Jim's Blog on Real Estate and Other Issues in Muncie and Delaware Co. IN

What Effect Did The Stimulus Programs Have On Your Market?

Jim Kouns (Coldwell Banker Lunsford) — Thu, 02 Feb 2012 15:12:06 -0800

We're just into 2012 and already there's talk from Washington of a new program to "fix" the housing problem, with today's papers carrying a story about a modification of the Home Affordable Modification Act. While I've read conflicting reports its contents, it seems to focus on a refinancing plan to help people with good credit and current payments who are upside down on their current mortgages. Without getting into the specifics of the HAPA at this time, I couldn't help wondering how the previous plans had affected the housing market in Muncie and Delaware County, IN.

The previous federal stimulus programs were as follows.

2008-The Economic Stimulus Act of 2008- First-time homebuyers were offered a tax credit of up to $7500 as a no-interest loan to be repaid at $500/yr for 15 yrs.

2009-The American Recovery and Reinvestment Act of 2009 (ARRA)- First-time home buyers were offered a tax credit of up to $8,000 which did not have to be repaid. Non-first-time buyers were offered up to $6,500.

2010- ARRA was extended to buyers under contract by May 31 and closed by Aug. 31.

Looking at sales and prices from 2006 -2011, I saw no significant effect on our market. Here's the data.

Except for a property tax issue in Aug. of 2007, the sales and price increses reflect the normal seasonal cycle of our business. I'd be interested in hearing what effect the stimulus programs had on your markets. Maybe the 2012 plan will have positive results, but I doubt it. The only good thing is that given the current political climate, there's little chance anything will be passed.

Jim

2011 Market Report for Muncie and Delaware Co, IN

Jim Kouns (Coldwell Banker Lunsford) — Fri, 27 Jan 2012 14:25:43 -0800

2011was a challenge for the real estate market in Muncie and Delaware Co., IN. Terrible weather depressed business in the first quarter of the year. Second quarter results were also quite disappointing with nearly every measurement at or near all-time lows. However, there was a turn-around in the third quarter with overall sales better than the same period in the previous year for the first time in 12 months and we ended the year with 836 homes sold, down 6% from 2010.

Repos remained steady at about 29% of sales, averaging around $33,000 each. 80% of the repos were sold for cash indicating they are being bought by investors. Since most of these units are below $40,000 threshold being required by lenders, buyers are having difficulty obtaining financing unless they have large downpayments. This will further delay the absorbtion and depress the prices of this segment of the market. On the plus side, this will mean continued opportunites for investors with cash.

The overall inventory of homes for sale in Del. Co. remains low for this time of year and at 2011 sales levels there is just over 6 months supply at $75,000 and below ranging up to a 13.5 month supply of homes over $300,000. Altogether, we have just under an 8 month supply. More high-priced homes were sold in 2011 and overall sale prices moved up 1%, the first annual increase since 2008.

2012 looks to be a little brighter year. Interest rates remain at all-time lows and seem likely to continue at present levels at least throughout the first half. There is a continued lack of new construction so existing inventory should be absorbed at a greater rate and prices should hold. The property tax caps enacted by the legislature three years ago seem to be working and assessment values appear to be following sale prices as intended. We still have a "lack of confidence" mode and buyers will remain hesitant to commit until there is an increase in positive economic news, both locally and nationally. 2012 is a state and national election year with all the mixed messages that creates, so I doubt there will be any confidence-builders coming from the public sector. For 2012 in general, I expect unit sales here in our area to increase around 8% and for prices to gain modestly ending the year up 1%.

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Jim

Home Buyers Should Learn "Due Diligence" From Commercial Transactions.

Jim Kouns (Coldwell Banker Lunsford) — Mon, 23 Jan 2012 11:19:04 -0800

Muncie and Delaware Co, IN is a small market and I do both residential and commercial brokerage. On the commercial side we're usually dealing with business professionals and attorneys who have broad experience in these transactions. "Due Dilligance" is done prior to entering into the process of negotiating an offer and then there is an additional period after an offer is accepted. This gives the buyer time to investigate details such as environmental issues, inspections, zoning, governmental approvals, permits and the like.

In residential transactions the buyers look at a number of properties and make an offer on the one they like best. Their "Due Diligence" usually involves personal viewing, investigation of schools, and a CMA prior to making an offer and then finalizing financing and inspections after the offer is accepted. Since most buyers are not seasoned professionals, they can overlook some details that can have a big effect on their quality of life in the new home.

Residential buyers rely on their agents, Sellers' Disclosures and their home inspector for discovering problems, but agents must be careful about making neighborhood statements because of Fair Housing and possible lack of first-hand knowledge. Disclosures can be misleading, even if unintentional, and inspections have a host of disclaimers covering areas that are impossible to check. There are legal remedies but these can be costly and lengthy. What about intangibles? You can go on line and check for sex offenders, but those searches may not be current and may have unacceptable provisions like a 200 ft. tether when the next house is only 100 ft away. Even in upscale subdivisions, what's the neighborhood like at different times of the day and night? Does a nearby neighbor have an annoying hobby or barking dogs?

