How's the market?

Question: How's the market?



Answer: How do you want it to be?



There's no doubt that it was a rough summer for sellers this year. The average days on market is growing. Buyers are on the attack and they are ravaging the sellers once they decide to buy. Homes that should have sold in 30 days for a reasonable price are still sitting and prices are dropping. Homes that would have sat on the market for longer periods before are now selling. It's very unpredictable but one thing is for certain. If you do not have to sell this year then wait until spring market.


I often read the national market forecasts and in doing so this spring I reported national forecasts (and hoped they were right) that the future looked hopeful and we should begin to see inventory absorbed and by 3rd quarter we should have a supply more in line with the demand. I can tell you now that this did not happen in Indiana. Do not fear...my Realtor colleagues will tell you that while the phones and sales were slow in June & July, mid-August was busier than we have ever been in any past mid-August. We usually slow down in August & September (known as September slump) because school starts and people are getting settled. This year we are hopping. We sold more homes in the past two weeks in my office than in all of June & July combined. Whew...we needed that.


When I say: "How do you want it to be?" my sarcasm comes from reading the forecasters, news stories and experts stories on the Real Estate market. I'll share some of those below so that you can see why some are so confused and why there is so much uncertainty.



Wednesday, August 29th The Herald Times in Bloomington Indiana reported a news story from the Associated Press from New York that read: "U.S. home prices fell 3.2 percent in the second quarter, the steepest rate of decline since Standard & Poor's began its nationwide housing index in 1987, the research group said Tuesday.

The decline in home prices around the nation shows no evidence of a market recovery anytime soon, one of the architects of the index said. MacroMarkets LLC Chief Economist Robert Shiller said the declining residential real estate market "shows no signs of slowing down."

The report came a day after the National Association of Realtors said sales of existing homes dropped for a fifth straight month in July while the number of unsold homes hit a record level.

The S&P / Case-Schiller quarterly index tracks price trends among existing single family homes across the nation compared with a year earlier. Fifteen of the cities surveryed showed a year-over-year decline in prices in June. Detroit led with an 11 percent drop from June of last year."



Friday, August 24 news.yahoo.com/ Washington(Reuters) - The headline states: July new home sales and durables orders rise which offers a compelling lead into an interesting story. A few tidbits to encourage you to click on the link - http://news.yahoo.com/s/nm/20070824/bs_nm/usa_economy_newhomes_dc_4
WASHINGTON (Reuters) - Sales of new single-family U.S. homes unexpectedly rose in July and new orders for durable goods posted strong gains that underlined the economy's strength just before a credit crisis socked financial markets.

New home sales rose 2.8 percent to an 870,000 annual pace last month, reversing two months of declines, and inventories eased, a Commerce Department report showed on Friday.
Analysts were expecting new home sales to dip to an 820,000 sales pace. Home sales in June were revised to an annual rate of 846,000 from the previously reported 834,000 rate.
- and -
Meanwhile, the supply of homes available for sale eased to a seasonally adjusted 533,000, the lowest since January 2006, the Commerce Department said. That represents a 7.5 months' supply of homes available at the current sales pace.
The supply of new homes available for sale is down 7 percent from July 2006, the biggest 12-month drop since January 1998.
The median sales price rose to $239,500 in July from $230,600 in June. That was down 3.4 percent from the same month a year earlier, the biggest 12-month decline since October 2001.
Good story - you should check it out.
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It seems to me that this could be the typical case of the national trends starting at the coastal states and working themselves inward. In all of the articles, statistics and inventory studies that I have it appears that we, here in Indiana, are running 3 to 6 months or so behind the national trends. We did not experience the drastic depreciation levels of some regions but we did not experience the 25 to 28% appreciations rates during the good years either. I can't deny that we are seeing housing depreciation but I do not expect it to be at the same levels of those regions that had drastic appreciation. What goes up does go down but if it did not go up too high, it will not have too far to fall.

Taxes...

First, let me say, go easy on your local officials as they are doing the best they can right now and are under an enormous amount of pressure and stress caused by unhappy taxpayers.



Second, let me address some of the common issues.


