Existing Home Sales

Portage Indiana Real Estate Recap February 7, 2011

Throughout last week in Portage Indiana, even through the aftermath of the snow storm, people were getting ready for their Super Bowl parties. Now that the Super Bowl is over, it is time to start planning for next year’s festivities.

Where better to have a Super Bowl 2012 party than your new home in Portage Indiana?

The Portage Indiana real estate market has a wide variety of homes listed for sale. There are many price levels to choose from. In the previous week, prices have remained steady with an average asking price of $90.00 per square foot.

The market can be segmented into 4 quartiles to determine what to expect within your different price range.

For example, if you know you can afford and are pre-approved for a home loan for $150,000, we can determine that you can find your home with 3 bedrooms, 2 bathrooms with square feet between 1,500 and 2,000.  

Within these quartiles, you will find 111 homes listed for sale in the Portage Indiana real estate market. The prices for these homes vary from $130,000 to $180,000.   

At this week’s median price of $154,228 you can expect:

• 3 Bedrooms
• 2 Bathrooms
• .25 – .50 acres
• 1,796 square footage

Portage Indiana Real Estate Week At A Glance:

• 8 New Listings
• 6 Sold Listings 
• 222 Homes Listed
• 234 Average Days on Market

Thinking about buying or selling or know someone who is?

Call, text or email me to help you get started!

Highland Indiana Real Estate Market Summary January 2011

Recent movement in the Highland  Indiana real estate market shows that the prices of single family homes continued trending downward during January.  Home prices made an impressive peak last summer but fell back and stayed flat at the end of 2010.

Compared to other nearby communities which are still experiencing declines, Highland Indiana home values are holding up very well. The condo market experienced an up-tick in January, with the median price of a Highland Indiana townhouse or condo unit increasing $4,500 from $129,900 in December to $134,400 at the beginning of February. Single family homes slipped $1,900, with the median home price currently $158,000.

Single Family Benchmarks:

• New Listings, 17
• Sold Listings, 14
• Inventory, 90
• Average Days-On-Market, 132
• Price Per Square Foot, $112

Condominium & Townhouse Benchmarks:

• New Listings, 6
• Sold Listings, 9
• Inventory, 52
• Average Days-On-Market, 229
• Price Per Square Foot, $101

New & Noteworthy

This bank owned tri-level townhome on Price Circle had been listed on the market last March for $140,000. The MLS is now showing it as a PENDING listing with a price of $89,900. Congratulations to the savvy bargain-hunter who got this diamond-in-the-rough for only less than $64 per square foot.

Trust your local market expert. If you have you are scouting the market for a bargain of your own, or simply need more information about a particular home,  it is my mission to share the information at my disposal to help you.  And likewise,  if you know anyone who is seeking a property to buy, or thinking about selling a property in any of Highland Indiana’s neighborhoods or developments, please let them know about my innovative real estate practice. You can be assured that they will receive the utmost care, foremost marketing skills, and diligent service.

Bargain Hunting Real Estate In Porter County Indiana

Do you know the difference between Foreclosure, REO and Short Sale? Bargain hunting prospectors seeking the diamonds-in-the-rough sometimes use these words interchangeably, so let’s review the basic terminology so we can be more precise when discussing any plans to invest in a Porter County Indiana distressed property. Pictured here are two Portage Indiana distressed homes which are priced below market value. Both are located in top quality neighborhoods. They seem like bargains on the surface. But without lengthy research on the property, and negotiation with the lender, will a buyer find out how much of a “bargain” she will actually be purchasing.

Foreclosure

Foreclosure is the process that occurs when a homeowner stops paying the mortgage and eventually surrenders the home to their lender. This process has several steps. It starts with overdue notices, kindly asking the borrower to catch up. There will be a series of workout people who will try to help get things back on track. Under the Federal HUD Home Affordable Foreclosure Alternative program they may reduce the interest rate or modify the mortgage.

If it all fails the lender will issue a default notice, and eventually a legal suit through county court and eventually an eviction from the property if the borrower has not already vacated. This is a lengthy process and you can imagine that the property is likely to be poorly maintained during this time period of “distress”. Sometimes owners or renters will strip the home of appliances and cause damage, as things turn from bad to worse.