I could list many more possibilities, but the point is to have home buyers learn from commercial transactions and go further with their "Due Diligence." Visit the prospective neighborhood at various times of the day. Park along the street for 20-30 minutes each time and see what goes on. Knock on the doors of nearby neighbors and talk with them about the neighborhood. What do they like? What don't they like? Most will be open and honest and you may start a valuable new friendship. Real estate is not liquid and when buyers become sellers it's a whole different ball game so a little more "Due Dilligence" can help insure a happy outcome in the purchase of a new home.

Jim

2012 Predictions for Real Estate in Muncie and Delaware Co, IN

Jim Kouns (Coldwell Banker Lunsford) — Fri, 30 Dec 2011 11:48:39 -0800

As we come to the end of 2011 I want to look forward to 2012 and make some predictions about the real estate market in Muncie and Delaware Co, IN. 2011 was a very difficult year and when the final tallies are in, we're probably going to see unit sales down about 10% from 2010 and average sale prices about equal to 2010.The good news is that most of the problems were in the first half of the year and that 5 of the last six months have been better than their 2010 counterparts.

Looking ahead, I think 2012 will remain relatively flat with some improvements in the second half. There are more optomistic predictions beginning to appear in the media, but many of those predictions are based on improvements from very dismal prior years. If you look at the formerly "hotmarkets" like CA, NV and FL, many areas lost 50% or more of their previous values so it's not to hard to show improvements. In Muncie and Del. Co. our average sale price only dropped about 10% from 2006 levels and has been increasing over the past 6 months.

Market conditions are excellent, with low interest rates and attractive prices favoring buyers and low inventories favoring sellers. Our biggest problem remains the lack of confidence generated by all the negative financial news and especially by the lack of policy direction from Washington. Added to that is the uncertainty resulting from an presidential election year. Locally, we have a new and untried city administration and a governor election coming up. When faced with uncertainty people put off major financial decisions like home purchases.

On balance, I think our unit sales will rise in 2012 to somewhere in the 900 range, up from just over 800 this year.

Interest rates will rise slightly as the national economy improves, but will still remain below 5%.

Average sale prices will rise 8-10% as a result of low inventory and increased buyer activity.

New construction will remain slow but should improve from the very low levels of the past few years.

Best wishes to everone for a prosperous 2012.

Jim

Muncie-Delaware Co, IN Market and a Predicted Recovery

Jim Kouns (Coldwell Banker Lunsford) — Thu, 15 Dec 2011 14:45:41 -0800

The following article was posted by CNBC on Yahoo Finance last Fri. Those of you who read me regularly know that I usually ignore national market information because all real estate is local. This time, however, our Muncie-Delaware Co. market data seems to be reflecting many of the characteristics of the predicted recovery. Our unit sales have exceeded those for the same period in 2010 for the past 5 months. Average sale prices are also up.

Here's the article. "After half a decade of withering sales and slumping prices, there are strong and diverse signs that the single-family housing market is poised for a rebound.In some metropolitan areas, the market has bottomed, with both sales and prices on the rise and foreclosures on the decline. This contrarian - and largely overlooked - thesis flies in the face of the persistent gloom that has nagged the industry since 2007, when the subprime crisis flared.

Industry analysts and players cite a number of reasons - some traditional (employment), others unique to the post-credit bubble era (foreclosures) Â - for the long-awaited sea change. An analysis of industry and government data also support the forecast. "It has become increasingly apparent to us that the pieces for a housing rebound next year are beginning to fall into place," declared Barclays Capital analyst Stephen Kim in a recent note to investors.

Proponents admit that the nascent rebound could easily be derailed, but stress that after years of government efforts to support sales and prices as well as the volatile impact of foreclosures, the market has regained a measure of normalcy. "With the exception of really hard-hit markets, the vast majority is ready to turn around," adds Jerry Howard, president and CEO of the National Association of Home Builders, NAHB. "The Washington, D.C., area is not only ripe for recovery, they need to start building units."

The iShares Dow Jones US Home Construction Index Fund (NYSE Arca: itb), for example, is up some 38 percent, while the S&P 500 is up about 21 percent.

Nevertheless, skeptics overwhelmingly outnumber the optimists, given the false-starts of previous years, the economy's sub-par performance, a new wave of distressed properties and the capacity for the European debt crisis to spook business, consumers and investors. "I think it's premature," says Richard Smith, CEO of Realogy, the nation's largest real estate company, whose brands include Century 21, Coldwell Banker and Sotheby's International. "We see little indications here and there. Transaction volume is improving. Prices are still under pressure. This isn't going to be one of those spiked robust recoveries." Smith is echoing the conventional industry calculus: that price increases follow sales growth amid consistently strengthening demand.

There's been little conventional, however, about this housing slump, which is one reason it's had so many false bottoms. Among its many firsts - housing starts fell through 1 million annual units, foreclosures topped 2 million in three consecutive years, and home prices declined on a national basis.

