers will always react to that news. Buyers get more conservative. Sellers will slowly adjust prices accordingly in a group, never really getting ahead of their 'competitors' and never really catching or slowing down that 'car.' The media drives the market down psychogically and then the market declines only for the media to do it all again in a couple of weeks. The media (tail) wagging the dog (market).

Today, many sellers are running after the market, the same way dogs chase vehicles. What are these sellers thinking? Their home is the only castle for sale? Buyers will love the scent of their lilac bushes so much that it will temporarily cause them to forget the competition? Is it possible the smell of fresh baked bread will cause a buyer to pay yesterday's price in today's market?

In my opinion, it is imperative for a seller to price their property 10% below market in order to sell promptly and avoid being left in the long line of expired listings. It may be an election year, but it will be a long wait for the inventory levels to decrease to a balanced market. By suggesting a seller has an overpriced property, the real estate agent runs the risk of being the messenger that gets shot. Courageous agents tell the truth. Cowardly agents hope the overpriced property will generate sign or ad calls while the seller reduces the price and stigmatizes the property with additional days on the market. The next time you see a dog chasing a car, hopefully, it will remind you of the futility of chasing a declining real estate market.

Painful.... is the term I would use to describe the current level of bank owned properties. In Carmel, 271 are on the market, Lawrence Township over 600, Pike over 850 and on and on and on. Remeber every bank owned selling at .60 cents on the dollar affects the entire market.

Over night interest rates are fairly steady at 5.78% for a standard 30 year fixed. The qualifications have changed dramatically for every type of loan and are much more stringent. Check with your lender before getting too far down your buying road and make certain you have a mortage rep you can trust. Liar's poker means nothing in the lending and home buying world. They can promise you anything...delivering is another matter entirely.

Here's a novel idea........

Two very bright guys named Brian Boero and Mark Davison at 1000wattblog.com, have created a video from research they've done about the real estate climate or more specifically the real estate client. While I'm not in 100% agreement with every sentiment (I happen to think it helps that customers know I'm a real person), there is a real education to be had in this video. More to the point, I'd love to know what YOU think about the thoughts expressed in this one minute capsule. Feel free to email me....agree, disagree or digress. Greg@GregCooper.com

I am not a lead

A great commercial for Indy, taking care of the mother ship and a National MLS....

A bit of positive in all of the negative news we've had lately about our economy. Local recording artist Jon McLaughlin has a release out titled Indiana which he's graciously allowed the Indianapolis Chamber of Commerce to use in their marketing via the web. You can view the video by going to the Chamber of Commerce web site.

We would also encourage you to support Jon's work at his home page as well. I've heard the song 'For You From Me' about four times and it's already stuck in my head. Thanks Jon for such a great piece of work and the opportunity for our state to be presented in such a good way!

While I'm making a rare foray into music, here's another one for you. My friend Jim Swinson's alter ego is
Pamilco Joe, an environmentally friendly musician from North Carolina that has worked tirelessly educating kids about taking care of the world we live in. His CD's play every night in our house (I can sing them in my sleep) and are a great investment if you spend any time around children. Jim and his better half, Clearwater Flow have played multiple times at the White House and the Smithsonian Zoo. He and his multi talented band are on their 2008 World Tour right now performing at schools, festivals and gatherings spreading the word.

National MLS?
Real Estate site Zillow has begun the inevitable process of forming a national MLS by signing on their first client in Connecticut yesterday. All homes for sale in the state of Connecticut will be on Zillow which is an incredibly user friendly site. Should Realtors be concerned? Uh, yes. Not because it will make us obsolete but because like every service industry, the cream of the crop will survive and the rest will not. It's no coincidence that one of Zillow's founding members was a part of Expedia.com who, along with Priceline and Travelocity and countless other sites have basically put travel agents out of business. 10 months ago I wrote a piece about how the parallel of the travel and real estate industry would mean massive changes for all involved in the process of selling property. I believe in that parallel now more than ever. In a nutshell, here is is:

As Realtors, our value in the future will come not from proprietary information but in the analysis and guidance we give people based on that information.

Mull this over. If you're a consumer, I'd appreciate your thoughts by email or phone contact points listed at the bottom of the post.

Nightly real estate rates mixed
30-year fixed rate at 5.66%; 10-year Treasury yield at 3.34%
Long-term mortgage interest rates ended Wednesday mixed, and the benchmark 10-year Treasury bond yield dropped to 3.34 percent. The 30-year fixed-rate average held steady at 5.66 percent, while the 15-year fixed rate gained to 5.09 percent. The 1-year adjustable rate rose to 5.42 percent. The 30-year Treasury bond yield slipped to 4.21 percent.Rates and bonds are current as of 7:15 p.m. Eastern Standard Time. Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.


As always...questions....comments.....donations: Greg@GregCooper.com or
317-848-GREG (4734)

Stupid Is As Stupid Does

Apparently it's catching. The stupid gene, disease, virus, etc., is making the rounds to a degree that would make Mama Gump quiver with disgust. Yes, in an era that finds us in the worst real estate market in 30 years, we still have a mass worship at the alter of dumb and dumber. Locally, Indiana house leader Pat Bauer insisted on passing a tax relief bill that exempts two northern Indiana counties from a constitutional limit of a one percent cap on property taxes against the valuation of the home. Lake and St. Joseph's counties, prepare to get Ned Beaty in Deliverance style treatment. The only reason I care at all about this is because I'm originally from 'the region' and I hate the fact that Pat and his cronies can now stick it to the people that still live in those counties. The other teeny little issue could be the fact that it may make the whole amendment unconsitutional and we'll have to go through this entire damn charade again if that's the case....and why wouldn't it be?








