Greg LIVE on WIBC 3/30 can be heard in it's entirety HERE.

The new market stats are in.....and they have a LOT of room for improvement. Better days are ahead but they were very challenged in the last 90 days.





Pricing and valuation, while painful, are not that complicated in Today's New World Of Real Estate:

Fear, Loathing and Market Recovery

It's down to one thing in the world we live in: FEAR. Fear of job loss, fear of survival, fear of no retirement, fear of falling values on one's home, fear of banks failing, fear of things getting worse. Take your pick, the boogeyman's out there.

If people continue to be afraid, spending on a macro scale will continue to decline which will eliminate more jobs, more companies and more stability (for as much as there even is today). The less people spend, the less likely we are to see any type of recovery in the near future. Make no mistake, I've never been much of a Keynesian when it comes to economics but these days I'm starting to wonder. For the record I'm loosely defining that as one who believes in spending our way out of a recession.

I was watching a CNN interview with Martin Wolf, a noted economist and writer for the London Financial Times. Mr. Wolf, while also a non Keynesian, stated that since we have already passed the stimulus bill and the money was going to be spent anyway, the most important thing we can do is get the money into people's hands who will actually spend it. In his opinion the biggest challenge to where we are is that the President is hell bent on the whole 'roads and bridges' philosophy which will do nothing for at least 18 months on the national economic front that in Mr. Wolf's opinion is wayyyyyyyy toooooo late. Mr. Wolf flippantly shared at one point we'd have been better off walking out and handing people money on main street than allocating it the way we have. We can have the argument on how to improve the current mess in terms of massive tax cuts versus massive spending but being where we are, spending the money properly in a way that would make things better is now the discussion. It's not one that will likely be resolved soon.

Having stated the obvious, here's sublime of the where we are. I don't know exactly when we will see a huge turn in the economy but I am convinced that right here, right now there are unprecedented opportunities for success. Opportunities in the stock market, opps in the real estate market, opps in employment in the form of new demand for different types of skills. They are out there....and in the face of fear those who have courage will change their lives for the better. Some will buy stocks, some will buy real estate, some will reinvent themselves and their personal brand and change careers and their lives forever. Some will get entangled in the fear and suffer. Some will embrace where the world is and prosper. The only question for each of us is which path will we take?

...and another one gone and another one gone...another one bites the...

Well, you get the point. One of the most successful home builders in the history of Indiana is closing it's doors. This bizarre economy has claimed another victim in the corporate sense and thousands in the consumer and former employee sense. More layoffs and more peripheral pain in the industries that support housing. What ever you may think, we cannot simply blame C.P. Morgan for failing. It's WAYYYYYYY bigger than that. This is a national economic issue not isolated to this company and it's not over friends. You can see the entire Channel 13 television story with Greg here.

Gosh, sure glad the congress in all of it's infinite wisdom did something to fix housing. Oh, that's right, they didn't. We've now printed 1.5 TRILLION new dollars trying to save the economy and all we could come up with is a pissant $8000 first time home buyer tax credit that will have NO ultimate affect on the overall housing market. The $15,000 credit approved by both houses of congress was whacked by a bipartisan 'negotiating' committee whose identity was not revealed (intentionally) at the time of the signing of the stimulus package. What a load of crap. Fix housing first? What happened to that? How about let's kick housing to the curb. It is obvious now that despite the fact that a 6th grader understands how real estate leads economies into and out of recessions, our Congress and President do not understand or do not care. If we can find $150 million for honey bees we could find money to stimulate housing. Don't bother trying to tell me how honey bees need saving, I'm not arguing that....they just have NO PLACE in the stimulus.

We're not done friends. There are more challenges to come. For our friends formerly employed at C.P. Morgan and the consumers who are left in the wake, you have our significant sympathy. We're all hurting...some more than others.