The catalysts to recovery are mostly the same: for potential buyers, residential rents have now risen enough to consider buying; existing-home inventory is the lowest in five years, while that of new homes is at a 40-year low; affordability is at a record high; delinquencies have peaked; consumer confidence is on the rise ; and job growth is accelerating.

For investors, with a continuation of the gold rally in question, real estate is beginning to look like a viable inflation hedge alternative, while rising rents mean greater profits.

That thinking may help explain why the iShares Dow Jones US Home Construction Index Fund (NYSE Arca: itb), a broad barometer for the housing market, is up some 38 percent from the stock market's October bottom, while the S&P 500 is up about 21 percent.

Finally, there's the intangible fatigue with bad news, and a desire to end the negative feedback loop. "We believe there is sizable housing demand that could be released into the market," says Lawrence Yun, chief economist of the National Association of Realtors, NAR. The NAR is forecasting existing home sales will rise 5 percent in both 2012 and 2013; prices will edge up 2 percent in each of those two years, then 4 percent in 2014. The NAHB is forecasting a 5.1-percent increase in new home sales and a 10-percent increase for new home starts in 2012. "

Jim

Why Do Our Associations Publish Misleading Data?

Jim Kouns (Coldwell Banker Lunsford) — Wed, 30 Nov 2011 11:57:38 -0800

One of the negative characteristics attributed to Confederate Cavalry General J.E.B. Stuart was that he liked to read about his daring exploits in the newspapers. Many believe that attribute led to his "joy-ride" and absence from Lee's army just prior to and during the first 2 days of the Battle of Gettysburg. Lack of valid information about the battlefield and the disposition of Union troops played a large part in Lees' defeat.

I can't help wonder if our state and national associations suffer from the same malady as J.E.B. Stuart. Do they continue to publish mis-leading data on the state of non-existant state and national housing markets because they love the media attention that follows? Maybe my perception is incorrect, but I can't think of any other reason. We all know that real estate is local, right down to the neighborhood or even block level in some cases.

This week, our IN Association published data for Oct. which was picked up and reported by the local newspaper. They are kind enough to break it down by county, and they draw raw data from local boards. However, in IN they use additional filters to arrive at their published numbers and often vary widely from the real numbers. The IAR reported Delaware Co. median sale price as down 4.6% when it was actually down nearly 20%. While our unit sales were up slightly, the IAR reported a 16.2% increase in sales for the state as a whole.

Now, in representing clients I have to overcome the false perception that our local market is stronger (16+% increase with only a slight dip in sale price). This perception is harder to overcome because of the authoritative appearance of our state and national associations. Next month the association's reports may create an entirely different perception but the one constant is that whatever data they report, it will have little resemblance to what's actually happening in most local markets.

Jim

Failure of the "Super Committee" and Possible Effects on the Real Estate Market

Jim Kouns (Coldwell Banker Lunsford) — Wed, 23 Nov 2011 12:05:59 -0800

The failure of the congressional "Super Committee" to reach a compromise on reducing the national deficit came as no surprise to many. The committee of distinguished, experienced congressional people divided along party lines, failed to compromise and therefore, set the stage for mandated, steep cuts in many programs and the elimination of tax reductions when they expire at the end of the year.

The failure to compromise was really no surprise because the committee members are representative of the Congress as a whole and merely reflect the gridlock that has kept them from completing any meaningful task for some time. They seem to be so afraid of offending their power bases that they would rather do nothing than place their re-election chances in jeopardy. No wonder congressional approval ratings have reached single digits.

What are the potential effects of this lack of action on real estate markets? While Congress has the ability to override the mandated cuts and tax increases, there is no gruarantee they will do so and therein lies the biggest effect, uncertainty. Financial markets, business managers and consumers looking at big ticket items like homes, cars and the like, all hate uncertainty. Faced with a lack of clear direction, lenders tighten requirements, business managers put off hiring and expansion and consumers embrace the status quo.

Therefore, regardless of what Congress does or doesn't do, I think we're looking at at least another year of high unemployment, slow growth, tight lending and a sluggish housing market, especially in new construction. Yes, 2012 is an election year, but I think there will be more rhetoric than action in Washington. The President has proposed a jobs program that has gone nowhere, so I think he's going to be limited to what he can accomplish by executive order and that will have little effect on the economy.

I hope I'm wrong, and I realize that real estate markets are local (don't foget to tell NAR). There are a number of localites that have been and are continuing to be significantly better than the national economy. Those don't exist in Muncie and east central IN, however, and it looks like we're in for another year of hard times.

Jim

Using Numbers in Our Business

Jim Kouns (Coldwell Banker Lunsford) — Wed, 16 Nov 2011 16:06:19 -0800

I read a recent post decrying the over-reliance on numbers in our real estate businesses. The post was well written and received a number of agreeable comments. While I know you can take anything too far, I think it's very necessary to use numbers in our business. Here's why.

