Latest Indianapolis Real Estate Market Conditions

Stats were just released late this past week.  In the Indianapolis area, annual sales of homes have increased from this time last year from 26,000 to 27,000.  Also, overall prices have remained unchanged from this time last year.  On the surface that may not seem great, but considering the mortgage market and foreclosure issues, those numbers are phenomenal.  We are seeing houses selling very quickly now.  Some of that has to do with the time of year, but the mortgage market is starting to settle down and buyers are gaining some confidence.  Buyers are still looking for deals, but those “great” deals are going to start drying up sooner rather than later.  My appraisal business has jumped slightly and we have seen more activity on the realty side of the business.  Those pent up buyers I have been talking about are coming out to smell the roses.  The market still has some rebounding left to do, but Indy is already picking up some steam and is poised for a nice rebound.  Are you ready?

-B
- www.investorschoiceindy.com 

Posted by Clayton Posted in: Investors Choice, Indianapolis Real Estate Market, Investment Property Rehab, Mortgages & Lending, Indiana Real Estate, Real Estate No Comments » March 2008

What is that Investors Choice Indy company, anyway…???

I wanted to send out a quick thank you to everyone that visits this site.  Word is spreading quickly about what we do.  Bringing awareness to the community about our projects and idea is wonderful.  I continue to hear stories about title companies, mortgage companies, real estate agents, and other industry professionals talking about what we do.  Even though they may not contribute (although they really should to get more involved), their presence is helping get our name out to the public.  Thank you again to everyone for helping.  Your help will come back to help you in the way of having like minded people share experiences and knowledge.  I hope more of you “lurkers” start to write in to ask questions and give opinions about our topics.  Everyone would love to hear from you. 

-B
IC Indy Guru

Posted by Clayton Posted in: Investors Choice, Investment Property Rehab, Mortgages & Lending, Indiana Real Estate, Real Estate No Comments » March 2008

Are you ready for the flood of buyers??!!

Pent up, demand is ready to burst.  Across the country, nearly 4 million jobs have been added and wages have increased by 7 percent.  The Dow Jones is at the highest level in history and the aggregate national income is at $1.35 trillion.  Put that on top of the recently slowed market, and you cannot help but to expect a surge in the real estate market.  Buyers are bursting at the seams to buy a new home.  The mortgage market is realigning and ready to ease up on their most recent restrictions.  Once those hurdles are cleared, the buyers will be flooding the market.

In addition, the number of households is down by two-thirds  as of the first quarter, which indicates that people are holding back due to uncertainty about the future.  Those opinions are changing as they see more reports about a rebound and notice prices remaining stable.  As an appraiser, I have seen my business decline marginally over the past several months only to see it climb in the past two months.  That bucks usual trends that show the months of August and September are traditionally slower due to kids going back to school.  Families that would normally have moved during the summer months, wouldn’t because of uncertainty or couldn’t because of the mortgage realignment.  They are ready to go now.

As further proof of the mortgage market gaining strength, mortgage applications for home purchases have been rising nearly 10 percent since May.  This data, from the Mortgage Bankers Association, centers on “A” paper loans (good credit), so that increase indicates a rise in quality.  Quite a few mortgage companies shut down, while even more have lost money.  Those that remain have cut their losses and need to make more loans.  They are putting new programs to cater to a larger segment of the mortgage market.

Finally, the rate cuts.  The Fed is expected to cut the interest rates again by the early part of 2008.  That spells even more reason for buyers to come out of hiding.

Many of you have been concerned about buying investment properties.  Every bit of news that is being published gives more support to jumping in now while the fire is hot.  Considering that it will take a few months to acquire, rehab and remarket the property, now is the time to buy in time for the buyers to purchase your property.

Posted by Clayton Posted in: Indiana Real Estate No Comments » October 2007

Indianapolis Bouncing Back - Additional Proof

As a follow up to the post I made a few days back about the Indianapolis housing market, CNN Money and Yahoo published an article that ranks Indianapolis as the 2nd market in the Nation that is ready for a market rebound.  The article reitterates what I said the other night, time to buy low and sell high.  Don’t wait until next year to get in on this market…do it now!!!  This is a wave that every other locale can only dream of.