1. The deadline is Monday, July 23. In order to avoid a penalty, you will need to go ahead and pay them even if you have a dispute. You can fix the issue after the fact and at a time when your Auditor, Treasurer & Assessor's office staff are in a better frame of mind and not so defensive. Remember, they are just the messengers and they are getting yelled at all day. (Unless it is the auditors office and I'm seeing that this has been the source of many of their frustrations-they told me they installed new software this spring and it caused all sorts of problems).

2. Didn't receive your tax bill?

You may go online to http://in53.plexisgroup.com/map/index.html and look up your property. Hint: If you type in "address", you can only put in your house number and scroll through the results listed for your property. It will not find your property at all if you enter the entire address.



3. Your taxes are very high?

Check your assessment notice from last fall. If you do not have it, go to the website above and print your property info sheet and/or the assessor's card and/or the tax bill to see what your property has been assessed at. It will be broken down as land and improvement values.


Important note: My assessment value on the notice did not match my assessed value on the tax bill. I asked why. They sent me a new updated assessment notice in January but I did not see it because the former owner of the property was the recipient. I had no opportunity to dispute it but will do so when the dust settles. This is why I would tell you to check and compare the two.


There are a few things that will make your taxes higher than before that could be changed.

1a. If the property is assessed at a value higher than you expect your property to be worth, an appraisal is the only thing that may help you. You will need to prove to the assessor that the value is incorrect.

2a. If you had a homestead exemption on your property, chances are it is no longer there. The auditor's office had some sort of a glitch in the new software and many of these disappeared. This is good for a credit on your assessed value and well worth your while to check out. You will see this listed on your tax bill. If it is no longer there, just go in to the Auditors office at the Monroe County Court House and take your copy of your tax bill. They will add it back quickly. I'm not sure what they will do if you overpaid this time. I'm assuming it will be adjusted for you on the November bill but you should ask. You are only eligible for this credit if this is your primary residence.


3a. If you have a mortgage, then you need to make sure your mortgage exemption has been applied. It is also worth a pretty good credit on your taxes. I'm not sure, but I think you may only have this on two properties. You can ask the auditor if you're curious. I know there is a limit but I just can't remember what that limit is. The process for adding this back is the same as described above for the homestead exemption.


4. If you have a tax bill for a property you do not own?

Yes, this has been happening. It happened to me on three properties. The "why" is a long story. Let's just suffice it to say that in two cases the clerk made an error on the data entry process of a property transfer and in one case the clerk wrote in the wrong lot number on the description when the lot next door was transferred. These are both addressed in the auditor's office.

Please do not throw the bill away. Remember the problem of not receiving your tax bill? Chances are, if you have one that is not yours, the person who does own the property probably did not get his/her tax bill. I would recommend putting it in an envelope and mailing it to its rightful owner if you can figure out who that is. I'm fairly certain that the auditor's office will not do so if you deliver it to them even when you explain that it is not yours. Which, by the way, is exactly what you should do as well. You need to have them correct the billing address and get to the bottom of why you received it. I tried to do this last week and after 3 hours in the court house, I was able to fix nearly everything except for these things. The very young man at the counter said he would try to take care of it. KEY WORD: TRY! I'm certain that when I go back in (about 3 weeks from now) to make sure it has been fixed, I will be met with a blank stare and have to start over. I say this not because he didn't care, but because there were about 40 people in that small office space all wanting something from him, none of them very happy. There was, however, a delightful gal there who fixed my mortgage exemption and mailing address issues lickity split. She seemed to know exactly what she was doing and when I asked her, I found out that she has been there a very long time. These are the clerks you hope you will get to.



5. Taxes escrowed with your lender? BEWARE!

Do not assume that the lender will check your tax bills in the way I described above. Ask the lender or the auditor for a copy of what was sent to your lender. Don't wait until the escrow summary comes in November from your lender. Check it out now.

Think about it: The bill for the lot I don't own happened to come to me. If it had gone to the lender who had financed the lot I actually own, they likely would have paid it. Their computer systems may not check the legal description or make sure that it is correct. They could have paid my neighbor's taxes. This could be fun to clean up if your neighbor doesn't want to reimburse you.



I BELIEVE IT WOULD BE GOOD IF THE COUNTY WAS REQUIRED TO PROVIDE A COPY OF THE BILL TO THE PROPERTY OWNER IN THE CASE OF THE TAXES THAT ARE BEING ESCROWED. OR...REQUIRE THE LENDER TO PROVIDE A COPY OF THE TAX BILL WITHIN 14 DAYS OF RECEIVING IT.

