Giving Thanks

2007 has brought many opportunities to The Richwine Group.....from the former Christel Dehaan residence that closed by mid 2007.....




....to this amazing 40 acre property in west Clay Township, also recognized as the former Hilbert Mansion. Could there be a new owner in this home's future?




The former Hilbert Estate has been rumored to be sold on multiple occasions. No matter what you read anywhere, there has been no sale to date on the former Hibert residence at 1143 West 116th Street in Carmel, Indiana.

Below is another one of the Indiana and the midwest's finest estates now also offered by the The Richwine Group. It is a stunning Geist Lake area property with nearly 6 acres on the secluded northern shore.



We have been blessed with great success again in 2007. We look forward to serving the Indianapolis area for years to come thanks to the great people we are privileged to work with. Thank you and have a joyous holiday season!

Greg Cooper 317.848.GREG(4734) or greg@gregcooper.com

This is the front view of REGGIE MILLER's Indiana home in the Geist area that is now for sale. Reggie has been a part of our community for over two decades and will remain so in the future. He'll be downsizing to something in our area with more practical space for his needs which ensures you'll still see him at local high school basketball games and around town. We've heard he's even been seen at the local market and been gracious enough to sign an autograph or two for kids who've approached him. Reggie has given much back to our community far beyond the basketball court. It's a privilege to represent him in this transition and have him living in Indiana in the future. In addition to the former Hilbert Mansion, this is clearly one of Indiana and the Midwest's premier estates.

Please see the link to the left for addional photos of the residence.

If you have any questions about this home or the facts surrounding it's sale, please call Dick Richwine or myself at 317.848.GREG (4734).

Here's a video link for Dick Richwine talking about Reggie's home in Indiana:



We'd like to thank Tom Britt and all of the team from www.AtGeist.com for posting this on their site. They are a great resource for all kinds of information in the Geist area!.

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)

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)