‘Prices Are Starting To Come Down’ In Indiana
The Journal & Courier reports from Indiana. “When Ron Aldridge and his wife, Alice, bought a new condominium on Lafayette’s south side in 2001, they were glad to be rid of yard work once and for all. The retired steelworker, however, soon found that just climbing the stairs in their two-story, three-bedroom condo was laborious. So they put it up for sale two years ago.”
“Now, after reducing the price a second time and showing their home to fewer than 12 people in the past year, they’re looking at a potential loss. ‘We’re not having any luck selling ours,’ he said. ‘The housing market is just saturated right now.’”
“Len Wilson, broker in Lafayette, said after a fairly busy first quarter, the spring and summer months have settled into a classic ‘buyer’s market.’ ‘Business has been going down steadily, even from the standpoint of new construction. I don’t understand why,’ Wilson said. ‘Starting prices on homes are starting to come down.’”
“‘Upper end houses are (selling) very slow. Those in the $275,000 to $400,000 range are very slow right now. I’m not seeing a lot of turnover in existing homes in that range,’ he said.”
“Aldridge, for one, points to rapid new development of residential subdivisions on the outskirts of Lafayette. ‘I think the county people have let the housing market run away from them,’ he said.”
“In the past 10 years, the number of new single-family homes built in Tippecanoe County has outpaced the estimated number of new households. According to census records, Tippecanoe County added approximately 5,900 new households from 1995 through 2005. The total of all new residential units built surpassed 16,000, or well more than the total population growth.”
“(Builder) Bruce Gunstra, offered this assessment: ‘I would be hesitant to say if that is universal or something we created on our part. What seems to me to be the case is, in certain price points in housing this market has been overbuilt, and there are a lot more (houses) for sale than the market can (absorb).’”
“Wilson, a Realtor since 1989, anticipates some of the next round of home buyers in Greater Lafayette will be coming from areas outside the Midwest. ‘We’re getting a lot of inquiries coming from out of town. A lot of people are coming from the West Coast and East Coast, even from Florida,’ he said.”
“The Aldridges hope that’s the case. Visible from their driveway are two other condos for sale in their same complex. The price they are currently asking for their property is $110,900, which is reduced from $115,900 they asked originally when they listed it for sale themselves.”
A reader posted this link:
‘Lake County residents are walking away from their homes in what may be record numbers. County officials insist neither they nor high taxes are at fault here. The Lake County Sheriff’s Department has listed 1,666 mortgage foreclosures in only the first six months of this year. That is already more than all of 2005. If that trend continues, it will be the largest number of foreclosures in 11 years of record keeping.’
‘County officials are preparing what may be the largest tax delinquency sale in the state, potentially dispossessing owners of 22,000 county properties. The sheriff said many people bought homes with adjustable rate mortgages when rates were low. ‘Interest rates have climbed up and put them over the edge,’ he said.’
Yeah but the quadrupling of taxes, decaying infrastructure, wasteful county spending, declining scholls had nothing to do with it.
“declining scholls”
that’s it. the last straw. when the scholls start declining it’s time to clear out
I thought skools was too obvious.
What kind of wasteful county spending? Just curious.
The undersherriff and budget director resigning last April wasn’t a clue?
kill a socialist= save your soul
We have rules and Democracy here. You have to get your way through petition or do without. Come up with a better plan and spin it well and it could go all the way.
“kill a socialist= save your soul”
Kill a republican=save the world.
Do that and the moderates will become the new republicans. That’s how we got to where 45 years later JFK would be considered far too right wing to garner even a Republican label.
I thought brainwashing went out in the 50’s…
I don’t understand why people giving up their mortgages would result in more tax sales. The lender would foreclose and take it back if it was leveraged 100% (depending upon how the loans were setup). Then, if the property was worth any substantial amount of money, they would pay the taxes themselves to avoid losing the property. As well, the tax sale process in most states is usually delayed by at least 1 year, and in some cases is as much as 3 years (or more). So if people were having tax problems right now (somehow due to the current RE market), it wouldn’t show up in tax sales for another 1 to 3 years.