Does anyone think the residents of Lake and St. Joseph counties won't fight this thing? If all of the work of the most recent general assembly becomes for naught, let's call for Pat's rug on a stick, shall we?

Next there's the genuises at Countrywide Mortgage. Terribly managed at the corporate level, they're now in the business of owning as much real estate as possible. Recently our brokerage had a home that had been listed for sale starting at $800,000 for over a year that had dropped to $675,000 with CW holding the mortgage. As it became a short sale (upside down) with NO offers on the home until it reached the $675K mark, it finally got an offer that was accepted by CW at $650K.

Their appraiser came to do a final appraisal on the home prior to the new buyer closing. The CW appraiser decided that even though the home had not sold at every price point from $800K on down to $675K where it finally got an offer, they would value it at $750,000 and subsequently blow the only offer to purchase they would have in over a year. Genius. That was the second such dealing we've had with Countrywide in the last six months that has ended like this. We all know what they say about fool me once....


Ahhh.....then there's the whole Bear Stearns fiasco that took a stock price of $80+- a share on 3/10/2008 and turned it into $2 a share 6 days later. This situation is much more complicated with liquidity and investment placement issues but the bottom line is that one of America's leading finiancial institutions has fallen faster than Humpty Dumpty. Thousands of employees are out of work, retirement portfolios are gone and massive uncertainly crowds the financial markets. Is there another Wall Steet shoe to drop along with Bear? Let's hope not. The fragile psyche of the consumer doesn't need any more bad news.

Let's switch gears to conclude with a little good news. Of a more pure and simple fun nature, I had the pleasure of watching, filming and nearly getting arrested participating in the Indy St. Patty's day parade with my step son Jack on 3/17. It was cold, blustery and no one cared. Many people that we know don't really understand Jack's interest in Irish Dance. Well here it is: I'm sure even at his age the 4-1 ratio of females to males isn't all bad. From our end it's physical, mental and social requiring discipline and a personal investment from him. Everyone's a specialist in this day and age and if that specialty helps you grow into a better person, I'm all for it. It's a long way from politics, home mortgage nightmares and Wall Street but right now, that's not all bad.

Questions....commments.....contact: Greg@GregCooper.com or 317-848-GREG (4734)

Let's get green. Tis the season for shortish men with elf like grins. Yes, it's the season for celebrations of all things Irish. In Indianapolis most kids want to be Peyton Manning. Mine wants to be Michael Flatly. In March, that can be viewed as a noble goal given the month. Right now, yes we're thinking green but there is more than one reason to do that. The obvious is that in a few days we'll collectively come out of our cabin fever, pour a green adult beverage and watch our community celebrate St. Patty's Day. The eight year old in my house got a bit of a jump on it with his Irish dancing recital at the Warren Performing Arts Center. Hard to believe that in Indianapolis, home of the almost no significant cultural diversity (insert tounge in cheek here), there can be such an outstanding dance troupe, but there is. They won't be the only ones dancing or thinking green this month, however. Our good friend Federal Reserve Chairmam Bernake will be dancing a monetary jig as well, but with far more significant consequences. Chairmen Bernake will be guiding the Fed into another significant decsion on how far to lower interest rates again. There seems to be a common belief that it will be at least 50 basis points but some feel we could see a 3/4 point reduction. As sure as I stand here on my soap box had they been paying any attention last summer they could have avoided this. Since no one was listening, we're playing catch up on the rate front, no doubt with some painful national affect.

Bernake spoke recently about the current foreclosure problem. Battling a dangerous wave of home foreclosures,Bernanke called Tuesday (3/5) for additional relief and urged lenders to help distressed owners by lowering the amount of their loans. "This situation calls for a vigorous response," Bernanke said in a speech to a banking group meeting in Orlando, Fla. Even with some relief efforts under way by industry and government, foreclosures and late payments on home mortgages are likely to rise "for a while longer," Bernanke warned. Rising foreclosures threaten to worsen the problems in the housing market and for the national economy, which many fear is on the verge of a recession or in one already. Gee, do ya think?.

While the national issues remain top of mind, real estate remains a microeconomic, local issue. In Indianapolis that still means people are making incredible buys on property. Who has the courage to make those decisions now and who will regret not being a part of the value growth over the next several years remains to be seen. Meanwhile I'll be pouring myself a cold one in all of your honor and hoping for a better 2nd, 3rd and 4th quarters of 2008. Keep your shaleilee dry and your spirits up because friends, we're all going to need it.....

Contact....questions......donations:
Greg@gregcooper.com or 317-848-GREG (4734)

UPDATE: Will they really go down? Take a look at some potential revaluations of properties in the Indianapolis area after tax reassessment. Meanwhile the squabbling continues between our politicians as to what exactly will be done to ease the tax burden. It's times like these I'd like to slap Pat Bauer's toupe back into the '70's where both it and his management style came from.

Meanwhile......
I'm as mad as hell and I'm not gonna take it anymore.

Some blog posts are nice. Most of the time, I'm nice. Most of the time I'm positive. This time I'm neither positive or nice. This post is not nice. Frankly I'm angry. Angry because every day we get to explain to people why their homes are not worth as much as they were two years ago. I'm angry today for a number of other reasons which are best documented after you spend a few moments with Howard Beale.



Peter Finch won an Oscar in 1976 for his portrayal of Beale, an angry television anchor. For me it was worth a watch because it captivates my feelings quite succinctly about our current mortgage/credit/financial/housing/etc. crisis that we've put ourselves squarely in the middle of.

Personally, I'm angry because we've handed out millions of zero down mortgages in neighborhoods where hundreds of similar floor planned track homes sit side by side.

I'm angry because we've taught an entire generation of potential and current home buyers you don't need to have any money to own a home.