Ten Cities Ready To Bounce Back
By Paul Kaihla, CNNMoney.com
 

The horror show of America’s residential real estate market just keeps getting scarier, what with the sub-prime mortgage crisis threatening to slash demand for homes while the inventory of unsold properties continues to pile up. It’s enough to send any prudent investor fleeing to the relative sanity of, say, the stock market.

Don’t. Instead, get ready for the bounce-back. The oldest rule of investing dictates that you buy low and sell high. Real-estate buyers aren’t at the gate, however, because most local markets have yet to hit bottom. In fact, most cities won’t do so for another year.

But Business 2.0, working with Moody’s Economy.com, has unearthed 10 major metropolitan areas that are bucking the national housing trend. By the beginning of next year, these markets should be coming back to life — and in our exclusive rankings, we’ve projected the house-price appreciation these cities will enjoy during 2008 and 2009. The gains may seem modest — they range from about 4 to 7 percent — but remember, in the midst of the current housing meltdown, any gain at all constitutes a minor miracle.

What our 10 cities have in common is that they’re relatively affordable. They missed out on the housing bubble, yet they still enjoy steady employment and income growth. Not surprisingly, five of the 10 are state capitals with hefty public payrolls. Even more telling, with the exception of the three Texas metros ( Austin, Dallas, and Houston), the big national builders didn’t make significant incursions into these markets.

“These cities didn’t draw in speculators or investment the way the coastal markets did,. says Celia Chen, the Economy.com economist who crunched our numbers.” “House prices in these places weren’t untethered from the underlying fundamentals.” These underappreciated — but soon-to appreciate — housing markets offer real opportunities to the savvy investor.

Indianapolis

Projected median sales prices for single-family homes:
Q1 2008: $122,940
Q4 2009: $130,630
Growth rate: 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.

Indianapolis’s low unemployment rate has made it a destination for people fleeing cities like Fort Wayne, Gary, and Terre Haute. It’s also relatively cushioned from slowdowns in the national economy because more than a third of its workforce is employed in stable sectors like professional and business services, health care, education, and government. Those white-collar corps also helps boost Indianapolis’s median household income to $50,500 a year. Given that you can buy a four-bedroom, 2,000-square-foot home for less than $200,000, this makes the place the nation’s most affordable major metro.

Posted by Clayton Posted in: Indiana Real Estate No Comments » October 2007

Huge Influx of Foreclosures in Marion County

Last year (2006) saw a spike in the number of foreclosures around the Indianapolis area with a record high of 8,874 properties sold at the sheriff sale. That record is expected to be broken this year as the number of properties sold at the sheriff sale to date (September 2007) is at 6,700. The September sale included a total of 721 properties. Don’t start licking your chops yet investors. More than half of those properties were withdrawn by the lenders or homeowners due to a settlement or the past due balances were paid. Even more were taken out of the sale due to the foreclosure filings by the homeowners. Once a foreclosure is filed by the homeowner, the property is immediately pulled from the sheriff sale. After all was said and done, only 21 properties were left for the picking by investors. By count, approximately 60 investors were present to bid on those properties. Out of the 21 available properties, most were bought back by the foreclosing lender. Those lenders send out a representative to bid up the property in an effort to protect their interest in the property and recoup some of their losses. According to the clerk, only 3.5 percent of the properties put into the sheriff sale were actually bought by investors. It is estimated that in past years, 8 percent of all properties in the sheriff sale were bought by investors. The drop is attributed to those lenders protecting their investment. Typically those lenders are more willing to pay a higher price as they have insurance protection through the PMI (private mortgage insurance) companies.