Two years for sale and they only lower $5k? Is it greed or stupidity?
I see realtors finally trying to educate through media and other means what actually qualifies as a desirable price reduction. I think part of the problem is too most realtors today don’t have any “down-market” experience and they’re just testing for the first time what works and what doesn’t. May of the the old-timers have been saying for some time now to not even bother with a price reduction unless you’re willing to go 5% under your lowest comps. Now that todays market has excellerated to the downside, most would recommend that number be pushed to 10%-15% under comps. I have to agree that it’s just plain idiotic to take a 539K home and reduce it to 534K. A person looking at the 539K home isn’t going to be any more induced to go look at this home with a 5K reduction. Why? Because they already figure they have at least 5K-15K negotiating room when they make the offer. Do you think in todays market the initial offer is at asking price? Yeah right! People looking at todays list price are already saying to themselves “how much are we going to low-ball this thing”. I’ve noticed in our area that even the folks reducing drastically are getting low-balled under their drastic reduction. Sorry, it’s just the way this works.
If you’re a seller and your reading this, don’t even bother with anything less than 10%-15% reductions. If you’re not willling to do that, you might as well keep it at your current asking price and wish for the best. (FYI - wishful thinking is only going to sell your house 10 years from now when prices recover)
If you’re a seller and your reading this, don’t even bother with anything less than 10%-15% reductions.
You mean like these?
Price Reduced! Morris 8/18 - 8/28
Unfortunately, this list just covers a small part of Northern New Jersey, but it’s representative of what we’re seeing across the region.
Caveat Emptor!
Grim
Tracking local MLS I have been following a house that has gone from $445k to currently asking $325k…
Destin, Florida… bought in 2001 for $225k…
Very few sellers are seeing the writing on the wall, I think this guy sees it…
Realtors are educating people, but not out of any altruism. Those guys only get paid when a sale is made, so I expect them to adapt quickly. In fact, they will be leading the parade in urging sellers to drop price.
“In the past 10 years, the number of new single-family homes built in Tippecanoe County has outpaced the estimated number of new households. According to census records, Tippecanoe County added approximately 5,900 new households from 1995 through 2005. The total of all new residential units built surpassed 16,000, or well more than the total population growth.””
As the Census Bureau says there are 16 million vacant housing units in the US.
David
http://bubblemeter.blogspot.com
I am originally from Indiana. Grew up there and graduated from Indiana University. If there are problems there, then there will be housing problems EVERYWHERE. While you didn’t see goofy appreciation by rampant speculation in Indiana, I am sure you saw the use of suicide mortgages. I think Indianapolis might lead the nation in foreclosure rate. The economy there is a bit sluggish I believe. Not good when all the ARMs start resetting.
Went to Purdue in W. Lafayette. There is no shortage of land there! Corn fields in all directions. Noone from Florida (en masse at least) is going to move there. Lafayette is peculiarly cold and snowless and flat in the winter. This San Diego boy bailed and won’t be going back!
As far as jobs/industry, “Aluminum Company of America (ALCOA), Eli Lilly and Company, Siemens PT&D, Wabash National Corp., TRW, Great Lakes Chemical, Caterpillar Large Engine Division, and Subaru of Indiana Automotive, Inc. (SIA).”
In otherwords, not exactly “growth”.
Ditto - I am from Muncie In and the report is death. Absolutely no jobs since GM / Delco Battery shut down. No work at Warner Gear etc. Even the Wino’s have no one to mug!
Muncie is called Middle America - if that is true it portends many sad tales to come.
Bearnanke, sorry to hear you are a Boilermaker!!! Just kidding. My sister married a civil engineer who is a Purdue grad earlier this summer. She is a die hard IU fan so it will be an interesting household come hoops season.