I'm angry because my new Australian Shepherd puppy Bailey could probably get a VISA card right now with the dozens of applications we get in the mail every year.

I'm angry because although the real estate community has been screaming about challenges in the housing market over the last year, it's taken until now for the federal reserve to wake up and smell the crisis.

I'm angry because in my community (Indianapolis) we've built over 100,000 NEW homes since 1998. That's one NEW home for every 3 preexisting homes in our metro area. Can you say oversupply?

I'm angry because it will take us years to get out of the mess we've gotten ourselves into.

The only things real estate related that I'm not angry about today is that I have a number of clients that are absolutely stealing property right now in their purchases. At least in a few years, I'll be able to give them good news about the appreciation they're recognizing in the real estate they're buying today.

Contact: Greg@gregcooper.com OR 317-848-GREG (4734)

Suit up and buckle down....

It's going to be a rocky ride over the next few months. Think the subprime mortgage mess is behind us? Not quite. Not really. The standards under which lenders can approve loans are getting tighter by the day. Loan programs once standard are now fantasy. A colleague said to me today that we will look back on this period in the real estate business as the time when the mortgage industry regained it's sanity. I suppose the good news is that you will not be seeing anymore DiTech.com commercials offering 125% financing over the phone. 20% down loans are becoming minimum standard requirements. It's my belief that by Memorial Day of 2007 (or sooner), 100%financing will be a distant memory.

The Federal Reserve has cut the discount rate again this week to 4.25%. In reality there would have little effect on the long term rates and had they cut it to 4.0%. The Fed cut lowers the rates on things like Home Equity Lines, credit cards, and other similar lending but it can often have the exact opposite impact on home loan rates. In some ways a Fed cut is perceived as driving inflation, since spending by consumers and businesses generally picks up in times of better financing rates.

Another huge factor in this process is the ongoing subprime affect. The types of home loans available have shrunk consderably in the past 6 months with in essence a 'knee jerk' reaction taking place in the lending markets. Further as we get into 2008, we're going to see an increased need for higher and higher down payments, credit scores and overall credit worthiness for borrowers to obtain a loan. If it were our choice for the market, we would have preferred to have these changes ushered in over several years instead of 10 months. Unfortunately when FannieMae and FreddiMac announce huge losses as they did again on 12/11 to the tune of another 6 Billion dollars, there's going to be tighter requirements to get a loan. That means fewer buyers in the market and continued excessive inventory of homes for sale.

The day is coming but we're not there when things are decidedly on the upswing. Until then, sellers need to be ask themselves long and hard how badly they want to sell, especially if there is no real sizzle in the product their offering. If you want to sell, you must be updated and your price must be on the aggressive side of the curve. We get calls everyday from home owners who want, think, feel and need X amount of dollars from their home. While we'd love to make that happen for everyone, the market is still the market and doesn't care about ANY of that. The honest reality is, your home is worth what someone will pay and in this day and age you MUST look like a significant value below cost or be incredibly unique to get to the closing table.

QUESTIONS? COMMENTS? Greg@GregCooper.com or 317-848-GREG(4734)

Paybacks are a .......................Necessity!

The 2007 upgrade cost versus return value numbers are out and they both reflect a strong indication of where good money is spent to increase the worth of your home and what type of immediate dollar amount they yield. As one may imagine, these vary in certain parts of the country. Specific exterior projects returned a higher recovery rate in the Pacific Northwest if they were based on eco friendly products but also because the northwest saw one of the best real estate overall value trends in the nation. While the South, Midwest and West saw decreases in overall value, the Pacific Northwest saw modest gains as did NY, NJ and Connecticut. The cost recuouped also varied by condition of the rest of the house, the value of similar homes nearby and the values in the overall community. Further, the value of return also differentiated on whether a cost was a replacement or an addition.

Nationally, most of the projects that saw the best dollar for dollar returns were exterior in nature with the exception being a minor kitchen remodel. Home office remodels, on the other end, have never returned more than 58% of their investment value in the decade plus of the survey information. On the positive side, wood deck additions recovered over 85% of their cost nationally and kitchen remodels actually returned nearly 88% of their investment.

To pinpoint the returns for the Midwest, we looked at Indiana, Illinois, Ohio, Wisconsin and Michigan. The best returns for projects were lower than the national numbers but were no doubt skewed by the decline in the overall market. In the midwest region minor kitchen remodels returned over 78% of cost immediatly while deck additions returned over 72% of their outlay. Master suite remodels returned 63% of their cost in the five state region.

In other remodels, the cost versus returns were as follows: attic to bedroom conversion - 71%; Basement remodel - 62%; Bathroom remodel - 52%. Addition returns in the midwest were as follows: Sunroom - 53%; 2nd story addition - 65%; extra garage bay addtion - 57%; full bath addtions - 59%.

One other significant factor of note....the upscale home return numbers were different in some cases based on the specific amenity. Decks, master suites and fiber cement siding replacement all returned 3-5% more per project than on the median priced homes.

While this discussion is always helpful in deciding what to spend money on in your home, we also remind our clients that the most important factor is 'quality of life' when determining how to allocate our financial resources on your real estate investments. If it makes you happy AND you intend to stay in your home for an addtional period, the return on monies spent is always more intangible in a positive way.

Questions? Comments? Greg@GregCooper.com or 317.848.GREG (4734)

SO you think we've got it bad? Say hello to the state of pain....California.

