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Steve Slavin - iMuncie.com

Muncie Real Estate

Steve Slavin (765) 289-2228 [Office]
(317) 701-5006 [Cell]
- Feel free to text me too for quick info -

2020: 5 Simple Graphs Proving This Is NOT Like the Last Time

March 21, 2020 by STSlavin Leave a Comment

March 2020.

Are We Going To See Another Housing Crash?

In times like these you need a voice of reason and the last thing we need to do is panic. The graphs below will help you better understand our current real estate market and how it is much different this time in comparison to the housing crash we endured back in 2006-2008. It is an Apples to Oranges comparison.

With all of the volatility in the stock market and uncertainty about the Coronavirus (COVID-19), some are concerned we may be headed for another housing crash like the one we experienced from 2006-2008. The feeling is understandable. Ali Wolf, Director of Economic Research at the real estate consulting firm Meyers Research, addressed this point in a recent interview:

With people having PTSD from the last time, they are still afraid of buying at the wrong time.

There are many reasons, however, indicating this real estate market is nothing like 2008. Here are five visuals to show the dramatic differences.

1. Mortgage standards are nothing like they were back then.

During the housing bubble, it was difficult NOT to get a mortgage. Today, it is tough to qualify. The Mortgage Bankers Association releases a Mortgage Credit Availability Index which is a summary measure which indicates the availability of mortgage credit at a point in time. The higher the index, the easier it is to get a mortgage. As shown below, during the housing bubble, the index skyrocketed. Currently, the index shows how getting a mortgage is even more difficult than it was before the bubble.

 

 

2. Prices are not soaring out of control.

Below is a graph showing annual house appreciation over the past six years, compared to the six years leading up to the height of the housing bubble. Though price appreciation has been quite strong recently, it is nowhere near the rise in prices that preceded the crash.

There is a stark difference between these two periods of time. Normal appreciation is 3.6%, so while current appreciation is higher than the historic norm, it is certainly not accelerating beyond control as it did in the early 2000s.

3. We do not have a surplus of homes on the market. We have a shortage.

The months supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued appreciation. As the next graph shows, there were too many homes for sale in 2007, and that caused prices to tumble. Today, there is a shortage of inventory which is causing an acceleration in home values.

 

 

4. Houses became too expensive to buy.

The affordability formula has three components: the price of the home, the wages earned by the purchaser, and the mortgage rate available at the time. Fourteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased and the mortgage rate is about 3.5%. That means the average family pays less of their monthly income toward their mortgage payment than they did back then. Here is a graph showing that difference:

 

5. People are equity rich, not tapped out.

In the run-up to the housing bubble, homeowners were using their homes as a personal ATM machine. Many immediately withdrew their equity once it built up, and they learned their lesson in the process. Prices have risen nicely over the last few years, leading to over fifty percent of homes in the country having greater than 50% equity. But owners have not been tapping into it like the last time. Here is a table comparing the equity withdrawal over the last three years compared to 2005, 2006, and 2007. Homeowners have cashed out over $500 billion dollars less than before:

 

The good news is, home values actually increased in 3 of the last 5 U.S. recessions and decreased by less than 2% in the 4th.

 

During the crash, home values began to fall, and sellers found themselves in a negative equity situation (where the amount of the mortgage they owned was greater than the value of their home). Some decided to walk away from their homes, and that led to a rash of distressed property listings (foreclosures and short sales), which sold at huge discounts, thus lowering the value of other homes in the area. That can’t happen today.

Bottom Line

If you’re concerned we’re making the same mistakes that led to the housing crash, take a look at the charts and graphs above to help alleviate your fears.

 

 

 

Filed Under: FinancingNews, MarketUpdate

Impact of the Coronavirus on the U.S. Housing Market

March 21, 2020 by STSlavin Leave a Comment

The Coronavirus (COVID-19) has caused massive global uncertainty, including a U.S. stock market correction no one could have seen coming. While much of the news has been about the effect on various markets, let’s also acknowledge the true impact it continues to have on lives and families around the world.

With all this uncertainty, how do you make powerful and confident decisions in regard to your real estate plans?

The National Association of Realtors (NAR) anticipates:

“At the very least, the coronavirus could cause some people to put home sales on hold.”

While this is an understandable approach, it is important to balance that with how it may end up costing you in the long run. If you’re considering buying or selling a home, it is key to educate yourself so that you can take thoughtful and intentional next steps for your future.

For example, when there’s fear in the world, we see lower mortgage interest rates as investors flee stocks for the safety of U.S. bonds. This connection should be considered when making real estate decisions.

According to the National Association of Home Builders (NAHB):

“The Fed’s action was expected but perhaps not to this degree and timing. And the policy change was consistent with recent declines for interest rates in the bond market. These declines should push mortgage interest rates closer to a low 3% average for the 30-year fixed rate mortgage.”

This is exactly what we’re experiencing right now as mortgage interest rates hover at the lowest levels in the history of the housing market.

Bottom Line

The full impact of the Coronavirus is still not yet known. It is in times like these that working with an informed and educated real estate professional can make all the difference in the world.  I’m here to help! — Steve

Filed Under: FinancingNews, MarketUpdate

2018 Market Summary

February 17, 2019 by STSlavin Leave a Comment

Just filling in some gaps of data… this was a blog I wrote after 2018 concluded!