First and foremost, we all realize that real estate markets are local. Therefore, we need accurate local data to respond to the misleading numbers published by the NAR and our state associations. The statistics put out, especially by the NAR are picked up by national media and create false impressions that probably don't apply anywhere. It's really hard to counteract those false impressions, but it's absolutely impossible without accurate local data. I publish a quarterly report of our market activity and use any speaking opportunity to spread the message of our local conditions.

Besides counteracting false impressions, I have to know what's going on for my own benefit and that of my customers and clients. I need to know current selling prices, inventory levels, absorbtion rates and days on market for various price ranges and I can't imagine doing a listing presentation or counseling a buyer without that knowledge.

As I said earlier, there can be too much of anything, and I see lots of successful agents that have no clue as to the specifics of the market. I think these folks can be divided into two categories. One is the experienced agents who have been productive for many years and have developed an instinctive feel for the market. They do enough business that they recognize what's happening and adapt accordingly. The second category includes those who also have no clue but base their actions on impressions and emotions. These folks are "law suits in waiting" because it's just a matter of time until they give the wrong person the wrong advice.

The down side of relying on numbers, especially in a challenging business climate is that you can easily become depressed, negative and lose your enthusiasm for the business. Sometimes, a little ignorance is bliss indeed. In the long run however, I try to follow one of my old statistics instructor's advice. "You have to separate what you know from what you think you know" and data is the surest way to do that.

Jim

"But Our Cause Is Just."

Jim Kouns (Coldwell Banker Lunsford) — Tue, 08 Nov 2011 15:40:56 -0800

It's been interesting to read the back and forth discussion about the NAR's $40 dues increase to support "critically needed lobbying for the housing industry." After watching the Jack Abramoff interview on 60 Minutes this past Sun, I was appalled at the extent of his corruption of Congress and sick to think that I am going to be supporting a similar effort. But, the NAR says, "But our cause is just." "We need to fight the attacks on our industry." "Everyone else is doing it."

Kind of sounds like the arms race during the cold war, but instead of pouring money into military items, we're going to pour it into the bottomless pockets of the members of Congress who indicate they are willing to be influenced. So I wonder how long it will be before the $40 is not enough and they'll be back for more. In spite of the approval of our directors, I think we need to ask ourselves if we really want to wade further into this "quicksand."

One of the recent comments from a NAR supporter showed outrage that the lobbying effort was still being questioned after the directors voted to implement it. Regardless of the vote, the discussion needs to continue. When I search the Active Rain community for blogs on the subject, it's obvious that we were overwhelmingly against it and we should refuse to be silenced. Directors can be replaced and decisions can be reversed.

Speaking of which, I think it's also time to examine what NAR is doing for us. They give out meaningless and often harmful statistics on the status of the "housing market" when we know that all real estate markets are local. In the most recent REALTOR Magazine they are bemoaning FHA's decision to drop loan limit caps from 125% to 115% of median area prices. Wasn't overly generous loans one of the housing crisis causes? In the same article they claim that home equity drops are restricting business growth because business owners can't tap into it for expansion. Once again, wasn't the use of home equity as an ATM one of the problems? Seems like NAR is on a never ending quest for more transactions, more practitioners and therefore more dues. They have watered-down the requirements for our most prestigious certifications to get more members and more dues. Never mind that the certifications are now virtually meaningless.

They seem especially alarmed by the questioning of the mortgagee interest deduction. In my 23 years as a licensed real estate professional, I have never had a client buy because of the mortgage interest deduction. Sure, they took the perk at tax time, but that's not why they bought a house and they won't refuse to buy if the deduction goes away. We might be better foregoing the interest deduction to reduce the debt we're running up for our children.

Home ownership is not for everyone and it requires personal responsibility. A stable market with properly qualified buyers may not be spectacular but it's to the best interest of everyone involved.

Jim

The Auto Industry Is Back! What It Means To Muncie, IN Real Estate

Jim Kouns (Coldwell Banker Lunsford) — Fri, 04 Nov 2011 15:33:29 -0700

“A country that doesn’t build things is in trouble.” – David Cole, chairman, Center for Automotive Research.

The Auto Industry Is Back!

For the past few years, the automotive belt states of Michigan, Ohio and Indiana have struggled through the industry’s woes, with closed plants, bankrupt companies and hundreds of thousands of lost jobs. This region, which grew with cars, made its bed with cars.

The bed didn’t just get lumpy – it collapsed and was on fire. Reports estimated that more than 100,000 jobs in the auto industry were being lost each month in 2008, and without the bailout that followed, more than one million jobs were next as the companies hemorrhaged due to low consumer spending and a complete lack of financing.

Today, two years after the $80 billion bailout of the industry, the Big Three is doing better than ever. In the first quarter, the industry reached an important milestone when all three posted positive quarterly net profits – for the first time since 2004. GM’s first quarter profit was nearly triple its profit from the same quarter just a year prior; Ford’s first quarter 2011 net income marked its best first-quarter performance since 1998 and the company’s eighth straight quarterly profit. Chrysler realized its first quarter of positive net income since exiting bankruptcy.

