With the 2ND half just underway here are some key points to watch for in the coming months in Today's New World Of Real Estate.
INTEREST RATES are holding fairly steady with conventional rates hovering in the mid 5's and jumbo loans in the 7.5-8.0% range.
APPRAISALS are still a nightmare with the new regs that have kicked in as of May 1. The Federal Government in yet another attempt to 'fix' what's wrong with the housing market now requires stiffer rules on appraisers and how, where, what, etc. they do their jobs. As per most Fed dabbling, the problems are worse than ever.
CAP AND TRADE which is one of the most idiotic proposals EVER relative to the housing market has passed (I SAID PASSED) the U.S. House and will now move on to the Senate. If it passes there and is signed into law it will single handedly destroy half or MORE of the equity that American homeowners have. In fact, I'll have a new VIDEO BLOG coming this week about just that subject.
QUESTIONS? COMMENTS? DONATIONS?
317-848-GREG (4734) or Greg@GregCooper.com.
Showing posts with label Reggie Miller's home. Show all posts
Showing posts with label Reggie Miller's home. Show all posts
10.02.2008
Have We Lost An Entire Generation of Home Buyers?I worry a lot.
This meltdown, crash, near depression or (insert your own apocalyptic adjective here) of our economy has got me wondering about the Y generation (you may call them millenials or echo boomers). I've been thinking for some time about the whole concept of our disposable society and the speed of change as it relates to home ownership. It has seemed to me that more and more there's a group of people out there who aspire less to have roots then to have an exit strategy.
It hit me in 2007 when I took a trip to Palo Alto to be a part of a California company's relocation to the Indianapolis area. I was a part of their town hall meeting when they were trying to emphasize the positives of their plant moving several thousand miles east. While one of the positives of the move was certainly housing affordability (Palo Alto is a rather ritzy end of the planet to call home compared to Indy), a number of the attendees were non plused. Yes, there was a lot of angst given that their lives were going to be uprooted. Yet, it was more than that. I got the sense from a number of their best and brightest that owning a home versus renting anywhere was an absolute 'who cares.' It wasn't that they didn't have motivation given the astronomical rent most of these people were paying to share a flat and a bathroom with several absolute strangers in their area. You would think that owning your own 1700 square foot home for HALF of what they were paying to rent with room mates would have appealed to them. It seemed that a number of them were simply not interested. These were bright , aggressive people many among them engineers and other highly educated professionals who had no predisposition other than owning a home was not a priority.
While that trip may have been the starting point, it's been out there a great deal lately and perhaps we 30 and 40 somethings are at least partly to blame. Our culture is more and more of the mindset that walking away from things when they wear out our interest. It's the norm rather than the exception. Spouses, jobs, personal property, economic responsibilities, pets - you name it. Any more if people are tired of it, out it goes. It seems that many of our current young adult generation has just skipped the middle man and decided to keep the fewest roots possible, just in case they get fatigued, like they do with the latest Wii game, with their surroundings.
The home ownership roller coaster started about the time the century turned. Getting a mortgage became like eating at a fast food joint. Place your order, drive around and voila! You're a home owner! Now the tide will flow at an even faster ebb away from ownership. That mindset may increase because we have raised an entire generation of people to dispose of anything they're tired of coupled with the fact that until recently they didn't need savings, a down payment or even significant job stability to buy property. This new world of home ownership is a recipe for a huge cultural, economic change away from said ownership.
Does this generation have the discipline, motivation or even the interest to get back to the future by changing it's ways and actually saving for a house as credit gets cranked down? Will they put off the flat screen TV and latest hot car long enough to think about owning real estate?
Fifteen and twenty percent down payments are a big commit from anyone...let alone a generation that's never really had to make that choice. In the end they ultimately may no longer be interested in doing so.
Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)
9.25.2008
Why We SHOULD Pass A Bailout Plan!!
I am a free marketer. I don't believe in theory in bailouts. Having said that, I hope that everyone listening gets the message that we MUST fix this massive problem that has come out as a result of the housing market crash or else.