I grew up in North Manchester and Decatur, IN. I agree with both the assesments on the job market. No shortage of land either. The weather is tepermental as well. I saw temps as high as 103 and as low as -30. You experience every type of every weather season living in the Midwest.
Sorry to hear about your sister (IU fan). Glad I’m a boilermaker, glad I’m a brees fan, sorry I’m a (fairweather) chargers fan
Notorious, I am an ex-Hoosier to and have seen Breaking Away more than a few times. I grew up right down the road from you in Columbia City and also went to IU for a time. I do get back down there often as I live just one state north. The biggest problem that I see there is the implosion of the automakers with the stand out in the Fort Wayne area being Dana Corp. which filed for bankruptcy. A good chuck of the people I graduated with left the state just simply because they couldn’t find the jobs that they were trained for. It doesn’t look good for the Hoosier state and it’s worse here in Michigan.
indiana state represent. lafayette, indiana - bubble. this is just too much. there is land for days in indiana. who would buy at 250,000 in indiana. developers have lost their minds and people willing to buy at these prices deserve to get burned to crisp.
The only good land in Muncie is near Ball State U. and Ball Hospital.
But hey, Indiana has more potential terrorist targets than any other state in the U.S.
I’ll represent the ND faction here (and I graduated from ND and IU). In South Bend, we did not experience anything like the appreciation that other areas have seen, but the prices are going down. It’s the usual culprits: low wage area, industrial base is long gone, not a magnet for equity locusts because the weather here is well, let’s just say that Chicago people are glad that they don’t live on our side of Lake Michigan because we get their cold and a lot more snow. We have a lot of buildable land (yes, they’re not making more of it, but we have plenty here and don’t need any more) and the infrastructure to handle it. I’d say that they weather is our greatest barrier to growth since for some reason most people don’t like ~75 inches of snow in an average winter.
On the other hand, commutes are short (I live 5 minutes from my office) and I can afford a house here that I wouldn’t have been allowed near in the bubble areas like PHX, SD or Boston.
“Len Wilson, broker in Lafayette, said after a fairly busy first quarter, the spring and summer months have settled into a classic ‘buyer’s market.’ ‘Business has been going down steadily, even from the standpoint of new construction. I don’t understand why,’ Wilson said. ‘Starting prices on homes are starting to come down.’”
Sounds like they were right - people have finally been “priced out forever”. There’s nobody left with any money to spend on crappy condos.
If you don’t want to do yardwork in your golden years, instead of selling your home (with all the equity) to buy a condo…try hiring a yard service.
“If you don’t want to do yardwork in your golden years, instead of selling your home (with all the equity) to buy a condo…try hiring a yard service.”
So good, it should be posted twice!
On my half acre lot, I can get yard work done for $25.00 per week.
Spoiler — great point, one that has baffled me for years. I know many retirees who own homes much more expensive than I can afford, who have decent enough incomes/assets, and who would leave the country before they’d pay a yard service $120/month to mow their half-acre and trim the hedges. Even here in Florida, the lawns don’t have to be mowed weekly in the winter.
I don’t think it was the selling that was a problem– it was immediately buying (as opposed to renting) a condo that sunk them. My parents bought a condo 20 some years ago. They were never keen on yard work, wanted to be close to the metro, etc. (both still doing some work at the time.) But before doing that they rented to see what they really wanted and needed in a condo. Then they bought and settled in for a long period of declining condo prices. It probably took 10 years to get back to what they’d paid for it, but that wasn’t a problem since they weren’t selling. They finally sold a couple of years ago to move into a continuous care retirement home. They were pleasantly surprised to be able to sell at a nice profit– something that happened only rarely over a lifetime of buying and selling while chasing their careers across North America.
The retired steelworker, however, soon found that just climbing the stairs in their two-story, three-bedroom condo was laborious.