We are back to the blog!

It's been a while since my last post and so much has happened since then. We completed renovations and moved into our new space two weeks ago. It seems that we are finally able to settle in and move forward, full speed ahead! We have grown not only in space but our team size has incresed to include our office manager Jean Ruhlen, sales associates Lana Eads, Rich Bettler, Wayne Thacker, Tod Weseman, Angela Beard and Melissa Murphy. It has been quite exciting. The synergy is electric!

In our new space of over 4000 Sq. Ft. we offer a marketing center, a kid & teen spot for our client's family members who do not have the patience to sit through the conversation around buying or selling a house (it is fully equipped with toys & X-Box 360), our large conference room is a great training center but also allows our sales associates to view the new listings via virtual tours at the media center and they can share on the large screen a property the client is interested, showing them not only the pictures & virtual tours but also the GIS plat maps & aerials, Google Earth views & Google map views. Buyers can do quite a bit of shopping and narrow down their search right from office.

Feel free to stop in and see us. We are located at 1600 W. Bloomfield Road on the top floor.

Avoiding Foreclosure

According to Wikipedia, foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property (immovable property) due to the owner's failure to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust". In other words, if you don’t pay your mortgage, the bank could take your home away from you!

Foreclosure could seriously jeopardize your credit and should be avoided at all costs. Therefore, it is essential that you pay your mortgage on time. Should you fall behind in your payments for whatever reason, DO NOT ignore any letters you may get from your lender! They do not want to have to take possession of your home, but would rather see you making payments. Should you need to, however, contact your lender’s loan mitigation department right away and let them know of your financial situation. Depending on the type of loan you have, they may be in a position to help you.

Another option available to you is to call a HUD-approved housing counseling agency at 800-569-4287 to find the agency nearest you. These agencies offer a wealth of valuable information on resources available to you such as government agencies and community organizations that can help.

The following options may also be available to you.

Special Forebearance – If you are able to prove that you have had an increase in living expenses or a decrease in income, your lender may be able to get you a temporary reduction or suspension of mortgage payment.

Mortgage Modification – You may be able to refinance or extend the terms of you loan. This might lower the amount of your monthly payment.

Whether you can take advantage of these options or the many others available to you, whatever you do, DO NOT DO NOTHING! Your credit is at stake. Get help right away.

For more information, check out this website: http://www.hud.gov/

Caveat Venditor!

You may have heard the Latin phrase, Caveat Emptor, meaning “let the buyer beware”. Today’s vocabulary word is Caveat Venditor, meaning, “let the seller beware”.

I imagine most people are interested in saving money, and some so much so that they are tempted to sell their own home “for sale by owner”, for which this Latin phrase was aptly intended.

Maneuvering the closing of the sale of a home takes a trained REALTOR or Real Estate attorney just to be able to catch some of the potential mistakes and charges that aren’t true or accurate. Sellers going out on their own may save a few dollars in commission costs, but they are likely to lose those savings in hidden closing costs that a REALTOR could protect them from.

So remember, Caveat Venditor – Let the seller beware!

Farmers' Market is OPEN!!!

The Farmers' Market is open. I'm so excited. Spring flowers, veggies, bread, music and so much more! We love to go to the market. It's open on Saturdays from 8am to 1pm.

You can get more information at www.bloomington.in.gov/parks or call 812-349-3700.

Selling Tip of the Month!

Curb Appeal is Everything! Now that spring is here, we look forward to hearing the phones ring in the real estate office. Nothing makes the phone ring like a for sale sign in the front yard of a beautifully maintained lawn with spring flowers, fresh mulch, freshly spruced landscaping and a clean & freshly painted home front. Even with all of the web marketing, print advertising & mailings, the yard sign remains the largest source of inquiries. There is nothing more important than curb appeal when selling a home.

Here are a few tips to make your home have the utmost appeal:

Mow the lawn! Every week! And, if your lawn needs some improvement with patchiness, weeds, color, etc., you might call True-Green or Chem-Lawn or a local lawn & garden specialist for some help.