Both GM and Chrysler have announced investments totaling more than $8 billion in their US facilities, including $1.1 billion at its Kokomo, IN transmission plant. GM said last week it will invest an additional $2 billion in US factories in eight states. Suppliers have also recovered. Bankruptcies dropped from 59 in 2009 to just a handful in 2010, according to a White House report released June 1. Companies that produce parts are again running overtime.

What It Means To Muncie, IN Real Estate

As automotive and automotive parts jobs return consumer spending, housing price improvement and even commercial real estate deals should follow – a recovery that most in the Midwest believe was worth every penny of the bailout cost.

Jim

Critical Election For Muncie IN Residents

Jim Kouns (Coldwell Banker Lunsford) — Fri, 28 Oct 2011 14:05:20 -0700

The election is now only 10 days away and it will be a critical election for Muncie, IN residents. Running for re-election is an experienced mayor with a strong track record of accomplishment. She has not only operated within a very challenging budget but will finish her term with reserve funds for next year. She has saved taxpayers $500,000 by not having to borrow money to cover operating expenses while awaiting property tax distributions.

She has also been effective in building international relationships and working with economic development people at all levels to bring new jobs to Muncie. Our parks have received long-delayed attention and have added greatly to our quality of life. Prairie Creek Park has become an income producer for the first time in history and will return a $90,000 surplus this year.

Contrast this with her opponent who has no municipal government experience and whose only accomplishment as an appointed State Senator was to participate in the Democrat walk-out that paralyzed the IN legislature last spring. In addition, he has strong ties to local public emploiyee unions who will be negotiating new labor contracts next year.

The races for City Council, especially the "At Large" contests, are equally important. Here again, the Democrat candidates have strong ties to our public employee unions and one candidate is married to a firefighter. This same candidate pledged civility and cooperation in a recent debate even though she orchestrated and led a rowdy demonstartion, complete with news cameras at one of the Mayor's neighborhood commmunication meetings. The demonstration, by the way, was to call attention to the lay off of her firefighter husband according to contractual proceedures necessitated by reduced tax income. If elected, this person will be voting on the new contract with the firemen's union next year.

Though property taxes are capped, elected officials can still pass Local Option Income Taxes to generate additional revenue. If the candidates with strong ties to public service unions are elected, I can't help but wonder how long it will be before this tax is adopted in Muncie.

What has all this got to do with real estate? Quality of life and especially cost of living are two major considerations in peoples' decisions on where they choose to live. The more people who choose Muncie, IN the more opportunites are generated for everyone and the more people there are to share the cost of providing quality public services. Our mayor and her staff have proven that these are their prime objectives. The opposition seems much more concerned with preserving and enhancing the lives their friends, families and political allies at the expense of the rest of the community.

Jim

The Seven Deadly Sins of Homeowners

Jim Kouns (Coldwell Banker Lunsford) — Mon, 24 Oct 2011 14:45:09 -0700

The concept of seven deadly sins for people comes from the religious traditions of the Middle Ages and if commited will result in the detriment of the human soul. There are also seven deadly sins that homeowners commit that will result in the detriment of their property values.

#1. Thinking you're going to own the home forever. Someone once said "Life is what happens when things don't go as planned." Situations changes like death, health, maritial status, economic pressures, neighborhood make-up` and the like occur without notice and result in the unplanned sale of homes, either by the owner or heirs.

#2. Using your home equity as an ATM. This was partly the cause of the "housing crisis" and even today, there are still enticements to use home equity to finance activities from home repairs to improvements to vacations, boats, motorcycles and whatever else. Even reverse mortgages can be an issue if you don't properly guess your life expectancy. If you have to sell and the equity is gone you will have an upleasant surprise when you see your closing statement.

#3. Failure to maintain the property. Often little items like leaky faucets, widows that have lost their seal, peeling paint, or plugged gutters are considered annoyances and remediation is ignored. Unfortunately, ignored maintenance of small things often leads to costly major repairs later. A well-maintained home not only gives peace of mind to the owner but it also stands out from the competition in the event of a sale. (see #1)

#4. Failure to update periodically. I still see shag carpet, and colored bath fixtures from the 50's and 60's. There's no need to do a major overhaul of the whole house at one time, but periodic updates, of one or two rooms at a time are less expensive and less disruptive. Paint and floor coverings are the least expensive and have the greatest impact. Laminate countertops for kitchens and baths are far less expensive than imagined and even bath tubs can be upgraded easily with slip-over products.

#5. Over-improving for your neighborhood. Putting a $40,000 kitchen in a $100,000 house may stroke your ego but the house is still worth somewhere around $100,000. Most home improvements are really maintenance and add only a fraction of their cost to home value. Even additional space is counter-productive if the end result doesn't fit existing neighborhood profiles.

