How's The Indianapolis Real Estate Market?
That's probably the most-often-asked questions posed to practitioners
in the Real Estate industry.
And a question that - simply put - doesn't have an answer.
Perhaps it'd be more accurate to suggest that the only true answer would have to be, "It depends."
Pended sales are down. Listings are up. Prices are dropping. Builders are going under on a weekly basis.
Sounds gloomy. Or maybe not.
I believe this: these are all signs of a market that is in the midst of a long, painful correction. I can't speak about Florida or California or Tucson, but I can speak with some authority about Indianapolis. Our market has been overheated for at least the last 8 years. More new homes being built than the market could absorb. Cheap credit meaning that builders and developers could grab land and throw houses up faster than they could give the subdivision a catchy name like "Whispering Tree Overlook" or "Deer Chase Run Hills." And a mortgage lending market that meant anyone with a heartbeat could get a loan.
My how a financial meltdown can foment change.
But even in "bad" markets, opportunities create themselves. Here's a specific example:
Client A has a home valued at about $150,000. He paid $155,000 3 years ago, so it seems pretty icky to have "lost" $5,000. But he also happens to have about $20,000 in equity even after a $150,000 sale. He also has great credit and will qualify to purchase a home up to $350,000.
The really good news is that some houses currently selling for $350,000 were selling for $400,000 two years ago and will - in my estimation - be some of the first to see an uptick as the economy begins to recover: quality homes in popular neighborhoods in top school systems.
Combine that with the fact that interest rates continue to stay super-low, his new loan will have a lower rate than his current loan.
So by choosing to take a $5,000 "loss" now in order to finance a move upwards with a loan at a lower rate, this client can get into a home that was out of his reach previously in terms of location, amenities, etc.
So how's the market?
Terrific!
And a question that - simply put - doesn't have an answer.
Perhaps it'd be more accurate to suggest that the only true answer would have to be, "It depends."
Pended sales are down. Listings are up. Prices are dropping. Builders are going under on a weekly basis.
Sounds gloomy. Or maybe not.
I believe this: these are all signs of a market that is in the midst of a long, painful correction. I can't speak about Florida or California or Tucson, but I can speak with some authority about Indianapolis. Our market has been overheated for at least the last 8 years. More new homes being built than the market could absorb. Cheap credit meaning that builders and developers could grab land and throw houses up faster than they could give the subdivision a catchy name like "Whispering Tree Overlook" or "Deer Chase Run Hills." And a mortgage lending market that meant anyone with a heartbeat could get a loan.
My how a financial meltdown can foment change.
But even in "bad" markets, opportunities create themselves. Here's a specific example:
Client A has a home valued at about $150,000. He paid $155,000 3 years ago, so it seems pretty icky to have "lost" $5,000. But he also happens to have about $20,000 in equity even after a $150,000 sale. He also has great credit and will qualify to purchase a home up to $350,000.
The really good news is that some houses currently selling for $350,000 were selling for $400,000 two years ago and will - in my estimation - be some of the first to see an uptick as the economy begins to recover: quality homes in popular neighborhoods in top school systems.
Combine that with the fact that interest rates continue to stay super-low, his new loan will have a lower rate than his current loan.
So by choosing to take a $5,000 "loss" now in order to finance a move upwards with a loan at a lower rate, this client can get into a home that was out of his reach previously in terms of location, amenities, etc.
So how's the market?
Terrific!