I would think it was the stairs that really got to him.
My mom got to the point where she could not handle the yard or the stairs. She sold long ago.
Regardless, whether the issue is caring for the yard; mobility into or around your house; etc., selling a house is more often a necessity than a choice.
My guess is that there was speculation everywhere, some areas just weren’t at the scale of others.
You can say that builders were speculating like crazy, 16K new homes and only 5900 new households is incredibly speculating…this isn’t Cosner’s Field of Dreams…”if you build it - they will come”. It is more like, “if you build it - you pay the loan, you can’t sell, and you are now screwed”
NO, no, no.
You must think Mexicans. and other “immigrants”.
Remember Bernanke’s little speech. It wasn’t about the Fed, or the United States, it was about the importance of Globalization and open borders, and how that makes us all better off.
What a load of crap!
Nonetheless, these houses were not built for us. They were built to accomodate the “new Americans”.
You just need to see their “vision”…………..
Frankly, I think it’s a nightmare, but I still expect all the units to be filled with Government sponsored “loans” to newly legal, illegal aliens. Count on it.
And by the way, you can see I was right about Franklin Raines, he gets to walk, keep the money and suffer no consequence for being a lying theif.
Believe it or not the Hoosier’s have mexican problems too. They have to have signs and answering messages in spanish.
You have to wonder about the insistence of calling it a “buyer’s market” when to all intents and purposes there aren’t any.
Selling the condo just because of the stairs? Time to hack up an elevator out of old garage door openers.
LOL. I’d like to see it. I can picture McGuiver rigging up something like that. I bet then they’d complain about the oil marks (from the chain drive) on their clothing.
“….lot of inquiries coming from out of town. A lot of people are coming from the West Coast and East Coast, even from Florida,’ he said.”
As a native Californian, I find this statement by Realtor Wilson to be not credible. Why would anyone move from a state with temperate weather to one with snow, tornadoes, and radon??? Seems like a “wishful thinking” statement, imo.
I’ve considered moving to this exact area. Not that Realtor Wilson is aware of that, but if I’ve considered it - I’m sure others have.
I moved from CA to IN for a couple of years before coming back - both moves for work. I was happy as a clam in northern Indiana.
Me too. Had a beautiful Victorian in Terre Haute. But left my profession for a new one and came home to SD for grad school. Would go back there (or elsewhere) in a sec if not for business community here. I like snow, I miss winter, and I really liked affordable housing. Only problems with Terre Haute were the smell (paper mill) and no 30-something professional groups. Will leave SD if prices don’t come down 40% - love the people, hate the heat (east county), the traffic and the prices. But will deeply miss a lot of people.
Why move to a “crappy weather” state? Well, I sold my 1500 sqft Orange County condo and paid less for a 4000 sqft highly upgraded home in Columbus, OH. And I’m not alone, our next door neighbors are from Manhattan Beach. At least half of the homeowners in my neighborhood have recently moved here from bubble areas. Don’t get me wrong, the weather in SoCal is the best…but weather only gets you so far.
Columbus? Welcome to the neighborhood… which one, Dublin, New Albany, UA? Just curious… 4000 sqft homes don’t grow on trees around here.
Yes, the Great Lakes states are strictly 4-season territory, but it works for me… and a few million other people too
Just to add that if you really like the coastal feel, you can get some of that in the midwest. The west coast of Michigan on Lake Michigan is very nice (despite only going there once or twice). Yes, it’s fresh water, but there are sand dunes, coastal vegetation, substantial wave action, coastal-type communities (old fishing town, etc), and more. And while something right on the beach might not be as cheap as the rest of the area, I’ll bet you can find cheap stuff close to the beach. And whatever is on the beach is going to be way cheaper than anything on California’s west coast. And yes, Lake Michigan is large enough to enjoy a sunset over the water. You can even surf there … maybe not 40 foot high waves like the north shore of Hawaii, but enough to have some fun.