To get everyone on the same page, from early 2005 to late 2007, there were roughly 14,000,000 mortgages written in the U.S. Of those about 7,000,000 were subprime. As that's occurring oil goes from $60+- a barrell to $140 a barrell, inflation storms in, the economy begins to tank, more and more homes get foreclosed on, lenders go under, investment houses go under and voila....here we are...and here's what is going to happen if we don't pass some type of bailout:
1) Foreclosures are going to skyrocket. (Government takeover would save millions of homes from foreclosure).
2) As foreclosures escalate, fewer people buy refrigerators, carpet, couches, new roofs, etc.
3) Unemployment goes double digit....at least 10-12%.
4) As foreclosures mount, Americans who own homes could lose 30% of the value in their properties. As an example, in Carmel, a fairly affluent area, there are currently 223 foreclosures. If there's no bailout, the preforclosures numbering about 450 would fall into foreclosure and triple the number of those for sale. That would affect every sale and price point in Carmel and frankly every area of our country. Every price point would be driven a long way down and it would take years, perhaps a decade for it to recover.
While you may not be in favor of a government bailout, this is serious stuff. Don't waste your breath blaming on any one political party or individual because it's MUCH MUCH deeper than that. If we do not act, it's going to be a very ugly time in our country's history.
Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)
I am a free marketer. I don't believe in theory in bailouts. Having said that, I hope that everyone listening gets the message that we MUST fix this massive problem that has come out as a result of the housing market crash or else.To get everyone on the same page, from early 2005 to late 2007, there were roughly 14,000,000 mortgages written in the U.S. Of those about 7,000,000 were subprime. As that's occurring oil goes from $60+- a barrell to $140 a barrell, inflation storms in, the economy begins to tank, more and more homes get foreclosed on, lenders go under, investment houses go under and voila....here we are...and here's what is going to happen if we don't pass some type of bailout:
1) Foreclosures are going to skyrocket. (Government takeover would save millions of homes from foreclosure).
2) As foreclosures escalate, fewer people buy refrigerators, carpet, couches, new roofs, etc.
3) Unemployment goes double digit....at least 10-12%.
4) As foreclosures mount, Americans who own homes could lose 30% of the value in their properties. As an example, in Carmel, a fairly affluent area, there are currently 223 foreclosures. If there's no bailout, the preforclosures numbering about 450 would fall into foreclosure and triple the number of those for sale. That would affect every sale and price point in Carmel and frankly every area of our country. Every price point would be driven a long way down and it would take years, perhaps a decade for it to recover.
While you may not be in favor of a government bailout, this is serious stuff. Don't waste your breath blaming on any one political party or individual because it's MUCH MUCH deeper than that. If we do not act, it's going to be a very ugly time in our country's history.
Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)
7.10.2008
Buying a bank owned home is no cakewalk
From Inman News and Tara-Nicholle Nelson
Q: I'm in the middle of buying a house that is a bank-owned foreclosure. It seems like every step of this escrow has been problematic, and I'm wondering if this is a sign that I should not buy this house. For example, we were supposed to close escrow in 30 days, but it's been more than 45 days since the listing agent told us that our offer was being accepted, and I'm just now signing documents. Now they're saying the bank still could take weeks to sign their documents. Is this normal?
A: All across America, Realtors are hearing a low, anguished drone -- like a really loud, really bad case of tinnitus. That sound is the wailing and gnashing of teeth of untold numbers of innocent home buyers in escrow, those brave (but smart) souls who have gotten past their "buyer's block" and decided to take advantage of this buyer's market. What is causing all this toil and trouble? The dramas and traumas of doing a deal with the bank: buying REO properties (foreclosed homes now owned by the bank).
If you are buying anything but a luxury home, REO listings comprise a huge proportion of the homes available for sale in almost every geographical market. So are short sales, but many buyers and Realtors simply refuse to consider short-sale listings (whether this is right is an issue for another column) because they have a relatively low probability of closing and the elements that increase the likelihood of closing are largely out of the hands of the buyer and buyer's broker.
