Are they more than mobile phones?

Most of us remember in the late 1980's when a friend or colleague told us about a phone he/she had recently had installed into his/her car.  It was called a cellular phone, or more commonly, a car phone.  Another application of the same technology was a phone contraption packaged in a bag, like a back pack.  In both instances, the handset resembled the wired phone we had at home.  The new technology was special, but before too long, it was common to own a car phone or bag phone.

Technology progressed and the prices came down.  The next iteration was a smaller device that was handheld, often called a flip phone. Blackberry created a new combination of technologies and linked the telephone application to the Internet (note: the Internet was a notion unknown to most of us when we purchased our first cellphone).  The functionality of the Internet component was awkward and the download time was slow, but at a minimum, the Blackberry brought email to our cellphones.

In 2007, Apple introduced the iPhone that brought a quantum leap to the technology applications available on our cellphones ("smart phones") and made vast improvements in the speed of data transmission and quality of visual presentation.  A competing set of devices were introduced within a year, generally known as Androids (or droids).  Eighteen months ago, Apple brought to the market a hugely popular devise that is between an iPhone and laptop called the iPad.  The second version of the product was introduced last month and sales have outpaced production.  Most of us either have or want to have the iPad.

What we used to call a cellphone is now more aptly called a mobile device.  We call them smart phones, but realistically, they are small, handheld computers that include telephone capabilities.  In 2010, 30% of the US cellphone users owned a smart phone.  Of the smart phone owners, 29% own one of theDroid products, 27% own Blackberries and 27% own iPhone. Within 18 months, that number of smart phone users is projected to reach 70%.  Technology experts are also suggesting that by 2013 there will be more connections to the Internet from mobile devices (smart phones and iPad type products) than from PC's or laptops. The implications for the delivery of information is significant. Many consumers will no longer be willing to wait until they are home to research a query on their computer or a resource book.  Instead, they will desire to have the information immediately retrievable on their smart phone.  It is an exciting change from a real estate perspective. We now have an opportunity  to deliver property information to any consumer who is sitting in front of a home they find attractive by pushing it to them on their smart phone

The next few years are going to be interesting and fun. Hold tight, it looks like the best is yet to come.

USA Today Article

Congratulations to Greater Lafayette for being featured as the spotlight community in "USA Today's" weekly column, Close to Home.  For those of you not familiar with the column, it identifies a community in the U.S. each week and discusses the condition and unique features of its residential real estate market.  In the September 7th issue of the paper, Lafayette Indiana was featured.

The article, written by Christine Dugas, was well prepared and accurate.  Unfortunately, it was written just after the release of the July closed units numbers, so the tone was tepid.  Maggie Stark, a seasoned agent in our office and President of the Lafayette Regional Association of Realtors did a fine job explaining how the expiration of the home buyers tax credit created a natural decline in volume.  She also touted the overall strength of the community and local economy.

Cheryl Butcher also had an opportunity in the article to feature her 6,300 square foot log home on 14 acres on State Road 38.  It's hard to find better national exposure than the "USA Today".

July Residential Sales

Tippecanoe County Courthouse

As I have written earlier, the residential real state market across our country was favorably impacted by the first time home buyers tax credit created by Congress in early 2009 and expanded to include "move up" buyers in November, 2009.  In order for a buyer to qualify for the tax credit, an accepted offer on a home had to be in place by April 30, 2010 and the transaction had to close by June 30th.  As it turned out, Congress extended the close date deadline to September 30, 2010 after the close of business on June 30th.  [Note:  the inefficiency of Congress at times causes one to scratch their head and wonder why]

We had a strong sense that a meaningful portion of our demand this winter and spring was driven by the tax credit, but it was hard to quantify. As the April 30th deadline to have an offer accepted approached, the local market reached almost a frenzied pace. Many Realtors worked late nights in the weeks preceding April 30th.  It was wonderful!  As we feared, on the days and weeks that followed April 30th, the number of showings and accepted offers dropped noticeable compared to last year, especially for it being so early in the year.

Now that we are more than one month beyond the initial closing date deadline for the tax credit, we can measure the number of closed units with and without the benefit of the tax credit. The numbers are pretty incredible. Year to date residential unit sales through May 31, 2010 in the Greater Lafayette area were 19% ahead of the same period last year.  However, that is when the fun began to end.  Residential unit sales in June were 12% below last year and July was 32% below July, 2009.  On a year to year basis, year to date sales through July are 3% below last year.