Lafayette/West Lafayette is a textbook heartland/apple pie town. Main employers are Purdue University and heavy manufacturing like Caterpillar, Alcoa, and tractor-trailers. Low wages, but low costs. Pleasant, low-key type of life. Not to mention the black-gold fertile soil that surrounds the area. And the specuvestors are going to ruin it. Again.
Ugh, that’s what I hate most about this bubble. There are more speculators than buyers, more houses then households. I have no problem with construction if they build solid small houses which create neighborhoods that are a good fit for new families that need a home. But I just can’t bear to see the land and trees destroyed so that out-of-state locusts can trade empty, overpriced, oversized, and unwanted crapmansions back and forth. Never mind the banking side of the pop, I just want to see them stop building!!
(sorry, got ranty)
Amen. That has been the major problem in Wilmington NC. Knocking down trees and filling in wetlands that are important hurricane buffers.
That and the fact that the municipalities have been allowing all this building without figuring out how to support it. Three major sewer overflows in the last 18 months. And DOT tried to imminent domain my families land (part of the plantation that has been in my family for 150 years) for a drainage pond. When we fought them (and won), they tried to paint us (the LANDOWNERS) as crazy environmentalists against progress.
Makes me almost wish a major hurricane (and not just the Cat 3s we get) would come visit the area.
urban sprawl:
cut down all the trees and name the streets after them
An all too common thing - name a subdivision after that which you destroyed - Pleasant View, Eagles Nest, Live Oak, etc etc.
Affordable Acres, Tranquil Retirement, Rosy Outlook, etc. etc.
Congrats on winning! A drainage pond will never replace lost wetlands. I knew that marshlands and bays serve as natural filtration mechanisms against land-born pollutants. I did not think about hurricane damage absorption. Makes sense esp regarding the 9th Ward in NOLA. Thanks for posting that info.
In NC all hurricane damage is tidal surge. All of it. Remember the major floods that hit as far inland as Greenville when Floyd hit?
Having green stuff to absorb the surge is a good thing.
they just got a nissin plant expansion
2001 prices = wow I thought 2003 would be the bottom till 08
When Lafayette, IN is a bubble town then no one is immune. Anyone who keeps saying about their city/town, “It’s different here” needs to read this article.
It’s not a bubble. They had 6% appreciation from 2001-2005.
Not annual, total. Now the economic conditions that have kept home prices flat are starting to push them down. Anyone who says about their town, “It’s different here” - is living in a place that’s different from Lafayette.
Semantics. Maybe not a bubble, but the point is that real estate is collapsing - everywhere. I think this article is fairly big news.
What mystifies me is how so many sellers simply can’t seem to do math. I see it in my own neighborhood where there is one house on the market that is at least $50,000 overlisted. Similar houses, some nicer list for at least $50,000 less and probably sell for $60,000 less.
These folks have been sitting there with that empty house on the market for a year now, paying mortgage, HOA fees, utilities including substantial water bills in the summer for watering the new lawn, and landscaping service. The place has to be burning up at least $3 grand a month for them and that’s a conservative estimate. So they’ve probably dropped $36 grand into the place over the past year just to keep it overpriced. And now the place is stale. And this was never a bubble market (Central Texas) so it’s not like they were expecting monthly appreciation.
I hope they hold fast on their price because it provides a perfect foil for my house when we put it on sale in early spring. First the agent takes then there. Then they come next door to a nicer house listed for $75 grand less.
OT:Latest track shows Hurricane Ernesto to hit S.Fla. (Miami, etc.) by Wed. morning. It would be interesting to see how many cranes are still standing after this one. I wonder if any of the incomplete “high rise/luxury” condos will get effected.
It keeps tracking east so fast I wouldn’t doubt it misses Fl. all together.
If those things get pounded, it will be the insurance underwriters that get hosed, not the speculators. I can’t believe I’m routing for the insurance companies….