Expect that the bank will not negotiate on price or repairs after your offer is accepted. Expect that the bank's escrow company or closing attorneys will be inefficient and make mistakes, requiring total and complete vigilance on the part of you and your representatives.
Expecting a tumultuous transaction not only prevents surprises, it serves at least two other purposes. First, it will stop you from obsessing over whether your transaction is "normal" and incessantly wondering why your transaction is so rocky, trying to detect some cosmic or karmic significance of the delays and irritations that can be par for the course in REO home-buying. Secondly, it will force you to focus on the vision you are trying to manifest -- the vision of your life in the home after escrow closes.
As such, smart REO buyers obtain exhaustive inspections and really pay attention to their inspectors' reports. With that said, even the normally simple task of obtaining inspections can be a source of drama with REOs. It's common for the utilities to be shut off, and getting them back on can take time and coordination with an overwhelmed listing agent.
Unfair to you, the buyer? Yes. Want to buy an REO property? Then suck it up and live with it, just long enough to get through your escrow. And keep in mind that most REO sellers are amenable to working with first-time home buyers' programs, down-payment assistance programs, providing closing cost credits, taking 100 percent financed offers, and otherwise helping home buyers in ways that individual sellers may not, so the pros of buying an REO can be plentiful.
When REO transactions drag on and on because of the bank's representatives, I've heard buyers ask, "But I thought the banks want to get rid of these properties? I'm trying to take it off their hands -- why don't they want to make it happen faster?"
My reply? Yes, as an institution every bank "wants" to get REO properties off of their portfolio. That is, it is a formal goal of the institution to get them sold. However, any individual transaction relies not on the motivations of the corporate entity, but on the competence, urgency and day-to-day effectiveness of a bunch of individual humans who are not always hard-wired or being compensated in a way that aligns their motivations with the speedy completion of your particular escrow. Will it get done? Probably so. How fast? Depends on the individuals involved.
In the final analysis, if you make sure you're getting a good enough deal to be worth the possible extra stress, you can come out of an REO transaction like a mom coming out of labor -- feeling the effects, but knowing it was well worth it!
From Inman News and Tara-Nicholle Nelson
Q: I'm in the middle of buying a house that is a bank-owned foreclosure. It seems like every step of this escrow has been problematic, and I'm wondering if this is a sign that I should not buy this house. For example, we were supposed to close escrow in 30 days, but it's been more than 45 days since the listing agent told us that our offer was being accepted, and I'm just now signing documents. Now they're saying the bank still could take weeks to sign their documents. Is this normal?
A: All across America, Realtors are hearing a low, anguished drone -- like a really loud, really bad case of tinnitus. That sound is the wailing and gnashing of teeth of untold numbers of innocent home buyers in escrow, those brave (but smart) souls who have gotten past their "buyer's block" and decided to take advantage of this buyer's market. What is causing all this toil and trouble? The dramas and traumas of doing a deal with the bank: buying REO properties (foreclosed homes now owned by the bank).
If you are buying anything but a luxury home, REO listings comprise a huge proportion of the homes available for sale in almost every geographical market. So are short sales, but many buyers and Realtors simply refuse to consider short-sale listings (whether this is right is an issue for another column) because they have a relatively low probability of closing and the elements that increase the likelihood of closing are largely out of the hands of the buyer and buyer's broker.
Expect that the bank will not negotiate on price or repairs after your offer is accepted. Expect that the bank's escrow company or closing attorneys will be inefficient and make mistakes, requiring total and complete vigilance on the part of you and your representatives.
Expecting a tumultuous transaction not only prevents surprises, it serves at least two other purposes. First, it will stop you from obsessing over whether your transaction is "normal" and incessantly wondering why your transaction is so rocky, trying to detect some cosmic or karmic significance of the delays and irritations that can be par for the course in REO home-buying. Secondly, it will force you to focus on the vision you are trying to manifest -- the vision of your life in the home after escrow closes.
As such, smart REO buyers obtain exhaustive inspections and really pay attention to their inspectors' reports. With that said, even the normally simple task of obtaining inspections can be a source of drama with REOs. It's common for the utilities to be shut off, and getting them back on can take time and coordination with an overwhelmed listing agent.
