Paula Henry

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Indianapolis Real Estate at the Bottom of the List

July 21st, 2008 categories: Indianapolis Real Estate News, Indy Home Buyers, Indy Market Trends

Home buyers seem to be concerned about the future value of the home they buy today. And, rightfully so! The national media makes it sound like all real estate markets are in deep trouble. Not the case; all real estate is local. If you are in the market to buy a home in Indianapolis, you will love the latest news from PMI Group.

PMI Mortgage Insurance Company recently released it’s Market Risk Index of the 50 largest Metropolitan Statistical Areas (MSA). These are the people who insure residential mortgage loans.

In plain english, the company rates major cities for the risk of property values being less in two years than they are today. At the bottom of the list is Indianapolis-Carmel. They rate the entire area of Metropolitan Indianapolis. In this case, it’s a good thing to be at the bottom.

The Indianapolis-Carmel area has less than 1% chance of property values declining in two years.

This is the list of cities who rank at the bottom.

  • Milwaukee-Waukesha-West Allis, Wisconsin
  • Cleveland-Elyria-Mentor, Ohio
  • Austin-Round Rock, Texas
  • Denver-Aurora, Colorado
  • Charlotte-Gastonia-Concord, North Carolina-South Carolina
  • Kansas City, Missouri-Kansas
  • Columbus, Ohio
  • Cincinnati-Middletown, Ohio-Kentucky-Indiana
  • Indianapolis-Carmel, Indiana
  • San Antonio, Texas
  • Houston-Sugar Land-Baytown, Texas
  • Pittsburgh, Pennsylvania
  • Dallas-Plano-Irving, Texas
  • Fort Worth-Arlington, Texas

To read the full report, click here.

Related Posts:

Indianapolis Real Estate Due to Bounce Back

Compare Real Estate Markets in the US

Indianapolis Ranked 6th Best Bargain Market

 

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Authored by Paula | Discussion: 4 Comments »

FHA Mandatory Loan Fees Increase For Some, Fall For Others

July 18th, 2008 categories: Indianapolis Real Estate News, Indy Home Buyers, Real Estate Financing

The FHA risk-based pricing matrix

For the first time in its history, the FHA changed its funding fees and mortgage insurance structure this week.  FHA-insured home loans are now subject to a risk-based pricing adjustment, as shown by the table above. 

Because of risk-based pricing, FHA home loans are now more expensive for borrowers with less-than-ideal credit profiles, and less expensive borrowers with perfect ones.

Prior to the changes, most FHA borrowers paid an up-front fee of 1.500 percent, plus on-going annual mortgage insurance payments equal to one-half-percent on the amount borrowed.

FHA-insured mortgages have grown in popularity this year because, while the guidelines of other mortgage products have tightened, FHA program guidelines have remained loose.  FHA allows 3 percent downpayments on purchases, for example, and allows “cash out” refinances to 95 percent.

Fannie Mae and Freddie Mac do not.

(Image courtesy: FHA.gov)

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Indianapolis Home Buyers - Consider Supply and Demand Before Making an Offer

July 7th, 2008 categories: Indianapolis Real Estate News, Indy Home Buyers, Indy Market Trends

Home price reductions are a functions of economics and not always a problem with the home

Many home buyers today believe they can should automatically offer a reduced price if a home has been on the market for awhile. Another fallacy is there must be something wrong with a home if the price has been reduced.

Don’t mistake the reduction of a home’s listed price as a signal that something is wrong with the home, or that a price reduction is automatically in order when you decide to make an offer.

In many neighborhoods around Indianapolis – the supply of homes for sale has outpaced the demand for homes.  When supply exceeds demand, there is a downward pressure on price until a balance point is reached. 

During the recent boom in real estate, this economic equation was reversed, creating upward pressure on prices. Nationally, some areas have seen over a 20% reduction in price since 2005. Here in Indianapolis, our average price reduction is about 2.6%. Of course some areas have seen more, some less. It really depends on the neighborhood, area of town and the home.

Supply and demand in today’s market can be illustrated by a seller listing their home at a price and finding few potential buyers.  When the price drops, however, more buyers suddenly show interest in the home. 

Further price reductions, of course, bring even more interested buyers until a deal is made and the home goes under contract.

When supply exceeds demand over a long period of time, prices tend to drop and that is why a market like this one is called a “Buyer’s Market”. There are areas in Indianapolis which are creeping close to being a nuetral market, favoring neither the buyer or the seller. 

Price reductions don’t signal problems with a home, but merely that it was priced too high to find a buyer given the current market’s supply and demand. When you find a home you want to make an offer on, take all factors into consideration before deciding you want to make a “low-ball” offer. There could very well be another buyer right behind you who understands the market and value of the home.

(Image courtesy: Biocrawler)

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Authored by Paula | Discussion: 3 Comments »

Indiana Residential Real Estate Sales Disclosure

July 2nd, 2008 categories: Indianapolis Real Estate News, Indy Home Buyers, Indy Home Sellers

The Residential Real Estate Sales Disclosure Law (I.C.32–21–5) requires sellers of 1–4 unit residential property to give a disclosure form to buyers.  The disclosure form is a two page document which details items of importance to buyers, the condition of items and whether or not they are included with the property.

Items of importance on the sellers disclosure include:

  • Appliances
  • Electrical System
  • Water and Sewer System
  • Heating and Cooling System
  • Roof
  • Known Hazardous Conditions

Hazardous conditions include knowledge of radon, mold, methane gas, radioactive material, lead based paint, toxic materials, asbestos insulation, biological contaminants, etc.

Also included is a long list of other disclosures a buyer should be made aware of. This section deals mostly with the land, improvements and external conditions affecting the property, including, but not limited to:

  • Any foundation problems?
  • Encroachment and easements?
  • Structural Problems?
  • Additions or Alterations made without a permit?
  • Moisture or water problems?
  • Property in flood plain?
  • Any threatened or pending litigation?
  • Underground Storage Tanks?
  • Property located within one mile of airport?
  • Damage from wind, flood, rodents, termites?
  • Is the property subject to covenants, conditions and restrictions?

Indiana law requires the sales disclosure be provided to the buyer before a contract is written.

There is a lot of information to be provided in the Residential Real Estate Sales Disclosure, which should be read, understood and questioned. However, it is never a replacement for an independent professional inspection of the property.

Sample Indiana Real Estate Sales Disclosure

There are properties which are exempt from providing a real estate disclosure in Indiana.

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Authored by Paula | Discussion: No Comments »

Indiana Housing Interest Rate Change

July 1st, 2008 categories: Indianapolis Real Estate News, Indy Home Buyers

Today is July 1, 2008 and the interest rate on Indiana Housing loans goes up. This is twice in the last month. Effective today, the rate for a loan form Indiana Housing is 6.125%.

Buyers can still complete the online course and receive a .125% discount on the interest rate.

The Indiana Housing program is great for first time home buyers. Check here for more information about Indiana Housing guidelines.

Authored by Paula | Discussion: No Comments »

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