California's October home sales slide 40%
Median resale home price falls 9.9%; housing starts off 28%

The rate of sales for single-family, detached resale homes plummeted 40.2 percent in California in October compared to the same month last year, while the median price dropped 9.9 percent the California Association of Realtors trade group reported Wednesday. The California Building Industry Association reported that total housing starts in the state fell 30.9 percent from January through October in California compared to the same period last year. Leslie Appleton-Young, chief economist for the association, said in a statement, "We expect further weakness in sales over the next few months as the liquidity crisis plays out." The group's Unsold Inventory Index was 16.3 months in October, indicating that it would take an estimated 16.3 months to exhaust the supply of for-sale homes at the October sales pace. The index stood at 6.4 months in October 2006.

A for-sale inventory of about six months is considered to indicate a market that is roughly in equilibrium, with a supply greater than six months generally indicating a buyer's market. "Financing issues have dogged entry-level buyers since early 2007, but they spilled over into the middle- and upper-tier markets in the last few months," said William E. Brown, president for the Realtors group. "The decline in sales at the upper end of the market contributed to a significant decline in the statewide median price as even well-qualified borrowers had difficulty securing financing."

The median price of an existing, single-family detached home in California was $497,110 in October, down 9.9 percent from the revised $552,020 median price in October 2006.

The 10 cities and communities with the highest median home prices in California during October 2007 were Newport Beach, at $1,575,000; Santa Barbara, $1,275,000; Cupertino, $1,033,000; Danville, $1,017,500; Los Gatos, $1,005,000; San Carlos, $927,500; Redwood City, $912,000; San Ramon, $835,000; San Clemente, $832,500; and San Mateo, $829,500.

The 10 cities, city areas and communities with the greatest median home price decreases in October 2007 compared to 2006 were Palm Springs, down 64.6 percent; Los Banos, down 27.7 percent; Elk Grove, down 27 percent; Galt and Stockton, down 26.1 percent; Antioch, down 25.3 percent; Merced, down 25.1 percent; Salinas, down 25 percent; and Walnut Creek and Wildomar, both down 24.9 percent.

The California Building Industry Association, in a separate announcement on Wednesday, reported that housing starts, as measured by building permits issued, dropped 28 percent in October compared to October 2006. There were 7,726 building permits issued for housing units in the state in October, according to the report.

Housing starts, as measured by building permits issued, dropped 46.3 percent in that market area from January through October this year compared to the same period last year, while falling 39.3 percent in the Bakersfield and Oakland areas, 35.1 percent in the San Diego area, 30.1 percent in the Sacramento area, 27.9 percent in Stockton, 23.5 percent in Modest, 20 percent in Los Angeles, 17.2 percent in Visalia-Porterville, 16 percent in Santa Ana-Anaheim-Irvine, and rising 5.6 percent in Fresno.

Considering Indiana has felt about a 9% drop October 2006 to October 2007 in resale units, we're certainly not feeling the pain that our friends to the west are.

QUESTIONS? COMMENTS? As always you can find me at Greg@GregCooper.com or
317.848.GREG (4734).

SEEING THE BIGGER PICTURE.....For those of us involved in the Real Estate business, it's more than a trite metaphor. Just as this view from inside the new Lucas Oil Stadium in Indianapolis frames a distant image of downtown Indy, we must look far into the future to see the business in perspective as well.

There's little doubt that our country and more locally our region and city are being affected by challenges in the housing market. Excessive supply, marginal economic growth, subprime mortgage defaults and property taxes all are contributing to our current real estate stagnation. Unlike the early 1980's when the overriding factor was interest rates in the upper teens, this troublesome market has little to do with excessive mortgage numbers. There has been in a sense a perfect storm of issues in our local market across Indianapolis. All of the above factors have forced the housing market into a slowdown. The only real question now is when will we see the up side of the trough?

Again, unlike the early '80's, there are potential home buyers in the marketplace actively looking at real estate as an investment. The first time home buyer market has moved steadily forward in 2007 with sales in the 1st time purchaser market remaining relatively strong. For that prototypical initial home buyer, it's been a simple question of 'how much down and how much a month.' While a higher than normal supply and overall stagnation has slowed their decision process, they still have moved into the market and made acquisitions. They don't care about a quarter of point extra in interest from 18 months ago. In the historical sense, interest rates are still incredibly low. That fact is the reason first time buyers have continued to seek the American Dream.

The issues of property taxes, over supply and recent foreclosures have been an enormous burden on the resale market for both seller and buyer. Those individuals have a home to sell, seen their equity slip, watched other properties in their areas fall into foreclosure and overall values fall. Then consider the effect of slightly higher interest rates for those move up purchasers. If they must look at 1 1/2 times the the value of their current property in order to be motivated enough to move, the end result is much harder to reach. With higher rates, in many cases mortgagees could be facing double the monthly house payments to actually make a move to a better home. Simple economics dictate a much lower success rate for that equation.

So where is it all leading us? I recently had a prospective home buyer who had viewed dozens of properties tell me he was waiting for the market to hit bottom before he actually bought. As I shared with him, virutally NO ONE actually buys at the very bottom. Like the stock market, most who want to buy at the bottom in real estate usually end up doing so when the market has in fact turned and is on it's way up. That risk carries with it the potential that long term interest rates will have turned as well and are higher than they are as the market nears the bottom on it's way down. Much of where our current real estate market exists now is psychlogical and in fact has been hugely influenced by the media. The day is coming when some positive news eminates from the media regarding the real estate market. When that happens we'll see a mini stampede to buy property from the current pent up demand. It won't drive prices up 20% locally in a year like one of the coastal markets but it will result in unquestionable equity growth for those that purchase now in Indianapolis.

AS always.....contact me at 317.848.GREG (4734) or Greg@GregCooper.com

FALLING... The sales rate for previously owned single-family homes dropped to its lowest level in about 10 years, and the price of resale single-family homes, condos and co-ops dropped 4.2 percent year-over-year in September, the National Association of Realtors reported today. The trade group also reported that the for-sale inventory of single-family homes reached 10.2 months in September, which was the highest level since February 1988 when it was 10.3 months.