Unfair to you, the buyer? Yes. Want to buy an REO property? Then suck it up and live with it, just long enough to get through your escrow. And keep in mind that most REO sellers are amenable to working with first-time home buyers' programs, down-payment assistance programs, providing closing cost credits, taking 100 percent financed offers, and otherwise helping home buyers in ways that individual sellers may not, so the pros of buying an REO can be plentiful.
When REO transactions drag on and on because of the bank's representatives, I've heard buyers ask, "But I thought the banks want to get rid of these properties? I'm trying to take it off their hands -- why don't they want to make it happen faster?"
My reply? Yes, as an institution every bank "wants" to get REO properties off of their portfolio. That is, it is a formal goal of the institution to get them sold. However, any individual transaction relies not on the motivations of the corporate entity, but on the competence, urgency and day-to-day effectiveness of a bunch of individual humans who are not always hard-wired or being compensated in a way that aligns their motivations with the speedy completion of your particular escrow. Will it get done? Probably so. How fast? Depends on the individuals involved.
In the final analysis, if you make sure you're getting a good enough deal to be worth the possible extra stress, you can come out of an REO transaction like a mom coming out of labor -- feeling the effects, but knowing it was well worth it!
7.08.2008
Who are your buyers?
All right sellers....it's your day here on America's Real Estate channel.
With all of the confusion about today's home buyers, let's try and quantify who exactly a 'buyer' is in Today's New World Of Real Estate.
Today's buyers are thoughtful, contemplative and VERY cynical. They have been looking at homes for some time and can't seem to find the urgency to make a decision. They trudge through homes for weeks repeatedly finding what would be a good choice only to walk away from every possibility because 'surely we can find a bank owned home for 50 cents on the dollar.' (Pssssst.....here's a hint: You can't. Banks are horrendously backlogged on foreclosed inventory and have no idea what their properties are worth. Odds are slim you'll get them to come to your price and you'll have to wait weeks for them to actually respond to your offer while you miss other good choices).
Today's buyers are not concerned about interest rates, comps or your investment as a seller. 'Hey, time's on our side,' as I was told last week by a prospective buyer....and you know what? They're right. Come Labor Day in Indiana and in many real estate markets across the country there's going to be a sense of desperation in the air. Sellers are going to wake up on September 2nd and realize they could be staring at another winter of paying the bills with no promise that next April things will be better.
Regrettably my trade association, the National Association of Realtors, has wrecked their credibility this year. They and their chief economists stood with stone tablets high on the hill this past January and proclaimed:
'The down market will turn this summer!' 'We are near the bottom.' 'Things will improve in the last half of 2008.' 'Stay calm....all is well!'
When they stole the line from the Titanic's cellist it was obvious they were too clueless to know better. What they have done is a tremendous disservice to home sellers across the country. They created false hope instead of motivating sellers to get their homes priced agressively enough to sell in the most challenging market in 40 years. That's right...this is worse than the late '70's.
Things will improve eventually.
My best guess is we will see some stabilization next Spring with better times ahead in 2010 but NOT before the current foreclosure and inventory mess get cleaned up by natural market forces.
If inflation caused by the high fuel prices pushes the mortgage rates up significantly, then ALL BETS ARE OFF FOR A HOUSING RECOVERY. I would also reiterate what I have stated countless times on this blog: Those that buy during this time will absolutely look back on it as one of the best investments they're ever made.
Those that keep wandering the path from house to house will still be wondering when the bottom will arrive long after values have turned and are heading back up.
Which one will you end up being?
Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)
All right sellers....it's your day here on America's Real Estate channel.
With all of the confusion about today's home buyers, let's try and quantify who exactly a 'buyer' is in Today's New World Of Real Estate.Today's buyers are thoughtful, contemplative and VERY cynical. They have been looking at homes for some time and can't seem to find the urgency to make a decision. They trudge through homes for weeks repeatedly finding what would be a good choice only to walk away from every possibility because 'surely we can find a bank owned home for 50 cents on the dollar.' (Pssssst.....here's a hint: You can't. Banks are horrendously backlogged on foreclosed inventory and have no idea what their properties are worth. Odds are slim you'll get them to come to your price and you'll have to wait weeks for them to actually respond to your offer while you miss other good choices).