#6. Ignoring your landscaping. Could go under #3 or #4 above, but it's important enough to give it a separate category. Landscaping is the only home improvement that consistently returns more than 100% of its cost in home value. Shrubs and plants get overgrown and ragged with time and the only cure is to remove them and plant new. Again, if done a little at a time, the expense and effort is minimized.

#7 Too much "stuff." When my kids were young they started a beer can collection and soon we had shelves full along the walls of their rooms. When they outgrew the fad, they decided they'd cash in because all the publications told them the cans were valuable. Well the only buyer was our local recycler and then only if they were delivered. Every week, I see auction bills where someone's prized possessions are being dispersed, often for very little. Save your heirs the trouble and give away or otherwise get rid rid of your "stuff."

Jim

Do It Yourself Energy Audit

Jim Kouns (Coldwell Banker Lunsford) — Thu, 20 Oct 2011 15:17:44 -0700

Conduct Your Own Energy Audit

A do-it-yourself energy audit can teach you how to be more energy efficient and make you a more-educated consumer should you decide to hire an expert. Read

Visit houselogic.com for more articles like this.

Jim

Is it Better to Rent or Buy in Today's Real Estate Market in Muncie, IN?

Jim Kouns (Coldwell Banker Lunsford) — Tue, 18 Oct 2011 09:52:09 -0700

Being in real estate I hear Realtors saying all the time that it's better to own than to rent. I know that the general population thinks we say that just because we want to sell more houses. So let's take a REAL LOOK at why it is better to own than rent.

Set the stage: The average price (mean) of a home in Muncie - Delaware County, Indiana is $93,000. Given 30 years at 12 monthly payments on an FHA loan at 3.85% (today's market rate for outstanding credit score) compared to a rental payment of $850 (including rental insurance).

Using my rent v. buy calculator I get the following results in a full comparison:

Estimated Savings with Ownership vs. Renting

Number Of Years To Compare:	10

Concerning Rent: (Scenario One)
Rent Amount Per Month:	$800.00
Monthly Renter's Insurance:	$50.00

Concerning Home Ownership:
Purchase Price:	$93,000
House's Appreciation Rate:	1% (very conservative rate)
State & Federal Tax Rate:	18% (federal income tax rate varies)
Loan Amount:	$83,700
Interest Rate:	3.85% (today's rates for prime credit scores)
Number Of Years:	30
Discount Points:	0%
Origination Fee:	1%
Other Loan Costs:	$2,309.00
Annual Property Taxes:	$1,050.00
Annual Maintenance Costs:	$1,000.00 (varies by owner)
Annual Homeowners Insurance:	$600.00
Selling Costs:	7% (varies by Realtor)

RESULTS
Total Rent Per Month:	$850.00
Total Rent:	$102,000.00

Monthly Principal & Interest (PI):	$392.39
House Total:	$91,738.00

Selling Price:	$102,729.00
Own vs Rent	$10,262.00
Total Tax Savings:	$5,255.00
Equity At Time Of Sale:	$28,942.00
Money Saved Through Home Ownership:	$44,459.00

Owning a home would cost $44,459.00 less than renting.


Notes:	This data is for informational purposes only and accuracy of the figures hereinafter set forth is not guaranteed. The actual costs with respect to each transaction will vary depending upon the circumstances.

A you can plainly see, that owning a home is a more financially savvy way to manage your money. It gets even better over time - say 30 years.

THERE ARE OTHER (NON FINANCIAL) BENEFITS TOO!

You get to decorate however you want!
You get to own whatever pets that you want!
You get a pride of ownership & accomplishment!
You get a more stable life!
You save money not moving every 12 months by not moving, again!
You get a sense of community!

So what's stopping you from calling me today?

Adapted to Muncie, IN market values, by permission, from a Blog post by Cathy Bureau, San Antonio, TX?

Rent Versus Buy - The Real Cost of Renting!

By Cathy Bureau, Broker-Owner, San Antonio, Texas

Jim

Third Quarter 2011 Residential Real Estate Results for Muncie & Delaware Co. IN

Jim Kouns (Coldwell Banker Lunsford) — Mon, 10 Oct 2011 15:28:17 -0700

It's probably too early to get excited, but the third quarter 2011 residential real estate results for Delaware Co. In are in and we may have turned the corner. Third quarter unit sales were up nearly 3% over the same quarter in 2010 and it was the first time in the past 4 quarters that units sold had exceeded the same period in the previous year.

Year to date is still behind due to very low activity in the first 2 quarters of this year. It does look like the rest of 2011 has a good chance to exceed the fourth quarter of 2010 and the improvement should carry on into 2012.

The number of reposessions has leveled off at around 25% of sales, down from over 33% at its highest level. Short Sales remain a non-factor, accounting for less than 3% of units sold.

Even better news is that average sale prices have improved by over 9% from the 3rd qtr. 2010 and over 2% year to date. Again, the YTD is not too exciting, but it's the first time a 3rd. qtr YTD price average has exceeded the previous year since 2005. In addition to increased sales of higher priced properties, our repos have been predonminately at the low end, so as the total number of those units has decreased, we have seen an increase in average sale prices. The list price to sale price ratio has improved slightly to just under 94%, very near our historical average.