We are currently in a slow season, measured by showing activity.  However, what we are experiencing now is not uncommon for the back to school season. We usually see a bump in showing activity and Open House attendance after Labor Day.  Let's wait to see what happens in September.  I'll report back

"Not So Sixties" Home and Garden Tour

For those of you who can't get enough of HGTV, love to see what your neighbors have done to renovate or decorate their homes or enjoy the beauty of a fine residential garden, you might want to consider attending the Barberry Heights "Not So Sixties" Home and Garden tour in West Lafayette. Barberry Heights is a West Lafayette neighborhood developed in the 1960's and early 1970's, north of Sagamore Parkway and south of Cumberland Avenue between Salisbury and Soldiers Home Roads.

Here's a snippet from the material promoting the event.

"REMEMBER THE 60’S? Acres of avocado green and harvest
gold shag carpeting inside, with rows of round trimmed yew
bushes, looking like big fat birds, for landscaping in the yard?
Barbarry Heights is NOT SO SIXTIES now! Five neighbors
are inviting you to see their remodeled family homes and four
more are showing their gardens. All have been updated and
remodeled, highlighting what owner effort and imagination
can do to transform homes and landscaping.
Please join us to see large open spaces, lofts, wide windows,
new kitchens, and family antiques mixed with new colors and
collections. Gardens include Japanese, cottage, with medicinal
and aromatic plants, and just beautiful.
--Maybe a few new ideas, and at least a lovely afternoon!"

Tickets can be purchased in advanced at Ace Hardware and Gretel's in WL or Bennett's Garden Center in Lafayette Tickets can be purchased the day of the event in Lomell Park near the intersection of Barlow and Wilshire Streets in Barberry Heights. Tickets are $5 a piece. Children under 12 years old are free.

US Housing Prices Fall Modestly in the Fourth Quarter: 2009/Greater Lafayette Fares Better

Recently published data from the Federal Housing Finance Authority reports existing home sale values dropped by 1.2% from the fourth quarter of 2008. That compares very favorably to a 8.2% decline in the fourth quarter of 2008 over 2007.

The numbers for Greater Lafayette are more encouraging. Of the 298 Metropolitan Statistical Areas, Greater Lafayette's appreciation in housing value in the fourth quarter on a year over year basis, ranked number 32 with an average 0.19% appreciation. Other Indiana MSA's also fared well. In fact, Terre Haute was ranked number one.

City/Rank/Year to Year 4th Quarter Appreciation

Terre Haute/1/3.11%
Bloomington/20/0.83%
Evansville/29/0.43%
Lafayette/32/0.19%
Indy/53/-0.55%
South Bend/93/-1.70%
Anderson/102/-1.95%
Fort Wayne/123/-2.55%
Gary/149/-3.38%
Kokomo/208/-5.98%

Again, the processes measures and ranks appreciation in housing value from the fourth quarter of 2008 to the fourth quarter of 2009.

For those who spend time in the south, Florida continues to struggle. Here are the same statistics for selected Florida MSA's

Punta Gorda/191/-5.48%
Fort Meyers/263/-9.71%
Tampa-St. Pete/271/-10.75%
West Palm Beach/272/-10.86%
Naples/287/-8.03%
Miami/288/-14.02%

For those who are interested, the lowest rank MSA was Las Vegas, with a 19.30% average 12 month loss in value. Our issues in central Indiana appear less complicated as one reviews the economic statistics in other communities.

A tip of the cap to RPAC

It isn't often that a fundraiser is fun, but the Lafayette Regional Association of Realtors held a "fun" fundraiser last Thursday for its Realtor Political Action Committee (RPAC). Before I tell you about the event, let me tell you about RPAC. Our national trade association, the National Association of Realtors (NAR), is one million member strong and has one of the most meaningful and respected governmental affairs activities, both in Washington and Indianapolis.

Although our lobbying efforts are going to be noticeable due to the size of our membership, our real strength comes through the grass roots nature of our businesses, the breadth of home ownership in the United States ("the American dream") and the critical nature of real assets in the success of most commercial enterprises. RPAC certainly uses its monies to support elected officials who support the norms of private property rights, our real value comes in unique quality of information we can aggregate through our individual MLS's. In Indiana, our local Realtor Associations have agreed to share "sold" information with our state trade association (the Indiana Association of Realtors) to create a real property data base. In the most recent quarterly, we began to release monthly information about statewide and county trends in residential real estate.

Last week, the organizers of our local RPAC fundraising efforts, led by Maggie Stark of our office, hosted "Dancing with the R's" at the Outpost. Patterned off of the TV show, six Realtor members of the Lafayette Regional Association of Reatlors took dancing lessons from Arthur Murray's and competed in a dance competion. The 2009 dancers were Eddie Gallegos, Penny Mattingly, Lisa Godby, Ryan Parker, Deb Talbot, Brett Leuken. All of the dancers were great. They demonstrated courage and finesse. I give all six of them credit for being the center point of a great fundraiser. Everybody had a good time and lots of money was thrown at RPAC.