Today's buyers are not concerned about interest rates, comps or your investment as a seller. 'Hey, time's on our side,' as I was told last week by a prospective buyer....and you know what? They're right. Come Labor Day in Indiana and in many real estate markets across the country there's going to be a sense of desperation in the air. Sellers are going to wake up on September 2nd and realize they could be staring at another winter of paying the bills with no promise that next April things will be better.
Regrettably my trade association, the National Association of Realtors, has wrecked their credibility this year. They and their chief economists stood with stone tablets high on the hill this past January and proclaimed:
'The down market will turn this summer!' 'We are near the bottom.' 'Things will improve in the last half of 2008.' 'Stay calm....all is well!'
When they stole the line from the Titanic's cellist it was obvious they were too clueless to know better. What they have done is a tremendous disservice to home sellers across the country. They created false hope instead of motivating sellers to get their homes priced agressively enough to sell in the most challenging market in 40 years. That's right...this is worse than the late '70's. Things will improve eventually.
My best guess is we will see some stabilization next Spring with better times ahead in 2010 but NOT before the current foreclosure and inventory mess get cleaned up by natural market forces.
If inflation caused by the high fuel prices pushes the mortgage rates up significantly, then ALL BETS ARE OFF FOR A HOUSING RECOVERY. I would also reiterate what I have stated countless times on this blog: Those that buy during this time will absolutely look back on it as one of the best investments they're ever made.
Those that keep wandering the path from house to house will still be wondering when the bottom will arrive long after values have turned and are heading back up.
Which one will you end up being?
Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)
6.10.2008
Misery Business.
There's no other way to describe how the way flooding has affected Indiana over the past five days. Nearly 11 inches of rain fell in a number of places from roughly 10 p.m. Friday night 6/6 to Noon on 6/7. We've had several additional inches since then which has only added to the pain residents south of Indianapolis have felt. This view from State Road 37 in Martinsville is one of many examples of the mess. As of this post the immense waters have rolled further south and affected addtional counties in southern Indiana.
Across Greenwood, Franklin, Columbus and numerous other communities the flood waters have raged and ruined countless homes, businesses and lives. You can see additional aerial photos of the damage across Indiana here. Readers of the Indianapolis Star have submited numerous photos that can also be viewed.
Now there are additional hazzards in the water, some man created and some natural but all are hindering clean up which will take months.
It seems a bit petty to be thinking about our real estate market at at time like this so for now, we would encourage you to support those in need by donating to the Indiana Red Cross.
Those affected are in our thoughts and prayers. We'll have a market update on less important matters in the next few days.
There's no other way to describe how the way flooding has affected Indiana over the past five days. Nearly 11 inches of rain fell in a number of places from roughly 10 p.m. Friday night 6/6 to Noon on 6/7. We've had several additional inches since then which has only added to the pain residents south of Indianapolis have felt. This view from State Road 37 in Martinsville is one of many examples of the mess. As of this post the immense waters have rolled further south and affected addtional counties in southern Indiana.
Across Greenwood, Franklin, Columbus and numerous other communities the flood waters have raged and ruined countless homes, businesses and lives. You can see additional aerial photos of the damage across Indiana here. Readers of the Indianapolis Star have submited numerous photos that can also be viewed.
Now there are additional hazzards in the water, some man created and some natural but all are hindering clean up which will take months.
It seems a bit petty to be thinking about our real estate market at at time like this so for now, we would encourage you to support those in need by donating to the Indiana Red Cross.
Those affected are in our thoughts and prayers. We'll have a market update on less important matters in the next few days.
6.05.2008
THEY'RE GONNA DO WHAT?
Apparently, any of us who are having a side swipe (or head on) with the real estate business at this moment in time are not already suffering enough. Effective 6/1 Fannie May and Freddie Mercury have updated the underwriting engine for loan applications. In english this means changing the requrements for getting a loan.