[As a clarification, the stimulus package the president will sign may have an impact but not in the short term. At best I believe it will be mid 2010 before we see any potential affect on the housing market]

So What Will It Take To Sell Your Home
NOW?

The holidays have passed, the weather has broken slightly in some places and your For Sale sign is starting to look like a permanent fixture in your yard. Your impatience is growing and there seems to be no answer. But there is. Before I share the solution, you must as a home seller ask yourself the most obvious but pertinent question.

Do you really want to sell?

Not you would like to sell, maybe you want to sell, you hope to sell, you have a home you've seen that you would kinda sorta like to move up or down to.

NONE OF THESE WORKS IN THE CURRENT ERA.

If you are not 150% committed to the selling process than you are hurting yourself and wasting money. First of all, bar none, every day of unsuccessful history that your home has on the market costs you money. The initial question every buyer asks is 'how long has it been on the market?' Right there they have another tool to beat you up with in the negotiating process if the answer isn't just a short time. Do NOT forget this: If you are on the market and not selling you are hurting your own position! Get it sold or get it on the sidelines until things improve. Don't stick your big toe in the water...dive in or get out!

Still think you want to sell? Then consider the following solution. If your home has been on the market since before the holidays there is one thing you MUST do immediately.

Reduce the price today by 10%.

Not tomorrow, not next week, TODAY. The market is STILL DECLINING. If you have been on the market longer than 90 days you are less competitive today than you were in November. This is not rocket science. It's 10th grade economics. Sales occur when supply and demand meet. When someone's motivation becomes so great that they can't live without your home, they make an offer. In this market, PRICE DRIVES EVERYTHING.

"Well if they like it, they'll just make an offer." Wrong. That's what 100 other home sellers are thinking too. The problem is that the truly motivated sellers with homes equally competitive to yours have already lowered their prices twice while you've done nothing. Buyers don't have to waste time and emotional energy chasing your home when they have all of those choices from motivated sellers.

"Well those things don't apply to our home" or "our home will overcome those objections." If Ricardo Montleban was still alive he'd be saying "welcome to Fantasy Island!"

"Well it's our Realtors fault." Wrong again. By some estimates over 90% of buyers look online first and if your home is in the MLS you are probably everywhere. Buyers are seeing your home. They just don't like what they see at your price. While we can debate how your home is being marketed in it's presentation, if it's out there, people know about it.

Look, this isn't pleasant but do you want to know and act on the truth or live in the pain of make believe? This is not a market for pretenders. If you aren't adjusting your price to meet the demand of the market you are in fact pretending. That's fine....it is your money. It would just be our opinion not to waste any more of it than necessary.

Oh and by the way 10% may not work. It's possible you are farther off in your value than that and it could mean you need further reductions, especially if the market doesn't bottom out soon. Remember true value is what someone is willing to pay, NO MORE. Painful? You bet. I don't enjoy telling you this any more than you want to hear it but if you want to be lied to, this is the wrong place to come. I'd rather shoot straight with you now so you'll still respect me in the morning rather than be one of the Realtors who deceive just to get you into bed with them. They're the ones who will ultimately cost you a LOT of money.

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

Here's What Happened and Here's What it Means:

Christmas came a bit early, sort of, for the American consumer this week. The Federal Reserve lowered interest rates on 12/16 to the lowest rate they could at essentially 0%. Let's hope this works because the only place to go now is triple dog 0% and I don't think anyone wants to see Paulson and Bernake with their tongues stuck to the flag pole out in front of the school.

What the Fed is trying to do is spur spending either through use of credit lines or some form of home equity line to help the overall economy. If you are a homeowner, credit card user or equity line user tied to real estate you are affected by this in some significant way depending upon how your particular credit is dictated by the prime rate. In many cases home equity loan rates will go down and lower monthly payments for consumers. This lowering will eventually ease pressure on many different forms of credit either directly or indirectly.

The single biggest fallacy of the post credit crash world is that there is no money to borrow. This is simply not true.

