I have seen the
bottom and it is here!

(I hope....maybe....quite possibly.....we'll see....tune in 1/1/09)

I'm taking a leap of faith today. A proverbial high wire exercise without a net. I'm assuming things and we all know what happens when you assume but this time it will be different. Once upon a time Felix Unger demonstrated to Oscar Madison that to assume meant you make an "ASS" of "U" and "ME". I'm hoping my outcome will be more positive.

Assuming that in fact this bill that passed Congress and was signed by the President will allow fewer homes to enter into foreclosure, I believe we are in the lowest trough of the current real estate downturn and here's why:

In 2005, 2006 and early 2007 there were roughly 14,000,000 loans made in the U.S. with a staggering 7,000,000+- being considered 'subprime.' I know, how could we have been so STUPID? It's no shock given those numbers as to why we have the ridiculous mortgage/banking crisis we've seen in the past year and a half. The most recent legislation dubbed the 'housing bill' may go far in curing the foreclosure dilemma because of this bill. Of the 7,000,000 subprime loans, many of which are cascading toward foreclosure, the majority are owned by Bank of America, Wachovia, Washington Mutual and several other large national institutions. The bill as passed will allow these lenders to go back and refinance their bad loans if they choose to a more palatable level of pain for the homeowners. Make no mistake these lenders may still take a hit on these loans BUT if they can save 80% or even 70% of the potential defaults, it will vastly reduce the number of bank owned properties coming into the market place. THAT is the place any housing recovery must begin....reducing the foreclosures.

From that point legit resale inventories will begin to vanish and good grief we may actually see a building market recovery after that. If it all sounds too swell to believe, it is. While we may be on the path to recovery, there is no guarentee as to how long this will take. The factors that may influence that timeline are incredibly wide ranging and volatile. Energy costs affecting inflation which could affect mortgage rates, the value of the dollar, other geo political events unseen today, etc., may all play a role. The most prolific point remains and that being the downturn of bank owned sales potentially declining in the market as a whole. If our bonehead lawmakers got one thing right if even by accident, it may be slowing and decreasing the foreclosure mess that has plagued our national real estate market to a very deep degree.

Questions? Comments? 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)

STUPID STUPID STUPID. While challenging negotiations continue to get property tax relief passed in the Indiana legislature, one side of the political aisle has apparently lost their minds. This week Indina House Republicans were attempting to add numerous amendments including a same sex marriage ban into the Governor's proposed tax relief bill that would cap taxes on a residence at 1% of it's assessed value. Whether or not you are for a ban on same sex marriage has nothing to do with a bill to try and keep people from getting kicked out of their homes from excessive taxation! Come on people, get a brain. Stop playing these idiotic games and get this passed before the session runs out and further pain is inflicted on an already over taxed public. If you're curious, you can use this link and find out how the Governor's tax plan would reduce your property taxes.

Think those interest rate cuts by the Fed are going to have an impact? After a 1.25% reduction, here's the most likely time line on when the rate cuts may actually help.

It's All in the Head.....
There are two major issues facing our current real estate market both locally and nationally if we are to see growth resume in 2008. The first, which we cannot change is oversupply. There have been over 100,000 homes built in the last 10 years in the greater Indianapolis area. That's one NEW home built for every 3 PREEXISTING households. In a word, ridiculous.

The second issue that we can change is psychology. The constant drum beat of bad news has kept many would be purchasers on the sidelines. As we look at the national and local housing inventories, we may be seeing the very early stages of a turn. The national numbers listed in the graphic below are similar to our Indy data right now and that seems to indicate we are near the top and perhaps on our way down in total homes on the market. The new and existing inventories are dipping....which is what we have needed for over a year.

If this trend continues over the next several months, we may well see that overall change in supply that has boat-anchored our market over late 2006 and all of 2007. Couple that with a stimulus package from the federal government, interest rate reductions and property tax relief and you have the makings of a bona fied recovery. At least that's what I'm hoping for relative to our clients as I pace my home at 3 am each night.

So if you must sell or desire to sell, defined by motivation and means to meet the market's demand for your property, what are the most significant things you need to do to get your property on the market? That's the topic for NEXT week's Real Estate Minute online Monday February 3, 2008.

Finally a quick summary of the first 25 days of 2008 and how it compares to early 2007. It's a small sample but still reflects a trend in the market. The geography included all of southern Hamilton County and Northern tier of Marion County including Lawrence, Washington, Pike, Clay, Delaware and Fall Creek Townships.

Pending sales from 1/1/07 to 1/25/07 511

Pending sales from 1/1/08 to 1/25/08 389

(2008 sales in units are 23.9% below 2007 for the same time period)