Finally, the lender will salvage whatever residual value, by listing the home on the real estate market. In most cases these homes are sold in as-is condition without the disclosures and clean chain-of-title that a conventional seller will offer the buyer. The entire time period can often a run a year or more while the various steps in the process run their course.

Bank Owned or REO

Real Estate Owned is what happens at the end of the foreclosure process, and it is the worst outcome. The property ends up being vacant, neglected, often vandalized. Banks and lenders don’t really want to own and maintain empty dilapidated homes, but due to the recession they have many on their list of “assets”. The word asset being somewhat euphemistic since the house is probably worth only a fraction of what it once was,  by this point.

So now that lender, often being out of state, and having a list of many of these so-called assets, now goes through another process of selling these homes to bargain-hunters, rehab contractors, and handy homeowners who are willing to buy them and invest in turning them around. After trying to determine it’s salvage value, they will list it with a broker and hope for the best.

In short, REO properties are bank-owned.  And they likely are in need of some restoration and maintenance work, may to need fixtures or appliances.

Short Sale

The short sale is another type of work-out that can take place during the early phase of the foreclosure process, if the homeowner and the lender can’t work out a modification. This is about the only scenario where a Realtor can help out a trapped and struggling owner. Once the homeowner realizes they are in pre-foreclosure trouble they ask their lender permission to conduct a short sale. They write a letter explaining their hardship, such as loss of job, medical issue, or other reason. And th lender will provide a list of supporting documents and questions they will want answered. An experienced agent can assist through this process.

When accepted, the homeowner can then hire the Realtor to market and sell the home at a discounted price to a new buyer. The home, sold in good condition, maintains much of of it’s value. The bank recovers a decent portion of it’s equity. And most important, the home seller walks away from the deal with his credit intact.

There are several advantages for doing the short sale versus the full foreclosure.  Compared to a court ordered foreclosure, where all a defendant’s asset are liquidated to pay the mortgage debt, in the short sale . If the assets don’t completely pay off the debts & fees, the court will issue a “deficiency judgment” for the balance. This will leave the convicted debtor responsible for the remaining debt which will cloud their credit rating for for years thereafter.

By settling with the lender and selling the house to a new and more solvent buyer, the deficiency judgments are usually released making it a win-win for both lender and debtor. And since the homes are often still occupied until the end of the process, the buyer gets a better maintained property.

Buyer Beware

Bargain hunters must always be extra careful with their diligence when choosing a distressed home. Such factors as

• the home’s condition
• whether the home can be financed at all or will requires cash
• the selling bank’s  deal
• the chain of title

are some of the main considerations to closely examine. Like anything that seems too good to be true, buying a “scratched and dented” home is like anything else–you need to do your homework. It takes extra diligence on the part of the agent and the buyer to make sure that one of the many possible “gotcha’s” doesn’t sneak up on the unaware. If you need help navigating the short sale or foreclosure real estate market in Portage Indiana, or the other Porter County communities, allow me help you select that diamond-in-the-rough. Send me a text message with your question.

Patience Needed To Sell Luxury Homes In Valparaiso Indiana

Greater Valparaiso Indiana has a widely diverse selection of homes and population demographics. So when President Obama quipped last week how Republicans were “holding the middle class hostage” in favor of the wealthy, a lot of local area homeowners took notice. Class warfare is the unmentionable subject that politicians are never supposed to say in polite company.

But since he brought it up, let’s take a quick look at the real estate market in 46385. These are the collar communities that make up the outskirts of Valparaiso surrounding downtown. And although they are diverse, they do have some of the highest concentration of luxury homes in Northwest Indiana. Since we know from the media all about the struggling middle class homeowners let’s examine how the luxury real estate market is doing these days, and see how the “hostage-takers” of the luxury home market class are actually doing in our small microcosm of the US.

Luxury Market Snapshot

Across the entire 46385 zip code, the median market price peaked here at $300,000 in January of 2008. But after a good rebound earlier in the year, prices have fallen throughout the summer & fall to a new low 20% down below the peak, with a median price of just $239,584, or an average loss of about $40,000.

Looking at the upper bracket, luxury homes are harder to sell. The pool of buyers is smaller. Government mortgages such as FHA have caps so cash and conventional loans are about the only choices. Jumbo loans were very difficult to obtain during the crisis peak. And an acceptable determination on the home’s appraisal can be difficult if there are no similar homes nearby to compare features and size.