Here's what you must have in order to borrow money for a home purchase:

1) A decent credit score which in the post credit crash world means mid 700's.

2) A job. (not always the easiest thing to maintain in Today's New World of Real Estate)

3) A down payment. This means anywhere from 3% to 20% down depending upon load size and credit score. Yes there are still minimal down payment loans available but you need tremendous qualifications to get it.

4) A savings account with actual money in it. Imagine that....saving money and not spending it.

When I spoke on WIBC on 12/17 with Big Joe Staysniak and Terri Stacy it's clear that consumers are struggling to differentiate between the lowering of Fed rates, the buy back of troubled loans by the Fed and the ending of the Fannie Mae/Freddie Mac foreclosure moratorium. These things are NOT all tied directly together other than they all affect the big pot of monetary stew our country is in at the moment.

As I said at the outset, let's hope this works. The Fed has now taken us to 0. Unlike the car commercials or the 1980's song by the group The Fixx, the phrase 'saved by zero' has a much bigger impact, a critical impact on all of our financial futures.

As God As My Witness.....Let Us Give Thanks.




We'll get back to the hard stuff in a day or two. For now...thanks for sharing the ride with me through 2008.

All the best,
Greg Cooper

Greg's appearence on WIBC from 11/25 explaining the latest real estate numbers can be heard here!

___________________________________________________

NO NO NO NO NO!

I like the Indy Star. I am a dying breed in that I like getting the hard copy of the paper every day at home to read with my caffeine. Today I have a grudging disagreement with them. On second thought, why sugar coat it, I'm just pissed off at them.

The top headline that states 'Area home sales plunge 24%' is true but not accurate. That number reflects closings of home sales in the month of October which has NOTHING to do with the current market. Closings are a combination of things that have happened over the last several months and not just October. Why does something that happened six months ago reflect on the current market.?

IT DOES NOT.

The ONLY key number is not the number the STAR used but in fact, in simple terms Pending Sales in October for our area. That number as a 3 month rolling total is down 7 percent from a year ago. It is not a 24% drop as the Star attempts to convince us it is. The Star tells us we are far worse off than the national average. It is less than reported on the National Association of Realtors site that states:

"The median price of U.S. resale homes dropped 11.3 percent year-over-year in October -- the largest ever drop since the National Association of Realtors began tracking the statistic in 1968."

Let's see that's an 11.3% drop nationally versus 7% drop here....hmmmmm.

That is not the figure used in the Star today. I understand where the Star got their numbers. They cherry picked them to blast a headline that gets people's attention and sells papers....I GET THAT. However, they are not telling the entire story when they use that tack and frankly lose credibility on the issue now and in the future. I was on WIBC last night (Monday, 11/24) and preempted their headline by giving the whole picture instead of just a headline. I'll post that audio link at the top of this page today as it's available. In the mean time, yes it's a damn hard time to sell a home and great time to buy one but it's not the Michael Stipe 'end of the world as we know it' in local real estate. It would have been nice if the Star had actually asked someone who knew what the data meant before printing the article.

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

Changing a Life:
My most Thankful Experience.

It was roughly 20 years ago and I was a real estate newbie. I had been assigned a relocation couple who was going to be transferring from the San Francisco area to Indianapolis as a part of the United Airlines move of their maintenance facility. Ping and Dao were an incredibly nice pair of customers to have but we had challenges. They were an Asian couple who spoke broken English at best and I was a clueless Hoosier who had little experience with people of different cultures.

Side note: I've learned since then that understanding and accepting diversity is not about being open minded, I'm embarrassed to say. It's about the actual experience of successfully interacting with and appreciating people of other cultures. Many of us in Indiana think diversity is simply not being bigoted. That's half the battle. Real understanding comes from true experience...not just saying you 'get it.' Those of you in HR are now free to have your heart attack after what I've just written.

