Jim Kouns

The quote attribted to Yogi Berra seems to apply to the recent announcement of plans to monetize the $8,000 tax credit for first time buyers. While details are non-existant at present, it looks like it would take the form of some sort of bridge loan. NAR and many of my fellow REALTORS are trumpeting this plan as a boon to our industry, but I have to wonder, "Isn't the opportunity to buy a home with no equity one of the things that caused the current housing problem?" Buyers with no stake and no equity are the first ones to walk away when the going gets tough, adding to the inventory of foreclosures that the plan was designed to reduce.

Home ownership is an investment and there's no other area where a person can make a substantial investment without equity. Commercial loans require 20%, even insured conventionals require 5%. Stock or bond purchases require 100% unless it's margin account, but even then a substantial equity is required and the security, unlike real estate is liquid.

In the panic of trying to cure the housing mess, it looks to me like we're heading back down the same road. "Deja Vu' all over again."

The increase in market activity that I have been watching and reporting for the last few months shows no sign of ending. Pendings increased at a steady rate through Jan. and Feb. and the rate of growth has increased significantly in March and April to date. At the end of Dec. 2008, Del. Co. had 88 properties "Pending" as of yesterday, we had 168 "Pendings." In addition, our average sale price for the first quarter of 09 was up 6% from the first qtr. of 08. There are a number of higher priced homes now under contract and I expect the average sale price to increase further as these homes close in the next 30-45 days.

Here in Del. Co, IN we didn't experience the price "bubble" and therefore have not suffered the drastic declines in values and sales seen in the formerly hot areas like CA, NV, AZ and FL. The declines we've had have been the result of job losses and our unusually high reliance on property taxes. The job losses have fairly well stabilized and the new state mandated property tax caps have gone a long way to eliminate that issue. Granted there's still a lot of economic turmoil both locally and area-wide. However, interest rates are super, our inventory of homes for sale is holding steady at around 700 and I think it's a great time to either buy or sell a home.

This week has been a busy one, especially for this time of year. I've had two sets of serious, qualfied buyers, lots of showings on my listings and one received multiple offers at or near full price. I've heard other agents in our office who are similarly busy or even more so. Our Board pendings are up 12% in the past week and up 41% over the monthly avg. of the 4th qtr. of 2008.

We're all wondering what's going on. There have been no positive economic events here in Muncie, Ball State Univ. is on Spring Break and the weather has been nice but not unusually nice. I did see Crocus in bloom today and signs of spring are at hand. Maybe that's it or maybe this is just a little flurry of pent up demand. What ever it is, I'm thankful for it and plan to enjoy it for as long as it lasts. Who knows, maybe we've turned the corner.

Once again IN weather has lived up to it's reputation. On Tues. morning it was 9 degrees and today(Fri) it's nearly 70. We've had several days of warmer weather and it has given me the urge to get out in the yard and look at my trees, bushes and perrineals. It's been the coldest winter we've had in years and there were several that I worried might not survive. To my delight, I see new life in all of them.

As a regular watcher of our residential market data, I also see new life. In Muncie-Del. Co., IN, pendings are up for the second straight month and up 26% since the 4th quarter of 2008. Our inventory is holding steady and a number of high-priced properties have gone under contract in the last several weeks.

I think the analogy is pretty clear. Though we have cold snaps and a few weeks of winter still ahead of us, spring is beginning now. Also, though we are by no means out of the real estate crunch, our market is "greening". If we can get the media to stop painting everything as it is in CA, NV, AZ, FL and D.C. people will regain their confidence. That probably isn't going to happen, so the weeks will go by and the pendings will become closed sales and new pendings will continue to materialize and increase. Then someday, someone from the media might look around and realize that for most of the nation, the down cycle has run its course and a renewal is underway. Maybe they'll consider that newsworthy, but I doubt it.

I sat in sales meeting this morning listening to an agent whine about unmotivated buyers and low-ball offers and I wondered what agents like this do with their time. A relatively simple examination of our MLS shows pending sales units up about 10% from the 4th quarter of 2008 and our 2008 average sales price up 2% from 2007. In addition, our Board's listing inventory is the lowest it's been in many years.

To me, those are positive signs. Here in Muncie we didn't experience a real estate price bubble. Therefore, we haven't seen the drastic effects felt in other areas. I know the public perceptions fueled by the media, have everyone living in CA or NV or wherever there's the greatest market turmoil, but isn't it our job as agents to educate our buyers and sellers as to the reality of our local conditions?

It's easy to look at current activity or lack thereof and say this is gloom and doom, but just as sure as it's Feb. and the snow is coming down, spring is only 6 wks away. Before we get there, there will be warm spells followed by cold snaps and the warm spells will become more frequent and of longer duration. NAR reports their pending sale index up in Dec. Muncie's pendings are up in Jan. I think these are the beginnings of an increasingly active real estate market and I'm looking forward to spring in both my business and my calendar.