The result seems to be an increasing denial rates on loan applications by 20%. Additionally if the application was not submitted for underwriting prior to 6/1 there will not be a 100% financing option. What does this mean? If you have not applied with a lender and had your credit pulled and underwriting findings pulled, you're starting over. From Monday 6/2 on it's a new day in the approval process.
Go Directly to Jail.
Here's the question of the week:
Q: I have a property that is worth $500,000 that I am selling for $300,000. I know it is worth $500,000 because I had it appraised recently at that value. A buyer wants to pay me $400,000 and then have me give him $100,000 back after the closing. Is this legal?
Dear 'Frustrated':
If your property is truly worth $500,000, you should get paid that amount and any contract to sell the property should accurately reflect what you are getting paid for it. If your "appraisal" is accurate, you should be receiving that amount in the fair market. In the end, you know what they say. Appraisals are like......well never mind.
To answer your question, giving $100,000 to your buyer after the closing may be illegal on many fronts. If your buyer is obtaining a loan to buy the property, you may be participating in a fraud against the lender by structuring the transaction to deceive the lender into believing that the buyer is putting money down for the purchase when the buyer is actually getting money back after the closing.
It may also be illegal under the laws of our state and under your local municipal codes that require you to accurately reflect the sales price for any property sold by you. Please consider a trade with a preforeclosure in Mars Hill before consumating this transaction or at the very least GET AN ATTORNEY.
Give Me An F!
Foreclosures continue to rise nationally, blowing the lid off in the 1st quarter of 2008 compared to the 4th quarter of 2007. Locally it's trending the wrong way as well. In 2007 23.7% of all sales were bank owned. In the first five months of 2008, nearly 29% of all sales were bank owned. Want to be thoroughly depressed? Go take a look at how many foreclosures are in your own zip code at RealtyTrac. It's another important factor in further slowing the absorption of inventory in the current market which is a must before any recovery in the housing market can occur.
Apparently, any of us who are having a side swipe (or head on) with the real estate business at this moment in time are not already suffering enough. Effective 6/1 Fannie May and Freddie Mercury have updated the underwriting engine for loan applications. In english this means changing the requrements for getting a loan.
The result seems to be an increasing denial rates on loan applications by 20%. Additionally if the application was not submitted for underwriting prior to 6/1 there will not be a 100% financing option. What does this mean? If you have not applied with a lender and had your credit pulled and underwriting findings pulled, you're starting over. From Monday 6/2 on it's a new day in the approval process.
Go Directly to Jail.Here's the question of the week:
Q: I have a property that is worth $500,000 that I am selling for $300,000. I know it is worth $500,000 because I had it appraised recently at that value. A buyer wants to pay me $400,000 and then have me give him $100,000 back after the closing. Is this legal?
Dear 'Frustrated':
If your property is truly worth $500,000, you should get paid that amount and any contract to sell the property should accurately reflect what you are getting paid for it. If your "appraisal" is accurate, you should be receiving that amount in the fair market. In the end, you know what they say. Appraisals are like......well never mind.
To answer your question, giving $100,000 to your buyer after the closing may be illegal on many fronts. If your buyer is obtaining a loan to buy the property, you may be participating in a fraud against the lender by structuring the transaction to deceive the lender into believing that the buyer is putting money down for the purchase when the buyer is actually getting money back after the closing.
It may also be illegal under the laws of our state and under your local municipal codes that require you to accurately reflect the sales price for any property sold by you. Please consider a trade with a preforeclosure in Mars Hill before consumating this transaction or at the very least GET AN ATTORNEY.Give Me An F!
Foreclosures continue to rise nationally, blowing the lid off in the 1st quarter of 2008 compared to the 4th quarter of 2007. Locally it's trending the wrong way as well. In 2007 23.7% of all sales were bank owned. In the first five months of 2008, nearly 29% of all sales were bank owned. Want to be thoroughly depressed? Go take a look at how many foreclosures are in your own zip code at RealtyTrac. It's another important factor in further slowing the absorption of inventory in the current market which is a must before any recovery in the housing market can occur.
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