They had an additional challenge that weighed heavily on their lives as well. They had recently lost a young daughter to a horrible illness. They were grieving and being uprooted from the only place they'd ever lived, California. Their family was giving them significant pressure to leave United and find other work out west. The opportunity they were being offered to move to the Midwest was in their minds the best for the two of them and their young son. That recognition didn't make it any easier.

We did a great deal of 'attempting' to communicate before that weekend they were to visit and make their home purchase. I understood they lived in a home that would be about $650,000 where they lived near Vacaville, California. It was to be sold or bought out by United after 60 days on the market so that Dao and Ping would be able to make the move and get settled on the right deadline. They wanted to be in reasonable proximity to the Indianapolis International Airport where Ping would work and in a home of similar value of what they were in. Sounded simple enough but with a major language barrier it was still an uncomfortable anticipation for both they and I as their trip neared.

On that Thursday I picked them up at the airport, took them to their hotel and waited patiently in the lobby while they got settled and came back down for us to begin looking for houses. I think we all had a headache trying to understand each other at the beginning but as time went on we worked through it. What happened that day is something I will cherish for all of my real estate career. As we drove up the driveway of the first home, they were engaged in a very animated conversation that I couldn't understand a word of. Ping looked at me before leaving the car and through great effort asked if in fact the price on the home was correct....that it was priced about the same level as their home in California. It was. He shared this with her and there was silence as we walked to the door.

We entered the foyer of the home as I wondered what was wrong...what had I done or not done? Almost immediatly Dao burst into tears. With her face in her hands standing in the main entry to our first house she couldn't control her gentle sobbing. I waited while Ping spoke with her in hushed tones. The next words, I presumed would be the order for me to take them back to the hotel. What Ping said suprised me. 'She's crying because she's so happy,' he explained. 'In California we live 90 minutes each way to my job in a 1700 square foot home on a 90 by 60 foot lot.' 'Here we'll be living in a home we could have never dreamed owning.' We'll have 2 1/2 hours more a day together as a family as my communte will only be about 10 minutes each direction.' 'We'll have a huge yard for our son to play in and be close to his school where we are far away from it now.' 'Our family told us we'd be coming to live in the middle of a corn field.' 'Instead we'll be starting a new life that we never could have imagined for it's quality.'

I was stunned. I couldn't have imagined their perspective. In all of their stress and pain, they recognized in the entry of that first home they had made the right decision. I felt incredibly humbled to be a part of that transition.

Today, their family has expanded by 2, their son is approaching high school and Ping has started a successful business outside of the airline industry. They are happy and content and having a quality of life they never seemed to be in reach of where they were before they moved to Indiana. I got to experience a true life transformation for a family that badly needed it. Every year when the calendar nears Thanksgiving Day, I think about that Thursday in Brownsburg, Indiana when Ping and Dao saw their new life. It's one I will never forget. It's the reason that through all of the pain of 2008 that I will press on in my chosen profession. The profession that allows me, on rare occasion, to play a role in the changing of a life. God bless you Ping and Dao...and may God bless us all in our country on this Thanksgiving 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)

UPDATE: Here is the 28 minutes (comercials edited out) of Greg's WIBC appearence on 10/13. Click here to listen.

If you're looking for the WIBC economic round table discussion from 10/6 please go HERE.

"My problem lies in reconciling my gross spending habits with my net income."
-George Bernard Shaw

What in the world is LIBOR?
The current overall economic challenges we're facing are broad. To boil it down to how the housing market is affected, one term we've all been hearing about in the last several weeks is LIBOR.

The LIBOR benchmark is a key rate that reflects how lending institutions loan money. It affects how businesses borrow money. It affects how people borrow money to buy homes, cars and just about anything else that requires capital. Right now the LIBOR numbers are very high meaning borrowing money is tough. It's high in part because so much money has disappeared from the stock market through many factors (corporate defaults, mortgage foreclosures, etc). In essence, lenders are scared. Hey, we're all a bit uncomfortable right now. But there is some light at the end of the tunnel.