The inventory is a measure of how many months it would take to exhaust the for-sale supply of resale single-family homes at the current sales rate. Total housing inventory, for single-family homes, condos and co-ops reached 10.5 months in September, which is up 43.5 percent compared to a 7.3-month inventory in September 2006. The seasonally adjusted annual rate of existing single-family, condo and co-op sales dropped to 5.04 million in September, down 19.1 percent compared to September 2006 and down 4 percent compared to Wall Street expectations of a 5.25 million rate. The adjusted annual rate is a projection of a monthly sales total over a 12-month period, adjusted to account for seasonal fluctuations in sales activity. It was the lowest rate for combined resale single-family and condo/co-op sales since the National Association of Realtors began reporting the property types together in 1999. The September single-family rate of 4.38 million was the lowest since January 1998, when it was 4.18 million.

The median sales price of existing homes dropped 4.2 percent to $211,700 and the average sales price dropped 3.2 percent to $257,800 in September compared to the same month last year, the Realtor group reported. It was the largest year-over-year drop in the monthly median price since October 2006 when the median price fell 4.3 percent.

Mortgage-market problems disrupted sales and prices, the National Association of Realtors reported, though prices rose in the Northeast and Midwest.
Existing-home sales for the third quarter reached an annual rate of 5.42 million, slightly higher than the group's expectations of a 5.38 million annual rate for that quarter.

SO....what's it all mean? Many of us in the real estate industry have October 31 marked on our calenders for reasons other than Halloween. It's the day of the next Federal Reserve meeting and most likely the day we'll see another interest rate cut. The only issue now is whether it's 25 or 50 basis points (1/4 or 1/2 reduction in the prime). Since major economic recessions have routinely followed significant downward trends in the housing market, one could make a good case for a half point reduction. All eyes will be on the Fed Governor's meeting on 10/31. Whatever they decide will be a major factor in our country's economy in 2008.

Here's another thing it means: The pent up demand for homes is getting pushed closer and closer to the edge of action. There will come a day soon when moderating prices and falling rates will shove the indecisive buyer back into the market. Whether that's in the 1st quarter of '08 or beyond are still to be determined. When it happens, those that have bought real estate in the trough that we're in now will be very pleased by their decisions.

AS ALWAYS you can reach me at 317.848.GREG (4734)
or Greg@GregCooper.com

Does the media have ANYTHING good to say about Real Estate?

I was recently interviewed about Indianapolis Real Estate by CNN Money for a November publication date. In having many dealings with the media in the past I've learned that you must have your facts 100% straight and present them in a clear and concise way. In essence it's like a politician speaking to the press which frankly isn't much of a surprise anymore. Business has boiled down to politics in many cases anyway. The questions that were asked were inflamatory and certainly had a direction. "Why has Indianapolis' equity growth become so anemic?" "Isn't it a terrible time to buy real estate in Indianapolis?" "Doesn't being the most affordable major city in America for homes become a disadvantage at some point?" I must admit I had to laugh at that last one. Frankly since Jim Cramer went on his tirade about Indiana real estate on the Today Show a couple of weeks ago I was surprised I hadn't gotten these questions sooner.

Cramer is the loud mouthed media darling who blathers away every night on his 'Mad Money' show on CNBC. Cramer pontificates on everything from stocks to real estate in his holier than thou mode of making every minor financial detail a looming crash and burn. He's taken the trouble to appear twice on The Today Show with Matt Lauer and both times has been less than generous to Indiana real estate investors. Most recently he was on with the National Assocaition of Realtors president who calmly and politely recited statistics while Cramer rolled his eyes like a teenager being questioned about their 3000 text messages in a month. Cramer's job is to stir up, create controvers and exacorbate the obvious to develop television ratings. What he either fails to understand or could care less about (more likely) is that people's liveliehoods can rise and fall with the headlines he creates.

Look it's no secret what I do for a living so that being said I do have an opinion that does have some degree of bias. Post disclosure, here's what I believe to be true based on many, many outside observations of our real estate market in it's current state. It's what I said to the CNN Money reporters and numerous other media pundits over the last several months:

"Those individuals who purchase real estate in the Indianapolis market in the next several months will look back on it as one of the best financial decisions of their lives."

There are those who are more optimistic than I am and have offered those opinions freely. Moody's Financial has repeatedly listed Indianapolis as one of the top five cities poised for a huge financial rebound in it's housing market. At the top of their list:

1. Dallas-Fort Worth (through 1st Q 2009) - Growth rate: 6.4 percent

2. Indianapolis
Growth rate (through 1st Q 2009): 6.3 percent

"Indianapolis is riding a few trends that are bringing about an early recovery in its real estate market. While Indiana's capital city did join in the housing boom this decade, prices didn't reach the stratosphere. Indianapolis still suffered through the downturn, though: Building permits for new homes dropped 30 percent from their peak in 2005. But the housing market hit bottom earlier here than in most parts of the country - during the last quarter of 2006. Now, with the local economy poised to grow faster than the national average over the next two years, house prices are projected to post a respectable gain."

For those naysayers, and there are many, mark this time down. Let's have this talk again in 24 to 36 months. Let's have it again in 60 months. Time will indeed tell if hysterical television talk show hosts or sound economic decisions will rule the day in our real estate market.

QUESTIONS? COMMENTS?
greg@gregcooper.com
317.848.GREG (4734)

You just never know who you'll run into at the Starbucks in Carmel, Indiana.