Trim back the shrubs, clear off the dead pieces, plant some spring flowers and add fresh mulch to the mulch beds.

Paint the trim, the front door (if necessary), power wash the exterior & clean out the light fixtures.

Wash the windows and clean out the gutters.

Set out some spring flowers in pots and you should just about have it.

More Legislative Affairs...Property Tax Reduction, Assessment Reform, Elimination of Township Assessment!

On the Indiana Front, the position of the Indiana Assocation of Realtors is defined in the following talking point from our fearless leader, Karl Berron.

The time has come to fundamentally change the way we approach property tax relief. In the past, the strategy has been to raise state taxes and use that money to subsidize property tax bills, or to grant deductions to favored classes of taxpayers. This model cannot be sustained.

Property Tax Reduction

The time has come to allow local units of government to utilize other sources of revenue. This does not mean they can be given a blank check. REALTORS support alternative forms of revenue to replace property taxes under the following circumstances.

The bulk of the new money raised should be used for property tax relief, not new spending.

To help control remaining property taxes, "tax adjustment boards" should be established. These boards would be charged with determining priorities among the many local units of government that can levy property taxes, yet now operate independently.

The 2% circuit breaker is maintained. It is not logical for local government to argue for new sources of revenue on one hand, while not accepting limits on property taxes on the other.

When possible, entire levies should be eliminated, preventing them from growing back.

Property Tax Assessment Reform-Elimination of Township Assessment

Indiana's assessment system continues to treat taxpayers unfairly. The state's failure to reform this antiquated system results in too many taxpayers paying more than their fair share of the tax burden.

For literally decades, studies have recommended moving away from township based assessing. This system, based on 1008 individual approaches to determining value, makes uniform assessments imposible. For this reason, REALTORS support the elimination of township assessment. Responsibility for assessing should be moved to the county level.

Too often, this critical issue gets lost in the maze of other property tax reform discussions. Yet in many ways this is the fundamental change that would form the basis for a modern property tax system. Failing to make this change means many taxpayers will continue to pay more than their fair share.

If you agree, contact your legislators and tell them so!

Trends... Are you up to speed?

Home Trends - What's hot and what's not?

HOT - Cozy, small homes on a big lot.
NOT HOT - McMansions.

HOT - Earth colors - brown, green & hand made accessories.
NOT HOT - The cold look of modern.

HOT - Informal living spaces like an oversized family room and an open kitchen.
NOT HOT - Formal dining rooms.

HOT - Exotic hardwood floors like bamboo and Brazilian cherry.
NOT HOT - Carpeting.

HOT - Mudrooms with cubbies, chests and benches for kids.
NOT HOT - Leaving all your junk in the foyer or the coat closet.

HOT - Marble, limestone, and concrete kitchen countertops.
NOT HOT - Granite countertops.

Lifestyle Trends: Greyfields
- a play on brownfields - referring to obsolete, old, underused retail sites that have prime locations but are no longer correctly configured to meet today's retailing needs.

What's the trend: Changing demographics and the continual need for retailers to innovate are just some of the factors that continue to turn once viable malls into greyfields, says Lee Sobel, author of Greyfields Into Goldfields, published by Congress for the New Urbanism and PricewaterhouseCoopers. Developers are breathing new life into some greyfields converting them into mixed-use projects often with a transit component.

What it means to you: Today both consumers and real estate developers are embracing more walkable, interrelated forms of building, from lifestyle centers with a Main Street feel to mixed-use properties with apartments and condos over shops, says John Norquist, president and CEO of the Congress for the New Urbanism. Investors, too, are finally recognizing that mixed-use and lifestyle developments offer more long-term value than many traditional malls, according to the latest ULI/PricewaterhouseCoopers Emerging Trends in Real Estate survey.

This is just such a cool concept to me. It feels like going back in time. It seems so simple, so convenient and a very stylish way to live and work.

This report is taken from Realtor Magazine, March 2007

Eminent Domain - What's the buzz???

If you read nothing else in this blog, read this. It affects you!

Eminent Domain allows governmental entities to take (and pay a fair market price for) private property to serve the pubic good, such as building roads and schools.

OK, so you knew that. Did you know...

...this long established governmental power has been used in recent years to take land for private development? Recent takings of private homes have drawn the ire of owners and real estate practitioners and prompted efforts by the National Association of Realtors to support home owner's rights over government powers.