One of the reasons that the LIBOR numbers remained so high is that the money agreed to in the economic bailout has not yet been put to use. It's not been used yet to help the current crisis because we passed a bailout bill in 10 days without really having any plan.

Uhhhhh.....Isn't this what we all feared?

The good news from those smarter than I on these things is that many people do have great faith in Henry Paulson and Ben Bernacke to get the right people and plan in place to use the bailout to help ease credit.

To keep this simple, if you look at LIBOR numbers for the next 30 days, they are still very high meaning borrowing money will still be tough. The 90 day numbers are much lower meaning the markets believe over the next three months money will be easier to borrow. IF...and it's a big if that does occur, car, home and business loans will be easier to get and we may see some progress in getting this mess headed in a better direction. LIBOR getting better is essential. Life getting back to normal (whatever that means) is essential. For all of our sake, let's hope we see some steps in the right direction between now and Christmas.

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

A few thoughts for President Obama

On Monday night October 6, I sat in on a radio economic round table (listen) hosted by WIBC's Steve Simpson with a number of individuals who are far more versed at the bigger picture than I am. Denny Smith, a co founder of the Mutual Fund Store in Indianapolis; Linda Conti, vice president of wealth management of David A. Noyes company, business writer John Ketzenberger of the Indianapolis Star, Dr. Catherine Bonser-Neal of IU's Kelley School of business and yours truly were voicing our opinions on all things economic on 93.1 WIBC, Indianapolis. From the inside I must say it was a fascinating discussion. The summary of it all which I hope our next president hears through the noise that he will be bombarded with is this:

Don't raise taxes.

Don't raise taxes anywhere on anyone at any time during your first term if you hope to have a second. I understand you feel that high earning individuals should pay more. This is not a philosophical plea. This is factual, empirical, statistical, uncomfortable.

Don't raise taxes.

We can argue all day long about why we're in the mess we're in but one of the opinions that came through loud and clear last night from this very wise group of people for whomever the next president is was:

Don't raise taxes or you may crush our economy.

Senator Obama many people liken you to another charismatic leader we once had, John Kennedy. President Kennedy made a historic speech to the New York economic club in 1962 that still resonates today. His major point was this:

"The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system — and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes"

Please take a moment and read the entire text of one of the more prolific economic speeches ever delivered in our country. Senator Obama despite your desire to raise taxes as you've stated, we can only hope you will defer to the greater good of our populace and at the very least keep things where they are. There's going to be a LOT of pain over the next several months. Let's not add to it.

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

Why is anyone surprised?

Last year about this time when we were dangling on the edge of the financial chasm, many of us in the real estate industry were raising the red flags about the housing market. Yes, there were some Realtors, real estate companies and trade organizations (read: National Assn. of Realtors and National Home Builders Assn.) that were still, uh, shall we say shading reality because they were simply too afraid to shoot straight. They were afraid that if they told you the truth that it would all become a self fulfilling prophesy and it would make the markets worse. They did you a terrible disservice by not telling you the truth.

I would have preferred we just get the bad news out there and get past it. The sooner you as a consumer know the facts, the sooner you can deal with them. Oh no, we couldn't possibly do that. It may discourage someone from signing a listing agreement, buying a home or taking a job transfer which would require either or both of the first two from happening. So in the Fall of 2007 we were in the midst of a vast oversupply of inventory and a looming credit crunch and yet some just kept saying they were expecting a turnaround by mid 2008. As a result homeowners who had their homes on the market held out hope that things would get better this year. They delayed making price adjustments and artificially inflated what consumers would be have to pay for a home. Consumers spoke loudly and clearly:

"We will not buy that which isn't an incredible value and even then we're not going to jump without giving it a lot of thought"

That was in June. By August the fear and increasing rate of decline had escalated the buyer's tolerance level. Now, we're almost in total stagnation with where the markets are. Frankly there is incredible clarity in Today's New World of Real Estate at this moment in history.