Inventories of homes for sale decreased by over 2.6% in the 3rd qtr and that has carried through into the 4th qtr. The lower inventories come at a time of normally lower activity and so there should be less downward pressure on selling prices for the rest of the year.

Pending sales, a gage of future activity, were up slightly at the end of quarter. Average days on the market, the time from list to close, increased from 2010 but improved from the 2nd qtr. of 2011. It currently takes about 146 days to sell an average priced property.

Jim

Why Some Homes Sell More Quickly

Jim Kouns (Coldwell Banker Lunsford) — Thu, 06 Oct 2011 14:43:18 -0700

Why do some houses sell more quickly? People often ask me that and here's a tale of two homes, across the street from each other in Muncie, IN. that I think shows two of the reasons. Both houses are well kept and updated, yet one sold for full list price in 35 days and the other, while it's now "pending" has been on the market 256 days.

This is the house that sold for full list. Its general appearance and especially the landscaping produces a terrific "curb appeal." Anyone looking at photos on-line or driving by the property can't help but be attracted. The flowers are abundant with tastefully matched colors. The window box of white Impatiens is eye-catching and the picket fence along the front walk gives a nice accent to the planting bed.

House #2 across the street is larger and has a 2 car garage. It has been completely updated inside and is in very good condition outside. So why has it taken so long to sell?

First, it was originally priced $30,000 higher than it was when it went "pending." After several reductions, it finally got down to where it should have been in the first place. Second, it has poor curb appeal. There are no flowers and nothing to add color or to draw a buyer's interest. I think it's likely that even if priced properly at the start, the lack of landscaping would still have made a big difference.

The National Assoc. of REALTORS and other groups do yearly studies on the return value of various home improvements. In nearly every survey, landscaping returns a higher percentage on investment than any other improvement project. Further, it's usually the least expensive. A few hundred dollars in flowers and shrubs would make all the difference for this property and it will be interesting to see the actual selling price once it's closed.

I think someone did a seminar on today's market titled "It's a price war and a beauty contest." I'd say Amen to that.

Jim

Let's Expand the RR Quiet Zone

Jim Kouns (Coldwell Banker Lunsford) — Tue, 27 Sep 2011 11:56:26 -0700

Let's expand the RR quiet zone. There's a lot of controversy in the City Council about the proposal for creating a downtown "quiet zone" where passing trains would be prohibited from sounding their horns at crossings. Currently they must do so by federal law unless that is over ridden by local statutes.

I live in Riverbend Commons near the intersection of Morrison Rd. and River Rd. Approx 1 mi. south of us are the CSX tracks and less than a mile north of us are the Norfolk-Western Tracks. Depending on the atmospheric conditions and the engineer at the time it almost feels like I could reach out and touch trains on either of those tracks. They are blowing non-stop and when there are trains on both tracks at the same time, it sounds like diesel horns in stereo.

There are few ungarded crossings west to east from CR 500W all the way to Selma. There are a few more on the north south lines, but not that many from Royerton Rd. to 67 south on the bypass. If we're going to tackle the noise issue, let's expand the focus and bring some peace and quiet to the entire area.

Jim

Good News, Bad News, Good News for the Muncie, IN Real Estate Market

Jim Kouns (Coldwell Banker Lunsford) — Mon, 26 Sep 2011 11:35:10 -0700

Good News: Our local Star-Press business columnist wrote a nice article for yesterday's paper quoting sales statistics from the IN Assoc. of REALTORS, stating that the housing market in Delaware Co. is improving. We don't often get postive headlines and articles in the press, so it was great to see both a positive headline and article.

Bad News: The statistics quoted in the article were incorrect. I'm sorry to say that our market is not getting better. The Star-Press article claimed a 5.2% increase in sales, with 263 units closed June through August in 2011 vs 250 closed sales for the same period in 2010. In reality, we had 267 sales in 2011 vs 268 during the same period in 2010. The column also stated that median sale price had declined $84,750 in 2010 to $78,900 in 2011, whereas the actual median sale price was nearly identical to last year, $78,200 VS $77,900.

The difference in the IAR numbers I think, is because they consider some sales where the sale price is far below list, to be “outliers” and don’t include them in their results. Most of those are low end repos, but I believe any closed sale is a valid data point and an accurate reflection of the market.

Good News: We may not be getting better, but it appears we may have stopped getting worse. I'll have a clearer look in a couple of weeks when Sept. results are in, but currently we're running about the same in Sept. as we did in 2010.

Jim

How Can They Be Objective?

Jim Kouns (Coldwell Banker Lunsford) — Thu, 22 Sep 2011 14:50:08 -0700

Next year, the city of Muncie will be negotiating labor contracts with both the police and fire unions. In addition, the federal grant that paid to bring back 25 laid off firefighters will expire. In light of the federal government's budget reduction programs it seems unlikely to be renewed.

