Libertarian VP Candidate on small business

The Libertarian Party chose its ticket for the November elections: Bob Barr and Wayne Root. Although I will be supporting John McCain in the election, I was happy to see the following quote from VP candidate Root at the convention:

Root, a colorful media personality with a dynamic and enthusiastic speaking
style, brings several large voting blocs to the Barr/Root Libertarian ticket. As
a small businessman, I will aim my campaign at 27 million American small
business owners and millions of independent contractors such as real estate
brokers, stockbrokers, insurance brokers and mortgage brokers. They are the
economic engine of the U.S. economy. Small business now creates a majority of
non-government jobs. I believe small businessmen and women across America will
appreciate the fact that someone who understands their unique issues and
concerns will be part of a Presidential ticket for the first time in modern
political history."

From The Aftermath: Wayne Root on the Barr/Root ticket for President 2008 from Libertarian Republican by Eric Dondero



Will small businesses and independant contractors like REALTORs have a guy watching out for their interests? Will the Libertarian Party finally make inroads as a viable third party option?

What exactly is the state of home building?

I was asked straight up Friday - "what exactly is happening in home building?"

Here's what I know right now. 2007 was horrible because costs went up, margins plummeted and the mortgage industry self destructed. For our own company last year this meant that multiple buyers were told at the last minute that they couldn't buy a house because the mortgage company was gone!

Multiply this across hundreds of builders in NW Indiana, and you have quite a bit of inventory sitting through the winter that should have been sold and lived in last year.

Now, what's happening today? The market is actually stabilizing. Mortgage Companies, like our favorite First Financial Trust Mortgage Company, are continuing to rebuild and retool for an era that will feature a lot more FHA loans than the last ten years.

You can still buy a house, with no money down as long as you have decent credit. If you don't have decent credit, there are reputable consultants that can help you rebuild your credit. It may take a couple hundred dollars and some time, but you can get into a home in the next year.

This means that inventories are actually leveling off, and I project they will start to reduce over the summer. Good news for everyone, but if you have postponed buying a home, you better get moving because once we correct the inventory imbalance, prices will start back up. Right now, I'd say home builders will need to increase prices about 8% to make up for legitimate increases in costs over the next year.

Nationwide Home Building begins to pick up

US Housing starts boom in April
from ActiveRain Blogs by Simon Conway (Picket Fence Realty)

US Housing starts posted the biggest increase in more than two years in April.
According to the Associated Press, the Commerce Department reported Friday that
housing construction rose by 8.2 percent in April to a seasonally adjusted
annual rate of 1.03 million units. Most of the growth came from a big jump
in apartment construction (apartment building is defined as two or more units),
which rose by 36 percent to a seasonally adjusted annual rate of 340,000
units.
Applications for building permits, considered a good sign of future
activity, also recorded an increase in April, rising by 4.9 percent to 978,000
units. It was the first gain in permits in five months.
By region of the U.S., construction posted the largest gain in the Midwest, an increase of 24.4 percent when compared to March. Construction rose 18.5 percent in the West and was up 3.6 percent in the South. However, construction fell by 12.7 percent in
the Northeast.

Now the interesting thing for me is why haven't we seen any of
this? Oh yes - sorry - it's good news!

Note: Simon, you're so right, why do we only hear the negative from the media?

Market Update on Indianapolis

Looks like time to buy to me:

From Bankrate.com "Foreclosures are up, and sale prices are down. Indianapolis is No. 18 in RealtyTrac’s list of the metro areas with the largest numbers of foreclosures, with filings last year representing 2 percent of households. It’s an undervalued market, according to Local Market Monitor, whose data shows housing prices 22 percent below equilibrium. The NAR says condo prices are affordable, too, at $116,700 in fourth quarter 2007."

Change in foreclosures was up 7.9% but that's a little misleading since the foreclosures only increased 1,000 from 2006 to 2007. Here's the truth, a couple major builders beat up the market in 2004 and 2005 and the market had already tanked. 2006 and 2007 were level off years. Look for better than expected gains in second half of 2008 on property values.

This is the bottom of the cycle in Indianapolis: BUY

Google Maps adds Real Estate Layer

More searching capability, more reasons that a real estate professional better stay current on technology or they really aren't all that much help.

Ionut Alex Chitu / Google Operating System:Google Maps Adds Real Estate Search — As a Google employee recently said, “Google Maps is evolving from a driving directions and business search tool, to a comprehensive representation of all the world's information, on a map.” That's why Google Maps started to integrate different layers … (read entire article at link)

Sick of bad spin on news

I've said it before and I'll say it again, the housing market isn't nearly as bad as some people seem to want it to be.



This one got me: Home Builder Toll CEO on Traffic: "Worst we've ever seen"
from Calculated Risk by CalculatedRisk



Let's be honest, Toll Brothers builds high end homes. The market is already rebounding on the lower price levels for normal people in middle income families. It may take another 6 months for higher end homes to rebound.

LinkedIn Question raises attention on rents

I have been saying for months that the cutback by major mortgage companies on lending to "sub prime" borrowers should cause rents to increase pretty substantially. I know that there are investor buyers operating under this same assumption.

A LinkedIn question though suggests just the opposite: Do you anticipate seeing rents dramatically DECREASE due to the glut of vacant housing?
from LinkedIn Answers: Personal Real Estate
One of the most often overlooked stats - the Price/Rent ratio - is still pretty close to its all time high (see link to graph). And typically what this means is that either prices need to decrease further OR rental rates need to increase substantially, to be closer to equilibrium. Which do you think will happen? Graph: http://tinyurl.com/5am9fb

What do you think? I still stand by my thought that at least here in NW Indiana we will see rents begin to creep up and make the purchase of multi-family a great buy.

National Association of Realtors

Released data today suggesting that the mortgage market is still holding home sales back, with drops year over year still very signifigant.

They also projected a 2.4% drop in real estate prices nationally.

Remember that this is a national statistic, and that Northwest Indiana has not seen price reductions, merely a reduction in volume of sales.