Home Value Statistics

In its 2009 second quarter publication, the Federal Housing Finance Authority reported Greater Lafayette ranked number 7 among the nation's 296 largest MSA's in the year to year change in home values. According to the government report, the average home value in the second quarter in Greater Lafayette was 2.25% greater than the second quarter of 2008. Personally, I believe this number is optimistic, but the relative ranking of 7 among 296 is encouraging and believable.


Interestingly enough, in reviewing the 25 largest MSA's, only three had a positive year over year change and of those three, two were less than one percent (Denver and Pittsburgh) and the third was 2.90% (Houston). The most troublesome changes in value were in Merced, CA (-27.15%), Las Vegas (-26.21%), Vallejo, CA (-23.75), Miami (-22.53%) and Medesto, CA (-22.53%).


Of the 296 MSA's, the only communities ranking ahead of Greater Lafayette were Spartanburg, SC (3.48%), Amarillo, TX (2.67%), Fort Smith, AZ (2.55%), Houston (2.42%), Macon, GA (2.33%) and Lubbock, TX (2.27%). Here is how the other major Indiana cities fared:


City: % change, rank

Anderson: -1,82% 98
Bloomington: 0.40%, 50
Columbus: -0.45%, 95
Elkhart: -2.36%, 142
Fort Wayne: 0.08%, 70
Gary: -2.79%, 152
Indianapolis: -1.24%, 119
Kokomo: -1.72%, 135
Michigan City: -0.03%, 73
Terre Haute: -3.18%, 160


Although the relative condition of the Greater Lafayette residential market is reason to be thankful, it is not time to break champagne, noise makers and balloons. We are still experience nervous buyers, inconsistent demand, on-going foreclosures and frequent short sales. However, our numbers are not getting worse, our supply of new and existing homes for sale is better matched with local demand compared to one and two years ago and there is every reason to believe we are much closer to the end than the beginning. Have faith.

What a great time to be a first time homebuyer

I think it would be safe to say that within the 20 years that I've been involved with residential real estate, this is the best period of time I've experienced to be first time home buyer.

• Interest rates are attractive,
• credit is still available to those who have paid their bills on time,
• the FHA loan program offers responsible terms for low down payment loans,
• there is a wide variety of homes to choose from,
• the Greater Lafayette market has not suffered from a "free fall" in property values like we have heard about elsewhere, and most importantly,
• The American Recovery and Reinvestment Act of 2009 authorizes a direct income tax credit to first time home buyers equal to 10% of the purchase price of the home, not to exceeded $8,000.

The tax credit is an amazing opportunity and it is simple. Anybody who has not owned a home as a principal residence in the last three years and closes on the purchase of a new or existing home as their principal residence between 1/1/09 and 12/1/09 is eligible. Once you have closed on your home, you can amend your 2008 income tax return and apply for a refund equal to the tax credit amount or apply the tax credit to your 2009 income tax liability.

There are only two "catches" to the program that I can see. 1) The size of the tax credit is reduced for buyers who have income in excess of $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. 2) Home buyers who use the home as their primary residence for less than three years are subject to a recapture of a portion of the tax credit. For those who live the primary residence for more than three years, there is NO recapture of the tax credit!

For those who are interested in learning more about the program, Coldwell Banker Shook, in conjunction with three local lenders, is conducting several First Time Home Buyers Seminar. They will be offered two more times this spring:

-Tuesday, March 31st, 6:30 at the Tippecanoe County Library -- Klondike Branch (corner of Lindberg and Klondike Roads, or

-Wednesday, April 29th, 6:30 at the Tippecanoe County Library -- Downtown Library.

Each session will last about one hour. They will be very informal. Registration is not necessary.

If you have any questions about the tax credit, shoot me an email and I will do my best to get you an answer (cshook@shook.com).

Charlie

P.S. As I wrote this post, the men's basketball team lost a great game to UConn in AZ. To Matt Painter and the Boiler basketball team, thanks for a great year and helping us remember what student athletics is all about.

Spring is breaking loose!

The trends in residential real estate in Tippecanoe County are encouraging. We see it within our office and I hear if from my colleagues in other local brokerage offices. My "back of the envelope" forecasting tools are primative, but pretty reliable.

1. The number of showings scheduled on listings within our company for three of the last four weeks was above the number of showings scheduled during the same weeks last year (note: the number of properties listed on 3/10/08 and 3/10/09 are within a few properties of each other).
   
2. The cumulative number of earnest money checks received on accepted offers within our office in March is measurably above the cumulative number received at the same point in March last year.
   
3. With the exception of last Sunday, when we experienced stormy weather, Open House traffic has been, by and large, strong.

These may seem like small victories, but they are the types of grass roots activities that are necessary for the market to take off. Let's see if the activities begin to manifest themselves in a strong upsurge of pending sales and, eventually, closings.

I'll keep you posted...

Charlie

Fishermans' Warf