...why does this matter to you?...

...Until Kelo vs. the City of New London (Conn.) the vast majority of the population didn't realize that municipalities were taking land for private development. Once people found out, the overwhelming majority found it deeply offensive," says Dana Berliner, senior attorney at the Institute for Justice and an advocate for home owner's rights in eminent domain cases. The result is new laws limiting the use of eminant domain in 34 states. If you're in one of the states that haven't changed their laws, be aware that Kelo makes it even easier for developers to take your dream home for public use.

Realtors are working hard to protect the rights of Home Owners!

Market Stability

Final reports from 2007 as reported in Realtor Magazine by David Lereah from economic data povided by the National Association of Realtors.

"The sky never fell in 2006. There were no bursting bubbles. But air came out of some over-inflated balloons -those markets that experienced frothy appreciation. Final 2006 figures show existing home sales down 8.4 percent for the year, new-home sales down 17.3 percent and housing starts down 12.9 percent.

This year will be better. Home sales appear to have bottomed out, reaching a cyclical low in September 2006. Since then, home sales have been inching up, albeit modestly. Inventories have stabilized, with the national months' supply hovering around 7.3 months since July 2006."

The NAR forecast calls for modest quarterly gains. However new-home sales are not expected to rebound until 3rd quarter. The five year feeding frenzy has been neutralized and 2007 should leave residential real estate quite stable and positioned to once again take its place as a major economic driver for 2008.

Indiana Legislative Affairs Issues: Increased Taxes or Fees on Housing

Imagine a property transfer tax, a sales tax when you decide to sell your home. Can you imagine what this would mean for our Real Estate market? REALTORS oppose undue fees or taxes being imposed on Indiana's housing industry. Some legislators have called for new fees on housing to support new spending! Indiana's housing market has struggled in recent years. Our foreclosure rate remains among the highest in the nation. Our rate of home price appreciation is among the lowest in the nation. Indiana homeowners have more mortgage debt, and thus are more leveraged, than their counterparts nationally. Sales activity has slowed in recent months.

In this climate, we are fearful of the state starting down a policy road of adding new layers of taxes or fees to housing. These fees become a target for increases in the future and for adoption at the local level. As we have seen in many other states, these additional layers of cost can have significant impact on market health as they grow over time.

Did you know?

Real estate accounted for nearly 9% of Indiana's total state economic output in 2003, making it the third largest sector behind manufacturing and government.

Total property taxes paid by owners of real estate were greater than $4.2 billion in 2005.

A strong real estate sector means job creation and income growth.

Home equity is the primary source of asset wealth for most households which means financial security for Hoosier families.

Realtors are working everyday to improve our communities and create value for Hoosiers. We are committed to making Indiana the number one state to do business.

Naples!

Someone left an article on my desk today from The New-Press Business & Money Section published in Naples, Fla. The headline "Sales of new homes rebound" and what a lovely headline that is. Especially coming from the Florida coastal areas. In Indiana we tend to experience national trends months after they hit the larger cities and the coastal areas. While we really didn't experience a bubble here in Indiana, we did see the new homes market slow down. This article makes me believe that our market is going to experience the same rebound in new home sales and that March could be the month for that to begin. I'll keep you posted as we watch the market place here.

The weekly wants & needs posting:

Looking for:

...a home in the Elm Heights area. If you have thought about selling your home and you live in this area, please let me know. I would like to show it. Here's their wish list, Elm Heights from Maxwell Lane to 3rd Street, High Street to Henderson, a four square would be nice but not a must have, a fixer upper is fine, no more than $300,000, at least 2 bedrooms but prefer 3.

I'm looking for a buyer:

...a beautiful newly constructed home in Eagleview II, just minutes from Hwy 37 & the Clear Creek Trail, very large back yard, 2 story over a full walk-out basement, 4BR, 2.5 Baths, Study, a little below $350,000. This is an excellent opportunity for an interested buyer. Price is amazing for the quality offered.

...a very nice 3BR, 2Bath ranch with vaulted ceilings, an open floor plan, breakfast bar overlooking an awesome great room, a nice back yard on a very quiet street in Willow Creek. It is also just minutes from Hwy 37 & the Clear Creek Trail!