As I walked across the parking lot to my car, I vaguely recognized the figure standing about 20 feet away. While he was slouched and shaking a bit from his illness, Muhammed Ali was as pleasant and approachable as any public person could be. Having no shame about interrupting his day, I walked up and introduced myself. He smiled and graciously agreed to a picture. His wife was inside getting coffee as they traveled from their home in Michigan to Lousiville on a family matter. We took several photos of which this is the only one that I actually look reasonable enough to post (scary thought). Muhammed playfully put his fist to my chin and smiled for the first one, then realizing I had the 'you've just met an international icon' stupid grin on my face, I retreated to a very basic side by side. As we did this a bus load of High School students stopped nearby and began to pile out. Several of the teen agers recongized him and came over as to visit. As he began the first of numerous new photo ops while being hugged by the cute 17 year old females, he looked at me and in a whisper said "Can't disappoint my fans." His huge grin told the rest of the story. I laughed out loud, thanked him again, and backed away. Even though his body is failing him...his mind is still there in full force.

Random thoughts actually pertaining to the real estate business......

1) Interest rates are coming down. Look for the Fed Chief Bernacke to lower rates at least a quarter discount point next week and maybe as much as a half to combat the national housing market problems. Between the rates falling and the lower demand/increasing inventory, there are great buys to be made in the housing market right now.

2) Two critical questions every home seller must ask themselves in order to successfully navigate the market. First do you NEED to sell? If you don't have the stomach the adjust your price to meet the sliding market, you should give serious thought to postponing your move. Having said that, if you're a move up buyer, the timing is still good. If your current home is worth 3% less than a year ago but you'll buy something else up the price ladder at a less value also, you will still be pleased with your decision over the long haul. That's what real estate is now....a long term investment. Flippers had best be following the CYA strategy in this market because it's tricky.

Secondly, as a seller do you have the equity to sell? If you bought a home a year ago with little down, you probably don't have the position to sell in this market. Reconsider your timing or the possibility of leasing the home if the risk is acceptable.

We have acutally had to decline certain potential homes to sell with people who wanted to list with us because they were simply not in a postion to recognize a sale in our current market. If someone bought two years ago at the peak of the market and has their home mortgaged above what they actually paid for it, we probably can't help them and yes, you cannot believe how often this occurs.

On that note, a recent title company survey on the closings they conducted across the USA in 2006 revealed some startling data. Of all of the closings, over 38% were done with ZERO money down by the purchasers. That means that most of those buyers were upside down in the equity in their homes from the day they closed. Is there any wonder why we have the delinquency rates we do right now relative to mortagages? Is it any surprise that lending criteria will get tighter as the next 12 to 18 months rolls by?

What you see is not always what you get. Online home shopping presents its own unique set of challenges.

It's so easy to shop online for just about anything these days. You can use Google, Froogle, Yahoo, or any of the shopping search engines to find everything from recliners to shoes, airlines tickets to t-shirts. More than 85 percent of home buyers start their search for a house online as well. The only problem is that things on the Internet are not always what they seem.

That's not such a big deal when it comes to a $60 pair of shoes. But it can be quite problematic when you're talking about a house priced at $350,000. Based on the e-mail I've received over the last couple of years, I've come up with a list of six mistakes home buyers make when shopping online for real estate, and the mortgage they need to pay for it:

Mistake #1: The house you see online is the house you get.If you saw a house advertised on television, you'd wonder exactly what you were buying for your money. But find a house online and that skepticism goes away. Some buyers feel confident enough to make an offer for a home they've seen only online.
What's that about? If I was writing the description for a property I was trying to sell, I'd make sure it sounded as fabulous as possible. The only point of writing that description would be to get a prospective buyer through the door. So when you see a photo of a house online that looks interesting make an appointment to see the property in person. That way, you'll know what you're buying is real.

Mistake #2: A beautiful photo, virtual tour or video means the house is in perfect condition.There are things you can see in a photo, virtual tour or video -- and then there's everything you can't see. Clearly visible is the décor. But the structural and overall physical condition of the property may not be as apparent. Don't assume that a fresh coat of paint is simply covering a dingier coat of paint. Instead, when you walk through the property, keep your eye out for red flags, such as water stains, bad smells, a freshly painted basement (which could be hiding mold or moisture stains), doors that don't shut, and cracks bigger than 1/8 inch wide.

Mistake #3: Assuming the neighborhood is as nice as the video tour.If a seller has created a video or taken a series of snapshots of the exterior of the home, it's possible you'll get a feel for what the neighborhood is like. Again, don't assume that what you're seeing is real. Savvy buyers will spend time walking the streets of a neighborhood, getting to know the housing stock, local store owners, recreational opportunities and schools. There's no substitute for using a little shoe leather.

Mistake #4: Believing that a fabulous Web site means you're dealing with reputable professionals (agent, title company, lawyer, home inspector, etc.).
It takes about $50 and a few hours to put up a fairly impressive-looking Web site. Maybe the company behind that Web site is reputable -- and maybe it isn't. But if you just go by the graphics and design of the Web site without checking to see who the folks are behind the beautiful pictures, you won't know who you're dealing with.
Whether you're looking for a real estate agent, title company, real estate attorney, home inspector or other player in the real estate industry, you should take the time to do your due diligence and find out everything you can about the individual and the company he or she works for. Real estate agents, brokers, attorneys and title agents are all licensed by the state. You can start with the agency or department that licenses these professionals in your state, and then use an Internet search engine to dig up more information, such as complaints or lawsuits that have been filed against the company or individual. Don't forget to pay a visit to the professional's office. You can tell a lot about someone depending on where they work, and how long they've been in business.

Mistake #5: Believing a written description of a property or neighborhood is accurate if you read the same thing in enough places.
It doesn't matter how many times you read the same description of a property, you won't know it's real until you've been there and seen it in person. Remember, just because an agent says the condo has a "lake view" doesn't mean you'll have a full water view. It might mean that if you stick your neck out the window and turn, you'll see a sliver of water.

