Jim Kouns

The first quarter of 2010 is now history and some of our real estate market results may be surprising, especially to those who follow the media. In Delaware Co, IN our units sold were up 10.33 % from 2009 and were the highest in the past 3 yrs. Median sale price was up over 9%, and average days on the market were down by a whopping 41.7% to their lowest level in 7 yrs. Taxes as a ratio of selling price decreased almost 17%, foreclosures as a ratio to units sold decreased by 3.3.% and new listings were up by 3.4%. Inventories have decreased steadily in the past yr, especially in the higher price ranges. We actually have shortages in some areas and price ranges.

We're now halfway through the month of April and activity is increasing. Pendings are up 11% from the end of March and up 60% from the average of the 4th qtr. of 2009. I think we'll see more pendings as people try to take advantage of the Homebuyer Stimulus and it will be interesting to see if that's incremental business or if it's being borrowed from future months.

We've all been bombarded by the headlines, "Existing Home Sales Skid" (USA Today),"Housing Market Reaches New Low" (AP), "Foreclosures Continue" (Muncie Star Press), "Home Sales Plunge" (AP). Now we're starting to see things going in the other direction, "Home Sales Rise 9.4% Last Month" (AP). What do all these headlines and their accompanying stories have in common? They have very little to do with local market conditions in most parts of the country.

And yet, the other thing they have in common is their effect on the outlook and expectations of our Buyers and Sellers. One of our agents recently related that she's been working with a person coming here from the east coast. The guy regularly sends her any negative headlines he sees in his area, telling her that he's looking to take maximum advantage of the "Buyer's Market" and make low ball offers. To his surprise, he still hasn't bought a house. Our market never experienced the peaks and valleys of the past few years and in some areas and price ranges, we're actually short of inventory coming into the prime selling season and are again seeing multiple offers in some cases.

Many Sellers also have unreasonable expectations. In many cases, they've determined their homes won't sell or will sell way below value and therefore remove them or hold them off the market. At the other end, one positive article can trigger unreasonable optimism and they demand unrealistically high listing prices.

How do we counteract this? Fortunately, customers for nearly all types of media are decreasing, but that's not enough. I think we have to continuously try to tell the story of what's happening in our local markets. I do this in several ways. Each month, I take our MLS results and export them to Excel where I can do statistics and graphs. Every quarter I publish a YTD graphic report of basic market statistics, units sold, avg. sale price, days on mkt. and number of active listings. The bar graph has data going back to 2003 showing trends and comparisons. The report is then emailed or snail mailed to my past customers, sphere of influence and prospects. I also have a "roadshow" called "the State of Real Estate" that I do in Feb. for business and civic groups.

I can't say it completely counteracts the media, but it goes a long way. It does take time, especially in the initial set up, but it also establishes credibility and helps me deal with unrealistic expectations.

Real estate practitioners, lenders, consultants, and NAR big shots often comment on the state of the "Housing Market." I put this in quotes because they refer to a supposedly national market. I read just such a post this morning from someone in GA who calls himself The Housing Guru." He was making predictions about the future of the "Housing Market" and I guess it hit my hot button.

I'm sorry, but anytime I hear someone talk about the "Housing Market" I immediately tune them out. There is no such thing as the "Housing Market," (meaning national) all real estate markets are local! Believe it or not, there are areas of the country that never experienced the housing bubble. There are areas where jobs are plentiful for qualified applicants and there are areas where there is still a strong demand and buyer competition. There are also places where the opposite is true. When anyone tries to talk about a national "Housing Market," either in a positive or negative way, they do all of us a dis-service and help instill unrealistic expectations in buyers and sellers. If anyone really wants to be "The Housing Guru" they should qualify their observations to only consider their local markets.

2009 was a challenging year but there were many bright spots in east central IN. The inventory of homes for sale is lower than it has been in years and interest rates remain in the low-5% range. The inventory of homes over $300,000 has been cut in half with just over a 12 month supply remaining. Pending contracts, a reflection of future sales, are up around 5% from the same period last year and "Days on Market" for sold properties has decreased slightly. I believe there's reason to be quite optimistic about the potential for 2010.

Blackford Co. remains a difficult market reflecting the general economic climate there and producing about 11.5% fewer units sold. Over 43% of the Bl. Co. properties sold in 2009 were repo's. The encouraging news is that a number of higher priced properties sold in the 4th quarter raising the county average sale price more than 12% and resulting in very little inventory at present in the above $100,000 range. Days on Market also decreased slightly.

Looking at my invoice for 2010 dues, I think we should reallocate the $35.00 public awareness charge. Let's keep $30.00 for the public awareness campaign and use the remaining $5.00 to buy everyone at NAR a Christmas gift. The gifts I have in mind are signs for every door and plaques for every desk that say, "All real estate markets are local." Perhaps if they all see this statement many times every day, they'll finally get the message that all the rest of us already know, "All real estate markets are local."

The statisticians and economists at NAR continue to release statements and figures showing national market activity. After a couple of years of declining results, now they're telling everyone that things are better and of course the media splashes these stories all over te country, once again misleading the public and making our jobs much more difficult. When sellers and buyers read this stuff in their local papers, hear it on the TV networks and on radio talk shows, they develop unrealistic expectations, good or bad, making it hard to get them to accept actual local market data. I totally agree with a recent Blog entitled "Tell the NAR to Shut Up." The national statistics they quote are kind of like the person who has one foot in a fire and one in a freezer. Based on median or average temps, that person should be comfortable but I'll bet they won't be.

The upcycle ended nationally in 2005 and it appears the down cycle ended in 2009, yet our market didn't fall until late 2007 and the trigger was more of a local tax issue than anything else. Our recovery began in the first quarter of 2009, at least 6 months before the national numbers stared turning upward, and likely, most of your markets didn't follow the national trends either. If they did, it was probably not to the same degree. If NAR wants to continue publishing statistics, they should have to do it by market, similar to the way they publish the annual reports of home improvement costs and values. It still won't be specific, but it will be a lot better than what they do now.