Over 80% of the city's budget is spent on public safety, mostly wages and benefits for the police and fire departments. Property tax caps and declining property values have limited the total amout of revenue that can be obtained from property taxes.

Two candidates for the upcoming city election are directly tied to the fire department. The Democrat candidate for mayor is a retired fireman who retains strong ties to the fire union and one of the Democrat candidates for City Council at Large is the wife of a current fireman.

I can't help but wonder how these people will represent the city as a whole if they are elected. They will be active participants in contract approvals that benefit themselves and their close friends and political allies. With a limited budget and no ability to raise property taxes, if public safety spending is increased, other areas like parks, or maintenance must be reduced. Either that or other taxes like Local Option Taxes might be enacted. I wonder how they can be objective?

Jim

Imagine the Possibilities

Jim Kouns (Coldwell Banker Lunsford) — Tue, 20 Sep 2011 14:01:03 -0700

Here's a nice home, modestly priced, in a good location so what more could you ask? How about a second, 2 car garage, insulated and wired for just about any kind of workshop or hobby. Restore and keep a collector car. Store your boat or RV, the possibilites are many.

Call me today and let me show you this nice home.

Jim

Latest Storer Neighborhood Activity

Jim Kouns (Coldwell Banker Lunsford) — Mon, 19 Sep 2011 15:05:17 -0700

Three new listings of homes for sale in the Storer neighborhood appeared in the past week and two previously pending homes sold and closed. The inventory of active lisitngs remains about where it was.

Looks like Constitution Day at Storer was a success and there was a nice article with picture in the Star-Press. Here's a link to Storer's web site for upcoming activities in Sept. http://www.muncie.k12.in.us/storerweb/aboutus/eventscalendar

Bev & I enjoyed the Ball Sate game on Sat. and it was great to see the Cards come back and win. Maybe they should give the Colts a few tips. Sun. we went to the Johnny Appleseed Festival in Ft. Wayne. Great food, lots of stuff to buy, interesting re-enactors and an all around good time.

Jim

Fall Is My Favorite Time of Year

Jim Kouns (Coldwell Banker Lunsford) — Fri, 16 Sep 2011 14:32:45 -0700

Even though it's still summer for 5 more days, fall is in the air and it's my favorite time of year. Last weekend, Bev and I went to the Covered Bridge Festival in Matthews and this weekend we're going to hit both the Old Washington St. Festival in Muncie and the Johnny Appleseed in Ft. Wayne. I'm giving up trying to loose weight until the last elephant ear is gone.

Ball State opens it's home season tomorrow night and we're going to that as well. I've been very impressed by the new attitude in the BSU football program and I'm looking forward to cheering their success.

Basketball season isn't far off either and it will be a pleasure watching Nick Osborne (neighbor's son) complete a terrific high school career at Central.

All this and I haven't even mentioned the fall foliage.

What a great time of year!

Jim

Storer Neighborhood Home Sales Better Than Co. as a Whole

Jim Kouns (Coldwell Banker Lunsford) — Wed, 14 Sep 2011 10:56:19 -0700

Real estate activity in the Storer School Distric pretty well reflects the overall Muncie-Delaware County market. Through the first 8 1/2 months of 2011 there have been 80 homes sold averaging just over $90,000. Original asking price average for these homes was $99,530 and it's taking just about 126 days from list to close. There are currently 75 for sale withg an average asking price of $106,430. Real estate is very, very localized however so if you want specifics for your home, please contact me.

Looking at Del. Co. as a whole, the average selling price has been under $90,000 and the average list to close time is around 140 days. I'll have more specific information to report in about a month when the third quarter data is available.

If anyone has any neighborhood news or events they'd like me to publicize, please email them to me at jkrealtor@jekouns.com. Meanwhile, here's the link to the Storer school web site. http://www.muncie.k12.in.us/storerweb Tomorrow is Grandparents' Day.

Jim

Grandparents Day at Storer Elementary

Jim Kouns (Coldwell Banker Lunsford) — Tue, 13 Sep 2011 14:58:10 -0700

Grandparents Day is this Thurs.9/15 at Storer Elementary. Here's a link to the Storer web site for complete details. http://www.muncie.k12.in.us/storerweb

It's great to visit and to support both the children and the educators.

Jim

Country Contemporary Home

Jim Kouns (Coldwell Banker Lunsford) — Mon, 12 Sep 2011 15:51:22 -0700

Outdoor Paradise

Overview
Maps
Photos
Features
Video
Neighborhood

$219,900

Single Family Home

Main Features

3 Bedrooms
2 Bathrooms
1 Partial Bathroom
1 Unit
Interior: 2834 sqft
Lot: 5.00 acre(s)

Location

4101 S. Whitney Rd.
Selma, IN 47383
USA

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Jim Kouns

Coldwell Banker Lunsford
(765) 289-2228 x 116
jkrealtor@jekouns.com
http://www.jekouns.com

Listed by: Coldwell Banker Lunsford

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