Wow, what a weekend. Our phone started ringing mid-week last week and it just gained momentum as we neared the weekend. The bulk of it was from local Realtors calling to schedule showings on our listings for the weekend. As the weekends are a big time for showings, Friday tends to be a big day for scheduling. This past two weeks has been so active that I'm certain this spring is going to make up for a slow 4th quarter in 2006.

I'm encouraged by the recent activity in the market. We listed 4 properties the week ending Feb 16 and 2 of the pended within a week. Both were under $150,000.

Of most interest to home owners? What is your home worth? This is usually the information of most interest to sellers when I to speak with someone about listing their home for sale.

Median prices of single-family homes in 4Q 2006 fell a bit with percentage change from 4Q 2005. Those medians are:

Region Price Change
Northeast $274,600, -2.5%
Midwest $161,800, -4.2%
South $181,700, -3.7%
West $355,100, 0.4%
USA $219,300,-2.7%
Source: National Association of Realtors

Home prices are likely to begin to increase once again this spring. The National Association of Realtors predicted this on Thursday after they reported that median prices fell in 73 metro areas in the final three months of 2006. David Lereah, NAR's chief economist said "When we get the figures for this spring, I expect to see a discernible improvement in both sales and prices. Even in an overall sluggish fourth quarter, 71 areas had price gains, the NAR said. And 14 of those areas saw double-digit year-over-year percentage gains.

As for Bloomington, Indiana, we were not one of the areas affected by the so called Real Estate Bubble. We did not have a bubble to burst! The media is responsible for the 'scare' that we have experienced here but the sellers aren't buying it! Sellers are experiencing longer days on the market. Buyers are trying to low ball based on what they hear and read in the news. Sellers are frustrated but not desperate and their patience is paying off. It makes me chuckle a bit to see parents of out of state students, primarily from areas like Chicago, DC & New York, come along and make these offers of 90% of the asking price for good properties near campus. They just don't get it. They are taking their experiences in their region and seeing it as an opportunity to take advantage of sellers in our market. Well, it's not happening folks. Spring is here and this is the time of year where this type of market is very strong. I see it getting stronger this year and I think it is already better than prime market time last year.

And what about that bubble, it does affect our sales in a different way. Those who are losing equity by the tens of thousands of dollars are coming to this market with their students or jobs and they have houses they are losing money on or can not sell. This affects their buying power when they get here. This in turn is part of the reason for our longer average days on market.

NAR economist Lawrency Yun says: "At least the bottom appears to have already occurred." This is in reference to the markets where losses in value have been significant. He goes on to say: "It looks like the figures will be improving." NAR pointed out that despite the recent downturn in prices, gains for typical single-family homes the past five years have been robust in many metro areas — and explosive in others. In Riverside-San Bernardino-Ontario, Calif., for example, prices have soared 155.3% in the past five years.

And so there you have it. A busy weekend is always exciting for a Realtor! I love it when my sellers are happy.

Indiana Legislative Affairs of concern to Indiana Realtors for 2007

The Indiana Realtors believe that one of the most troubling aspects of Indiana's housing market is our persistent high level of mortgage foreclosures. We continue to be in the top five states nationally in this dubious statistic. Foreclosures take a tremendous toll on Indiana families and our real estate markets. High levels of foreclosure depress property values and sap neighborhood vitality.

Our research shows there are many causes for the problem. Job loss, slow rates of home price appreciation, mortgage fraud, and high loan to value ratios are clear factors. Loose lending standards emanating from the federal government also contribute.

Our experience also shows that a high proportion of homeowners that experience trouble with their mortgages fail to seek assistance. Many of thesed individuals could avoid foreclosure if they were aware of their options and acted in a timely manner. Those who enter foreclousre could minimize their losses by taking propert actions.