Mistake #6: Believing the interest rate you'll get at the closing is the same that you've seen online.
One of the most popular mortgage scams is the "bait and switch," and it's even easier to get away with it on the Internet. Here's how it works: You'll see a great interest rate online and when you call to follow up, you'll be told either that the rate has expired (at which point the lender will try to sell you on a more expensive loan) or that you've qualified for it. If you've "qualified" for the rate, you'd better check your mortgage documents thoroughly at the closing to make sure the rate you thought you were offered is actually the rate that is on the papers you're signing. Once you sign the papers, it's a lot harder to get the lender to live up to his or her initial mortgage commitment. (Of course, you'll have a stronger case if you have that rate quote in writing.)

The hits just keep on coming. A tight market still means incredible opportunity in Indiana.....

While the foreclosure rate has edged up, what it really translates into is great values that will pay off significantly in years ahead.


From the Indianapolis Star August 21, 2007:

Manufacturing-related job losses are playing a big role fueling Indiana's foreclosure rate, which now ranks among the highest in the nation, experts say.

Indiana, Ohio and Michigan have all been hit hard by cutbacks and plant closings, and together the three states account for 20 percent of the nation's home foreclosures. Many of those workers affected were homeowners.
"If you have economic problems and little equity to fall back on, it all feeds on itself," Tom Dinwiddie, a spokesman for the Indiana Bankers Association, told The Times of Munster.
Peter Novak of the Greater Northwest Indiana Association of Realtors said the fallout of yearslong subprime lending is being felt both locally and nationally. Analysts estimate nearly 2 million adjustable rate mortgages will reset to higher rates nationwide in the next year or so.
Indiana has one of the highest homeownership rates -- about 75 percent -- but it also has the second-highest foreclosure inventory rate.
Novak said some home buyers think they will be able to afford a house through an adjustable rate mortgage, but when the rates increase some are unprepared for the larger bills.
"An adjustable rate is cheaper the first years so homeowners hope their personal outlook will be better in the future and unfortunately that's hardly true. Lots of time they're in the same situation and probably worse," he said.
Low rates of appreciation on real estate values coupled with affordable housing and high loan-to-value loan ratios also are major factors in Indiana's high foreclosure rate, Novak said.
Indiana ranked 44th in the most recent measure of one-year price growth by the Office of Federal Housing Enterprise Oversight. Hoosiers also use more down payment assistance programs, which reduce or eliminate cash down payments.
Home buyers need to be smart about what they can afford, Pamela Stalling, executive director of the Consumer Credit Counseling Service of Northwest Indiana.
"The reality is we need jobs to keep people in these homes," Stalling said. "And they need to be educated on making wise decisions about if they can afford it now or years down the line."

Real Estate and the dog days of summer. Let's face it...the real estate market is a tough place right now. For those of us who love what we do, we're in it for the long haul. It just doesn't change the reality that nationally and locally we're in a very difficult time. That translates several ways. First, nearing the bottom of the trough, it is a good time to buy. There are exceptional opportunities out there that will pay huge dividends down the road as an investment but you must have vision. Selling right now takes backbone and the courage to make smart, strategic decisions. There is no logic to the market. Some homes that are not, at first glance, competitive sell quickly. Good homes that should sell, sit. Should one attempt to market their home at this point in time? First and beyond that always translates into personal need. If your circumstances dictate a move, then do so in an intelligent, aggressive way. This is no time for greed so if you need to sell, be practical.

Long term rates edge down. For a change last week, long term rates came down to more attractive levels. Long-term mortgage interest rates were down Friday, and the benchmark 10-year Treasury bond yield slipped to 4.68%. The 30-year fixed-rate average fell to 6.23 percent, and the 15-year fixed rate sank to 5.91 percent. The 1-year adjustable held steady at 5.51 percent. The 30-year Treasury bond yield was down at 4.87 percent.

Is the stock market surge over the last 9 months really that surprising? Face it, with real estate numbers slumping all over the U.S., it's not rocket science that since last fall the markets have set record highs. Investors wanted a place to put their money and it wasn't going to be in the real estate market. Watch this carefully over the long haul. When we see a trend that has money consistency leaving the markets for real estate, we may be on our way back up in property value and demand. The last few weeks have demonstrated volatility in the stock market based on one major issue: credit. From the sub prime mortgage problem which is now in the 2nd inning of a 9 inning game to the more recent "A minus" lending downturn, there is a significant credit issue with our housing market that will affect us into 2008.

Property tax issues will remain for a number of Indiana counties through the early part of 2008. Most people think that as Governor Mitch Daniels suspended property taxes to the 2006 level, we were out of the tax nightmare. Wrong. We've suspended our problems, not fixed them. Those reassessments will be back in early 2008 shortly before the 2007 taxes kick in. This whole thing is still very much in flux. From the inside we're hearing that Marion County's problems may be solved by a 1/3, 1/3, 1/3 solution. That is a 1/3 higher residential tax than '06, some form of a consumption tax that will cover 1/3 of the previous tax increase and finally 1/3 higher assessments on business locations that saw virtually NO increase in valuation in the previous numbers. Stay tuned......

National Housing Numbers eyeing the future?
According to First American's CoreLogic which tracks national real estate trends,

"House-price acceleration -- the rate of change in home prices, whether up or down -- is also moderating after 18 months of decline, evidence that downward price trends at the national level are nearing bottom.