This is somewhat close to home for me. I have been considering moving back to central Illinois from north San Diego county for a bit. What has stopped me is how screwed up things are around there. Speculation and suicide loans abound, and people asking $300K for a house that 5 years ago sold for $80K is not something I am going to play a part in. I think that the climate will be changing a lot in the next 8 months for that market.
Go back and offer whatever 80K plus a couple points for natural inflation/appreciation would have been. Sooner or later, you will get a deal, probably from the bank.
The only thing keeping me from moving back to the Midwest is the job market.
I hear you there, but I am going to be taking my job with me. As the boss man it’s where ever I say it is.
Sales of homes brisk despite jail
COMPLEX NEXT TO ELMWOOD FACILITY WILL HAVE ALMOST 700 DWELLINGS
http://www.mercurynews.com/mld/mercurynews/news/local/15379431.htm
New Housing Insanity continues in Silicon Valley despite existing listings laungishing on the market for weeks. This is the strangest market I’ve seen.
“A recent Saturday open house brought in 1,700 of them — well above the 300 that South Bay KB developments typically see at similar events, KB spokesman Craig LeMessurier said. Almost all of the 40 single-family homes and 40 townhomes offered for sale so far have sold, LeMessurier said. Only 15 condos have been put up for sale, but more than half of them are already claimed.”
1700 people and they sold “almost” all of the 80 SFH & townhomes for sale, 15 condos and “more than half of them are claimed.” Doesn’t sound too successful to me, considering they had 1700 people at the event.
When the “for sale” sign on your condo is rusting…..you might think about lowering the price.
“Len Wilson, broker in Lafayette, said after a fairly busy first quarter, the spring and summer months have settled into a classic ‘buyer’s market.’ ‘Business has been going down steadily, even from the standpoint of new construction. I don’t understand why,’ Wilson said. ‘Starting prices on homes are starting to come down.’”
I don’t understand why, either. Doesn’t everyone want to live in Lafayette, Indiana?
Oh my gosh! These people are sooooooo…. clueless.
Homeowner Ron Aldridge thinks, “the county people have let the housing market run away from them.” As if the government will stop speculators from building. They won’t. Its not in their best interest. They issue permits in hope of increasing their tax base.
In addition, realtor Len Wilson believes and, “anticipates some of the next round of home buyers in Greater Lafayette will be coming from areas outside the Midwest. ‘We’re getting a lot of inquiries coming from out of town. A lot of people are coming from the West Coast and East Coast, even from Florida,’ he said.”
Wake up Len! Those out of towners are really speculators and they are never going to show up. They’ve driven prices up in their local markets and now they are levering up and speculating in your backyard.
Somebody please turn on the lights in Indiana and explain to these folks that this bubble is huge and it is affecting everyone from coast to coast.
I have to jump in here as a West Lafayette native to say it is a great place in which to live and raise kids. Weather comes in all varieties and I like it that way. It is a small city with a highly educated populace and steady, dependable industries. Purdue University is the engine that keeps the area humming. The unemployment rate is next to nothing–2% or something like that the last time I saw. If Lafayette is having a housing bust then you can bet things are bad everywhere. People aren’t making any more money but their expenses are going up and up, with no end in sight. As a nation we are descending further and further into debt with no political will to curb spending. Energy costs are skyrocketing. Iraq is a bottomless pit of lost money and lost lives. Low interest rates have only served to keep a lot of folks living above their means, by using their home as an ATM. It is finally sinking in for most people that things are going to get worse before they get better. Lafayette will be fine but I’m not so sure about other areas, especially Michigan where I live now. With more careful, thoughtful leadership at the national level I believe this crisis could have been avoided, but the cowboys in charge have led us into a situation that may take a generation to put right. *sigh*
On a more upbeat note…GO BOILERS!
We’ll see ya’ on the gridiron Oct. 28
Go Lions!