In my opinion one of the major contributors to this are mortgage originators who encourage home buyers to take a 1st & 2nd mortgage, make an offer for more than the asking price and ask for the seller to pay the closing costs & prepaids. This works just fine if a home owner plans to stay in the home for many years and if the home may be worth more than the seller is asking. It typically takes about 5 years after a purchase where a person puts down about 10% to hit a break even point in the resale of a home. If the life situation changes and a person needs to sell their home within that time frame then they are in a position where they owe more on the home than it is worth and it would cost them more to sell it than they have in the bank. Add to that the fact that often times these 'no money down' loans come with prepayment penalties and I have seen those be as much as $9000 on a home that is worth about $110,000. Suddenly the lender has all of the equity in the home and the home owner, with no good options, gets frustrated and walks away. In some cases at the time of original purchase it could take a person as much as 10 to 15 years in a home to begin to realize any equity. Here in Indiana we did not have a 'bubble' like many markets experienced. This scenario was not as much of a problem in markets that were experiencing 25-30 percent appreciation. It is a big problem here where we are seeing approximately 4-6 percent and in some areas where job losses are great the housing market has actually experienced depreciation.

The moral to this story: Don't buy more house than you can afford and do not buy as much house as the lender will loan you the money for! Determine your comfort zone in a house payment and save some cash for a down payment before jumping in to purchase a home. A good Realtor will help you do this. Just ask them.

Moral number Two - A very important one....: Use a local lender or originator that you trust. Watch out for the mortgage brokers and check their references, many of them are terrific but there are some bad ones out there who just care about earning the origination fees. The good ones can do very good things for you. The local lenders are often extremely competitive. Avoid the internet lenders at all costs. You never know who you are dealing with.

The Indiana Realtors have been working with the State Legislature to improve this situation. We made great strides over the past few years but we have a lot more work to get out of the 'top 5' list for foreclosures.

Getting Started with Boomer's in Real Estate

OK, this is a first for me, started a new year, started a new company, and now starting a new blog. 2007 is going to be so interesting.

I'm Tracee Lutes, founder of Avenues Realty Group, LLC. After 12 years in real estate and 10 of those with F.C. Tucker/OBR Realtors, I have decided to venture out of my comfort zone (and believe me, comfy it was) and go out on my own. F.C. Tucker has been very good to me and I am leaving a company where I have many friends, many people who I respect and care about and many leaders for whom I have great respect. This was difficult for me, but I felt the need to do my own thing. It's been a terrific experience so far and I didn't realize how many loyal clients, friends and family I had out there. I hope they all know how much I appreciate them.

Well, to real estate. I thought I would share on a few topics that are of interest to many. Let's talk about Baby Boomers and Real Estate, what the scene looks like today and what it may look like tomorrow and beyond. This was something I investigated in depth when I was writing my business plan. Much of the information was published from research conducted by the National Association of Realtors. It is obvious to most that Boomer's have great interest in Real Estate.

What do they think?
96% think that owning a home is a good financial investment.
78% own their personal residence
25% own other real estate in addition to their personal residence

The US Census Bureau figures show that even in the lowest income percentile, half of all households owned their home.

The NAR surveys show that for boomer households of middle income, ($50k to $100k) the equity in their home constitutes 50% of their net worth.

OK ladies, while 2/3's are married couples, stats show that the next category is households headed by women and this makes up 20%...over the next decade, women are expected to be the largest growing category.

The NAR surveys show that half of all boomers will fund their retirement from equity in their home.

And so, what do you think those bursting bubbles will do for retirement plans? OK, so we don't want to go there.

Guess what? They almost all said that when they were ready to buy, they searched the web first.

Now, Avenues is all about service. Of course, everyone says they are about service. In 2006, 94% of my business was from my previous clients or from referrals from my previous clients. I guess that shows that we do what we say we do. It seems easy to do what you say you will do, but for some reason, many don't agree with that.

The foundation of this business is about education and services to our clients and the following information makes me feel as if we are set up perfectly for the future client.

NAR studies show that Boomers are willing to pay for professional service and guidance from Realtors even though they can get so much market data on-line. What they are willing to pay for is service in the form of representation of their interests in complex transactions. They appreciate help in the process of sorting through the vastness of the information available to distill what will apply to their home and how to interpret the data to best price their home, to best prepare the home for market, to make the entire process as easy as possible for them so that it takes very little of their time. In essence, they need to trust their Realtor and know that they will get the best service possible.

There is much more to offer and if you are interested in it, let me know. I'll stop on this subject for now because the rest of the information may bore you completely unless you are some sort of numbers geek.

For next time... How do legislative affairs affect us locally? How does it impact home ownership? What should we be concerned about?