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.

Five Questions To Contemplate For March of 2009

1) With the current market environment, should you be looking at your home as a long term residence or considering a change?

2) What should I do or not do with my current mortgage commitment?

3) Should I be investing additional money in updating my home?

4) Will my home appreciate in Today's New World Of Real Estate?

5) Is real estate the best investment for my future?

Think about these things relative to where you live and your future. We'll be exploring them further as February evaporates and we head for the Ides of March in Today's New World of Real Estate.

Today's Lesson From Tom Peters.com:
(yes, the guy who co wrote In Search of Excellence and many other phenomenal things).


"It" (the current economic mess) is 100% about psychology. Fixes must first and second and third and fourth be directly aimed at our inherent irrationality—times ten in periods of high stress, and at least as true of the "bestest and brightest" as of the rest of us.


Thank you Tom. Class dismissed. See you all next week.

Conversation Of
The Week:

Expired Listing Seller: "I'd like to speak with you about listing my home"

Me: "Certainly....tell me about your property's history"

ELS: "Well it's been for sale for a year with no showings and no price adjustments."

Me: "Are you aware of the available inventory, how many homes have sold in your price point and location?"

ELS: "No....but I built homes for several decades and I know what this property's worth."

Me: "Have you had an appraisal?"

ELS: "No....by the way you're not going to be one of those agents that keeps telling me to lower my price, are you?"

Me: "Why would I actually want to waste your time with nonsense about supply and demand, inventory absorption and silly little things like how buyers actually feel about your property?"

ELS: "Good....I think we're going to get along just fine...when can you come out?"

Me: "I can be there just after nine on Monday, July 21st, 2011...about the time the market actually recognizes your price. Looking forward to seeing you. One more question Mister ELS....are you aware that we're in the most challenging real estate market since the '70's?"

ELS: "No but I've got the entire Pable Cruise collection on vinyl. I loved the '70's!"

To think some people believe we Realtors are overpaid.

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

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)

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)

Dr. Ruth Wants To Move To Indiana.

So does Dr. Phil, Dr. Drew and Dr. Bombay. Hulk Hogan is very high on the Hoosier state as is a very famous equine and his owner (Wilburrrrrrr). You see every day we get requests for information from very famous people who inquire about various homes available in Indiana. It's not that the noted sex therapist, TV host, MTV therapist, professional wrestler or 60's icon are actually thinking of moving here.They are simply regular people who use the identiy of a famous person as they request information about one of the more higher profile residences we routinely market. Some just want good old fashioned general home information without all the encumbrances that dealing with a broker can entail. In summary they want anonymity. For those who want a free ticket in to the former Hilbert Estate please don't email me this: "Oh I swear Greg, what are you thinking by not taking Robin and I through there? Maybe she wouldn't have left old Dr. Phil if you had...." Trust us....we've heard it all before. From professional female wrestlers with the WWE to various television personalities to dead animals from the '60's, Alex, we've heard stories you cannot imagine.
It's not that we're being unkind, mind you. There are numerous legal, time constraint, never ending tour guide issues that are associated with that property as well as Reggie Miller's Geist area home. There are simply not enough hours in a day, week, month or career to do that.
You may be one of those who actually wants the information on a home or piece of ground and you simply want to be anonymous. That we understand. If at the end of the day, that's what you wish to accomplish, just give us a blind email box and we'll get you exactly what you need, no questions asked. We will be happy to treat you with total respect and
confidentiality if you would please do the same on our end. While the tenor of this post is trite, the reality isn't. In this challenging market, there are THOUSANDS of scam artists or worse who are preying on people's fears and desperation who would do harm to us or one of our clients if we weren't vigilant. Regrettably I was witness to a situation where a seller actually took his own life out of that desperation this year because of the horrid, intentional behavior of a scam artist acting as a buyer. In the end please just shoot straight with us and we'll respond in kind. It will provide with a much more positive environment for all of us, including Oprah, whose IM I'm receiving right now.

Sellers - here's your sign.

In part two of here's your sign, I'll share a bit of data, a dash of reality and a cup full of philosophy all mixed with a hideous amount of cliche. If you haven't suffered an alliterative dry heave yet, read on. First it's the sellers turn to digest reality.

In the previous post of here's your sign, we looked at the stocks of national home builders and projected forward into 2009. Given past performance, it appears we may well be headed for a housing bottom shortly with a potential recovery cycle moving forward next year. I can already hear the giddy squeals of home sellers across America. "If we can just hold out, we can get more for our home!"

Wrong. Wrong. Wrong.

Any seller who adopts that mind set will probably cost themselves tens of thousands of dollars rather than reaping any positive reward. In anticipating a possible beginning to the recovery some time in 2009, we are hoping against a mountain of bad geopolitical possibilities that we're right.

If Iran gets testy, if Russia decides to take back another former Soviet state, if oil goes on an upward rampage, if our new president inplements some new policy that further quashes our economy.....all bets are off.

If our already fragile banking system takes any more severe hits, if too many of builders either custom or track get overly aggressive in adding inventory, if interest rates trek higher.....all bets are off.

Of course these are all national and international issues that don't even begin to tackle the local problems that plague the Indianapolis area such as the property tax issue that won't fully diminish until 2010 for Marion County. Add in changing business environments and ever evolving home buyer tastes and there are still plenty of cold water to throw on a recovery.

In short there are a multitude of factors that could change the path of any recovery over night. If you have to sell or if you want to take advantage of great buying opportunities as a 'move up' homeowner, then the selling equation has NOT CHANGED. You must still be incredibly aggressive in pricing your property to have any chance of getting it sold. Being clueless because you still think YOUR HOME is the one that will defy the odds and sell despite the ridiculous inventory will not get you across the finish line. Get you home priced aggressively NOW or risk spending another winter on the sidelines without a sale.

Every day we talk to sellers that think they just need a Realtor that just pushes a little harder despite a 60 month supply of homes in their price point. Those are the homes that will burn another 365 days on the market for buyers to beat them up with next year. Price is everything. Learn it. Live it. Believe it.....or be a Chicago Cubs fan and 'wait 'til next year.'

Part 3 of Here's Your Sign for home buyers wil be online Friday September 5!

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