Further, prices were still rising in eight of the 10 markets identified by CoreLogic as the highest risk. The highest-risk markets were: Detroit-Livonia-Dearborn, Mich. (-.46 percent appreciation); Warren-Troy-Farmington Hills, Mich. (1.21 percent); Memphis, Tenn. (6.63 percent); Youngstown-Warren Boardman, Ohio-Penn. (4.8 percent); Dayton, Ohio (4.42 percent); Grand Rapids-Wyoming, Mich. (1.55 percent); Toledo, Ohio (1.66 percent); Cleveland-Elyria-Mentor, Ohio (4.89 percent); Indianapolis-Carmel, Ind. (-3.5 percent); and Akron, Ohio (6.14 percent).

Prices continued to rise in all 10 markets identified by CoreLogic as those with the lowest risk: Sarasota-Bradenton-Venice, Fla. (2.51 percent appreciation); Orlando-Kissimmee, Fla. (4.19 percent); West Palm Beach-Boca Raton-Boynton, Fla. (3.97 percent); Ft. Lauderdale-Pompano-Deerfield Fla. (5.57 percent); Washington, D.C.-Arlington-Alexandria, Va. (3.51 percent); Virginia Beach-Norfolk-Newport News, Va. (9.18 percent); Richmond, Va. (7.12 percent); Bethesda-Gaithersburg-Fredericksburg, Md. (2.45 percent); Salt Lake City, Utah (12.96 percent); and Honolulu, Hawaii (7.87 percent)."

PLEASE PASS THIS ON. This is a redundant note that I'm sending to every member of the Indiana General Assembly including the Governor. This would be the perfect place for the "can you hear me now?" cliche...if it weren't so painful. This is an open letter from the CEO of the Indiana Association of Realtors with a rather stunning admission in paragraph four.

"In some (Indiana) counties over 40% of closed transactions are foreclosed properties."

Let's hope someone is listening.

July 13, 2007
Dear IAR Member:
As more counties have completed the property assessment process and mailed tax bills, the flaws in the current property tax system have once again been brought to light. I wanted to take a minute and update you on my perspective on the situation, as well as what your Association is doing to address it.
Some of the tax increases were expected due to the elimination of the inventory tax, the implementation of the assessment process known as trending and other factors, but the magnitude of the increases has been higher than anticipated. Urban areas have been particularly hard hit.
IAR has been in daily contact with the Governor, his staff and leadership in both the House and Senate for the past several weeks, urging immediate action. Our two-part message has been to convey the seriousness of the situation for our markets statewide and to reinforce our long-standing policy goals found in this Property Tax Reform Guiding Principles document.
I don’t need to tell you all the tenuous nature of the residential market. Many counties continue to report declining market activity, and perhaps more distressing, foreclosure rates of an extreme level. In some counties, over 40% of transactions are foreclosed properties. Instead, I would like to spend the rest of the letter outlining our goals in order to help prepare you for conversations with your clients and elected officials.
Short term, we have advocated a restructuring of the rebate that is now in place. Rather than spread those dollars over all taxpayers, it makes more sense to target them to those seeing the largest increases. We think the State could offset increases in excess of 20-25 percent with the dollars currently set aside for the circuit breaker. Local government has a role to play in the short term, as well. The State has given local government the ability to adopt an income tax, a tool that could provide substantial, lasting relief. Urge your local unit of government to use that tool.
Long term, meaningful and lasting reform MUST happen. It also must be rational. One of the most frustrating aspects of our property tax system is its complexity. Discussions of levies, rates, circuit breakers, assessed value, trending, homestead credits, homestead deductions, gross this and net that can make one’s head spin.
The media is often unable to cover the debate in a meaningful way, and elected officials at all levels use the complexity to avoid blame and confuse the issue.
Here are my thoughts on how to ensure the viability of our markets and ensure economic opportunity for homeowners, investors and businesses alike:

1. Eliminate township level assessments, move to county assessment
The wild and inequitable inconsistencies in assessments, documented by the Indiana Fiscal Policy Institute study supported by your Association, remain part of the problem and are a contributing factor to the unacceptable increases we are seeing now. Assessment responsibility should fall on the County Assessor.

2. Update technology and adopt a uniform data system statewide
The State must enforce 21st century data and appraisal practices in assessment offices statewide, as well as effectively monitor and evaluate results. Should the State find the standards and/or results lacking, they should act to correct practices and equalize assessments where necessary.

3. Modernize the local government structure
Indiana has the third most units of local government in the nation. We have the third most townships at 1,008, the third most sub-county governments at 1,575 and the fourth most municipalities at 567. Many of these elected officials effectively answer to no one and spend taxpayers’ money with little or no oversight. Eliminating them will simplify local government and provide a much clearer picture to taxpayers as to who exactly is spending their property taxes and what they are buying.

4. Reduce reliance on property tax
This is perhaps the most difficult piece of the reform puzzle. There are two choices. Since about 75% of the property tax dollar goes to education and public safety, dramatic cuts would need to be made in those services to achieve substantial savings. Such dramatic cuts are not generally supported, as they would have an adverse affect on the quality of life and economic development potential of the state. The second choice is to provide local governments with alternative sources of funding. This is the more viable long term solution, and IAR will continue to advocate for broad based taxes such as sales and income as a substitution for property taxes.

We also need to understand that the call to reduce reliance on property taxes carries risk for our industry. Two specific examples come to mind. Some legislators have mentioned a real estate transfer tax as a substitution for property taxes. Others have mentioned broadening the sales tax base to tax services, including real estate services. In both cases, the housing market would be harmed, and IAR will remain vigilant on your behalf to insure that these ideas do not gain traction.
In closing, feel free to share these thoughts with your local and state elected officials. It is crucial, after more than three decades of trying and failing, to finally reform Indiana ’s property tax system. Homeowners and all other property owners are counting on it.

Sincerely,
Karl F. Berron
CEO
Indiana Association of REALTORS®