If you are a seller and hope to get to the closing table, you had better be a fire sale or take your home off of the market. You will only hurt yourself by burning days on the market in an environment where cash is king and buyers are God. If you are a buyer, understand you are in this for the long haul. Real Estate is still a GREAT long term investment. Buy with care, pay incredible attention to lot and location and look ahead past the next 24 months and you will recognize what I've been saying for the last year:

Those that purchase now will look back in five years as having made one of the best investments of their lives.

That is unless Nancy Pelosi chooses to give another speech about who's fault this all is. Then all bets are off.

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

Culture Anyone?

This weekend marks the 11th anniversary of the Carmel
International Arts Festival in Carmel, Indiana.

For starters, here's a hint: Get there before 10:00 a.m. on Saturday morning if you want to see the Chinese Dragon Troup in parade formation. It's a highlight.

When this festival began I remember buying a beautiful sweatshirt that had the festival's logo on it and sure enough when I wore it through Midway Airport, I got numerous questions about Clint Eastwood, Sony Bono and what other famous people did I see around town?

Sorry, that's the other Carmel. Pronounced differently with more water.

In fact, for a FREE festival that has come from nothing but a brainchild, this gathering is a great way to spend a Fall Indiana afternoon. With hundreds of
vendors exhibiting in watercolor, oil, 2D, jewelry, photography, 3D, wood, sculpture, pottery and more, it's a remarkably full art event. The Indianapolis area has Penrod which takes place on the grounds of the
Indianapolis Museum of
Art around Labor Day but for $15 to $20 a pop for admission, frankly it's gotten expensive. If you want a day of wandering booths, galleries
and stores with no pressure, great art, food and people watching, take a trip this weekend to the corner of Main Street and Rangeline in Carmel, INDIANA. While there may not be sand or famous celebrities (unless you count Sony Bono from BEECH GROVE), you will find a totally relaxing way to spend your time and possibly
diminish that credit line a bit.

Want to make the best home purchase in the last 20 years? Get ready.

In part 3 of Here's Your Sign, we're going to step way out on the ledge to talk about the future. In ordinary times, for whatever those even are anymore, we could look at all kinds of empirical data and have a fairly good feel for value and trends. Not in the last 18 months.....not even close. Any realtor or pedestrian who thought they did was either foolish or lying because it's been that tough. We are, however, the most affordable city in America by many accounts including a new list out now in BUSINESSWEEK.

It's my belief that in 2009, we may begin to see that change. What I will not predict is that values will rise, the markets will normalize, the seas will part and all will be right with the world. The one thing that seems to be aligning is a change (every one's favorite word these days) in the direction of the overall market in the next 12 months.

As we discussed in parts one and two of our market analysis, the actual market trends consistently follow roughly 9-12 months behind the top home builders stock prices. During mid July (by most stock charts on or about 7/14/2008), those national builder stocks all switched direction and began trending up. If history repeats as we believe it will, then the summer of 2009 will be the turning point for our home market.

I want to reemphasize several points here. This does NOT mean there's going to be a dramatic turnaround in value. All it means is that we may see the overall trend change from what it's been over the last 30 months. Translating this for home BUYERS, once the trend changes, the psychology of home sellers will change and be much less agreeable to significant negotiation as they should be today. Prospective buyers have been saying for months that 'we want to buy at the bottom.' Well guess what.....we're there. Once the first three people figure out the market is truly going to turn, it's too late, buyers. If you want to take advantage of the most significant downturn in the last several decades, make your purchase before any sign of warm weather hits next year. You want the bottom? It's about to hit us in the head. Be ready and have your checkbook out. Once the reality of change occurs, there will be a stampede from all of this pent up demand. When that happens, you'll want to be the one standing on the sidelines with your shiny new below market home purchase rather than those attempting to get in the game with sellers not so ready to play 'let's make a deal.'

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