Don’t get discouraged by this news! The properties that are bought by the lenders are then re-listed by a Broad Listing Broker. These local real estate agents list the properties for sale and are available to us. That is where I find a lot of our Investor’s Choice deals. Through my years of writing appraisals, I have worked with several of those BLB’s and have good relationships with them. In fact, I write appraisal reports for those brokers to help price the bank owned/REO properties. There are a few positives from that deal. First, we are not competing with 60 investors and lender representatives at a sheriff sale to buy the property. Secondly, we receive a special warranty deed from the lender when we purchase directly from them. When we purchase a property at a sheriff sale, we only receive a sheriff’s deed which does not provide a lot of protection from other lien holders trying to collect money. Lastly, I am helping to price those homes and have a “leg up” on the public about those properties. Take advantage of the resources that you have available. Not many investors have the wide range of benefits that are accessible to you, especially at the price you pay.

Lets discuss this more on the Investor’s Choice Indy Forum at:
Foreclosures In Marion County, Indiana

-B

Posted by Brian Lee Posted in: Indiana Real Estate No Comments » October 2007

Indianapolis Housing on the Rebound

Indianapolis has long been used as a test market for many companies such as fast food restaurants, snack food manufacturers and a variety of other businesses. Anybody remember the McDLT© and Olestra©? The reason those businesses use us as “guinea pigs” is the fact that Indiana is known as a “vanilla state“. We typically aren’t on the cutting edge of anything like the east and west coast states, and we are considered by those marketers to be representative of the average American people and aren’t subject to wild opinions.

Likewise, our real estate market follows along with that “vanilla state” theory. One thing my 12 years of real estate experience has taught me is that the Indianapolis housing market is stable and has been that way for many years. We didn’t see the massive price increases like the residents of Florida or California saw two and three years ago. However, we haven’t seen the massive price drops and the “bursting” of the “housing bubble” that those states are experiencing. On average, the Metropolitan Indianapolis area has seen a very modest two to five percent increase in house prices for at least the past 8 years. That is a general percentage as some areas have remained stagnant such as sections of Marion County, while other areas such as Zionsville and Noblesville have seen higher percentages. Ironically, the Zionsville area has very recently seen a larger drop in housing prices.

As long as Indiana remains a vanilla state, we won’t see the rapid price increases or price decreases in the housing market. Knowing that information, it came as no surprise to me to see that Indianapolis placed second in Business 2.0 magazine’s October ranking of the Top 10 cities poised for a housing turnaround. Dallas/Fort Worth was ranked number one. New Orleans, Atlanta, and Montgomery Alabama followed Indianapolis, with Memphis, Mobile, Austin, Houston and St. Louis rounding out the top ten. The magazine forecasts that Indianapolis will see a 5.6 percent spike in housing prices by 2009. Low unemployment, an influx of white collar jobs and ease of finding reasonable housing were all cited as reasons for the market rebound. The magazine went on to state that Indianapolis is “the nation’s most affordable major metro” area.

That percentage spike is not a huge number, but is it very encouraging considering the state of the real estate market throughout the nation. In fact, many local real estate companies are already planning for this rebound. The Indianapolis Star recently quoted Donna Kreps, the general sales manager for F.C. Tucker (the city’s largest real estate company) as saying, “she (sic) credits the predicted turnaround to an increase in jobs in the area, more consumer confidence and lower interest rates.” She went on to say, “her (sic) real estate company is planning for an uptick in business – including increasing its recruitment.”

Again, this does not come as a surprise to me at all. I have been saying those things all along. Sure we are experiencing a mild hiccup right now in the market due to the mortgage predicament, but all of the indicators point to the fact that our city is ready to recover quickly. The doom and gloom seen on the national news about the poor real estate market may apply to other states, but Indianapolis has risen above those states. Now is the time to take advantage of some really great opportunities. Don’t let general news articles and reports, or uneducated opinions prevent you from jumping into that real estate investment arena. With desperate sellers and low interest rates, we are still in a buyer’s market. Buy now while the prices are very low, and sell later as the market begins to rise. What is your strategy for success? What goes down, will always find its way back up.

Lets discuss this more on the Investor’s Choice Indy Forum at:
Indianapolis Housing on the Rebound

-B

Posted by Brian Lee Posted in: Indiana Real Estate, Real Estate No Comments » October 2007