This chart shows how Days-On-Market for the top 25% price segment (homes with a median price of $500,000) stalled out at the end of 2009 and is still 3 times longer than in the golden days of 2007.  Meaning that at the worst point it took an average  of 14 months to sell; currently it’s about 10 months. Lower priced homes sell in the 6 month range.  Note that when properties expire from the market and then are re-listed under new MLS numbers, the clock resets, which can skew the reported data much shorter than the true time span. A close look at some of these individual homes revealed repeated sales attempts, sometimes for for 3 and 4 years in duration.

Depending on how you feel about the plight of luxury homeowners, they do have their unique problems and concerns. A wait of 2 years or more to sell a property may make you wonder who is really the hostage.

Around Valparaiso

Fortunately, Valparaiso Indiana has lots of options for folks with more mainstream or modestly upscale incomes, who might be looking for more conventional single family and townhome communities:

• Salt Creek Commons and South Haven to the West
• Cooks Corner, Aberdeen, and Heritage Valley to the South
• Keystone Commons & Wild Rose to the North
• And many country homes on 1-5 acres spread across the county, such as Jackson and Liberty Townships for people looking for nature and open space.

Whether your dream home is modest or grand, let me custom-tailor a list of properties that match your description, and we can take the  concierge guided tour.

Home Sellers – Feeling Lucky With Your Real Estate Sale?

In case you missed this morning’s headline, Existing Home Sales Swan Dive. That’s right. Sales of existing home sales plummeted 27.2 percent in July. Furthermore, the National Association of Realtors stated that July’s existing home sales is the lowest reading since NAR has been keeping track.

It should also be noted that total housing inventory increased by 2.5 percent in July. It will now take up to 12.5 months to sell the existing homes inventory.

What does this mean for home sellers?

If you’re a home seller, there’s no more time to waste on hoping for a buyer to come along and pay you what you think your home is worth. It’s time for home sellers to get serious and figure out what is their liquidation home sale price.

What are the odds that home sellers will actually sell their homes?

Every real estate market is different, but the growing consensus is the same. Successful real estate transactions are becoming more difficult by the day whether it is due to inflexible home sellers, home buyers remorse, unflattering home inspections and/or below market value home appraisals.

Other mind numbing real estate headlines for home sellers to think about.

• Redfin: Less Than Half of All Home-Sale Attempts Successful in ’09 - The Wall Street Journal
• Nearly Half of the Homes on the Market in July 2010 Had Prices Cut, According to ZipRealty – RISMedia

If home sales is a game of numbers, wouldn’t you want to be on the side with the highest probability of success. Understanding the dynamics of the real estate market is one aspect that your real estate professional must grasp. Working with a local real estate professional who can provide clarity is a must.

Otherwise, if you’re feeling lucky your best bet for your home sale may come down to the flip of a coin.

Existing Home Sales Drop But Move Up Buyers Rise In June

Consistent with most post-home buyer tax credit housing news, the National Association of Realtors® says Existing Home Sales eased lower last month.

An “existing home” is a home that cannot be considered new construction.

The 5 percent drop in sales from May to June was expected, but a closer look at the month’s data reveals some interesting trends.

First, repeat buyers accounted for 44 percent of home resales in June, up from 40 percent in May. That’s a healthy increase for just 4 weeks’ time and the tax credit is a likely catalyst. First-timer buyers bought starter homes owned by former first-timers, who were then free to “move up” to larger, more expensive property.

Housing markets can be trickle-up and, not coincidentally, the jumbo/luxury housing market is now in the midst of rebound.

Second, June’s “distressed sales” accounted for 32 percent of all home resales, up from 31 percent in May.

A figure like this hints at the large role foreclosures continue to play in a Portage Indiana home buyer’s home search strategy.  And why not? The National Association of Realtors® suggests that distressed homes are sold at a 15 percent discount.

Lastly, take note that home inventories are still rising in Portage Indiana. As of July 16, 2010, there were 262 homes actively listed for sale in Portage Indiana and inventories are back to their highs from December 2009.

Overall, the Existing Home Sales data from June is a mixed bag. There’s support for the middle- and upper-price tiers, but a growing overhang of supply. The market looks favorable for buyers given low mortgage rates and strong negotiation leverage.

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May 2010 Existing Home Sales Is Better Than The Headline

Existing Home Sales dropped in May for the first time in 3 months but still managed to post its second-highest since November 2009, buoyed by the expiring federal tax credit program.

An “existing home” is a home that cannot be considered new construction; a resale of an existing home.  Existing Home Sales fell 2.2 percent in May.

The press is calling the drop in sales “unexpected” and disappointing, but a deeper look at the data shows the news isn’t as bad as it first appears.

First, on a regional basis, sales were mostly solid. Only the Northeast region posted a loss. The West even managed a gain.

• Northeast : -18.3 percent
• Midwest : 0.0 percent
• South : +0.5 percent
• West : +4.9 percent

Second, the supply of homes for sale dropped to 8.3 in May and, because home prices are based on supply and demand, this is a positive for pricing.

By comparison, in 2008, the average existing home inventory was 10.4 months.

Lastly, first-time home buyers represented 46 percent of all buyers in May. The number was likely buoyed by the tax credit program but that doesn’t damper the fact that first-time buyers provide a support floor for the housing market. 

First-time buyers in Crown Point Indiana enable “existing owners” to move-up to bigger homes, which in turn trickles up to the mid-size and jumbo markets.

Analysts expected more from May’s numbers and that may explain why the reaction to the data is generally negative.  However, in many cities, home resales did just fine.

Home Supplies Tick Higher, Good News For Home Buyers

Sales of existing homes rose in April, buoyed by an expiring home buyer tax credit and exceptionally low mortgage rates.

As compared to March, April’s Existing Home Sales rose by 410,000 units nationwide — the second straight month of large gains. An “existing home” is a home resold by a prior owner (i.e. not new construction).

It’s a solid report for housing overall, with rising sales suggesting that the real estate market’s recovery is ongoing. However, the data presented a mixed message.

According to the National Association of Realtors®, although the number of homes sold ticked higher in April, so did the supply of existing homes for sale, too.

Sellers are now listing homes faster than buyers can buy them.

After adding another 0.3 months of supply in April, resale home supply is nearly two full months larger than at November 2009′s low-point. This put downward pressure on home prices.

Furthermore, because 49% of April’s buyers were first-time buyers and the tax credit has since ended, we can expect that sellers will continue to outweigh buyers in the months ahead.

It presents an interesting opportunity for June’s home buyers. Mortgage rates are still at their lowest levels of the year — despite expert predictions to the contrary — and homes remain affordable. Plus, in a lot of markets, home values have started to creep higher.

There’s good values and good rates but neither should last long. For the next few weeks, real estate may be in its 2010 sweet spot. 

If you were thinking of moving in September of this year or later, consider moving up your timeframe.

Thanks to Tax Credit, Home Resales and Home Values Up

Existing Home Sales rose in March, as expected. U.S. home buyers closed on 7 percent more homes as compared to February.

Furthermore, versus March 2009 — a month many people equate to the low point of the U.S. economy — sales volume was up 16 percent.

“Existing home sale” is the technical term for a home resale; a home previously inhabited by a person.  It’s the opposite of a “new home sale” which is a sale of a newly-constructed home.

Existing Homes Data is tracked by the National Association of Realtors® and a closer look at the March data reveals some other interesting notes:

1. Year-over-year sales are higher for the 9th straight month
2. Real estate investors represented 19 percent of all homes purchased
3. First-time home buyers account for 44 percent of all buyers

Also worth noting is that the supply of available homes is down on a broader basis.  At the current rate of sales, the existing home inventory will be exhausted in 8 months.

Despite banks releasing foreclosures and REO into the Crown Point market, that’s still one half-month less from February.

When supplies drops, home prices tend to rise. It suggests an underlying strength in housing that should support home prices through the next few months — especially as the home buyer tax credit finishes working its way through the system.

That said, real estate markets are local. You shouldn’t assume that what’s happening on the national level is also happening here at home.  Be sure to check with your real estate agent about local market conditions before making a decision to buy or sell.

Contact James K Barath in Crown Point Indiana to Qualify for Your FREE FHA Home Loan Approval Today!

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