2018 Market Insights by Steve Slavin

March 1, 2018 by STSlavin Leave a Comment

2018 Market Insights by Steve Slavin REALTOR COLDWELL BANKER LUNSFORD

2017 is behind us and I’m pleased to report it was a good year for Mid-East Central Indiana real estate activity.   I wanted to provide you a quick summary of the local and national real estate market and give you an idea of what could be coming for 2018.  Here goes!   

According to the National Association of Realtors® (NAR), Existing-home sales surged for the third straight month in November and reached their strongest pace in almost 11 years.  Their report gets into a lot of details… details you likely don’t care about in this type of update.  If you’d like to know all the details go to this website:  https://www.nar.realtor/existing-home-sales.  The national summary is that sales jumped 5.6 percent and are at their strongest pace since December 2006 (6.42 million homes).

No getting around it, those are good national numbers and set a great tone for what we might expect in Indiana.  That said, any experienced Broker will tell you there’s no such thing as a national real estate market.  Real estate is local.  Activity that happens in Delaware County isn’t the same as Carmel, Ft Wayne, or even small communities like Gaston. What most look at nationally are things like the booming stock market and continuous job gains that fuel substantial demand for buying.  Let’s face it, confidence is higher about the future profitability of company growth.  These companies in turn move people to our community and unfortunately move them out, but this gives us new inventory to sell. 

Ahhh… inventory.  That’s the condition that grabs my attention locally.  Regardless of price, we have so little inventory.  This is not a problem unique to our area, it’s a statewide and nationwide issue.  We need more homes on the market and Buyer’s can’t find homes to buy.  I’m going to bore you with some quick statistics:  As of 2/25/2018, there are only 305 homes on the market in all of Delaware County.  In the summer we might hit 600 homes on the market.  7-8 years ago in January this was closer to 500 homes on the market and closer to 800+ available in the summer.  We’ve seen this trend of less inventory for 8 or more years.   Fortunately, Delaware County’s new listings were up about 2.9% from December of 2016 to 2017, but the actual closed sales were down 8.5%.  The state’s closed sales were down 6.5% for 2017.  In fact, if you look at data over the last 3 years, Indiana’s active listings were down 25% since 2015 and Delaware Co’s listings were down 30% over the same period.  Average sale price in Delaware Co is around $105,800 (median prices were up).   Sellers are getting about 95.6% of list price.    I have a full presentation on all on this data if your group or organization would like an update.         

As usual, Supply and Demand is at work.  Whenever there is a limited supply of an item that is in high demand, prices increase.  Many economists say a healthy supply of homes is about 6 months or less of inventory.  Right now our median days on the market for Indiana is 34 days and in Delaware County average is about 62 days!  Yes, you read that right… selling your home can happen quickly.

Year after year markets will ebb and flow, but I’m seeing our local leaders invest long term in Muncie’s future success.  I’m excited about the positive changes I’ve seen.  I’m born and raised in Muncie and I can’t believe how much has changed since my childhood in the 70’s.   Here’s some of the recent highlights:

  •   Ball State has an even better reputation for higher education and is ready for a new level of achievement again under President Mearn’s new leadership. 
  •   Our local city schools are finally turning around academically and financially and Ball State may play a future in this success story too.  Reports suggest the State House and Senate should pass this Bill.
  •   Ivy Tech, our local community college, continues to add students, expand facilities (amazing improvements and a new Buiding are coming downtown), and generally improve statewide. 
  •   United Way’s $1.4M Campaign was a huge success and turned this important giving around.  Our community is incredibly generous!
  •   Local banks like MutualBank and First Merchants are growing, paying more, and being recognized as leaders in their fields. 
  •   New restaurants are coming back to Muncie (Elm St, 3 Wise Men, Twin Archer, McCallister’s, the new Pete’s Duck Inn, Geno’s, newer fast food restaurants, etc.)
  •   Yorktown’s downtown will see new life with development in 2018 (City Hall starts in March).
  •   New Home Builders are coming to town and building more than years past.   New developments are in the works.
  •   The Chamber’s Vision 2021 Economic Development Plan is in place.
  • Our local Medical industry is thriving and IU Health Hospital & Meridian continue to be recognized for their amazing care of patients. 
  • New Commercial Developments and businesses are coming (like the Pure Energy Park, Industrial Centre, MadJax, Crew Carwash, Retail Developments, Medical Office Buildings, and others),
  • Local employers are expanding and hiring again.
  • New supermarkets have come to town (Payless and Fresh Thyme), and more!

Here’s the bottomline:   

1) There’s a lot to be excited about with the future growth of our local community, 

2) If buyer demand outpaces the current supply of existing homes for sale, prices will continue to appreciate, and

3) If you’re looking to sell your home, now is a great time to do it.  I can obviously help.  Just give me a call!

I’m hopeful for another good, stable year and I can’t wait to serve past clients and make new ones in 2018! 

— Steve Slavin

Filed Under: FinancingNews, MarketUpdate

Interesting 2019 Real Estate Forecast

February 17, 2019 by STSlavin Leave a Comment

As I’m rebuilding some of my previous blog posts (yep, I lost 11 yrs or them) I thought this was interesting when it was posted in JAN of 2019

https://www.businessinsider.com/falling-home-sales-could-signal-us-recession-2019-1

– Steve

Filed Under: FinancingNews, MarketUpdate

New FHA Loan Limits for 2019!

January 26, 2019 by STSlavin Leave a Comment

The Federal Housing Administration (FHA) has announced new loan limits for 2019! The new limits reflect the increase in home prices across the country and apply to loans assigned on or after January 1, 2019. This increase opens up homeownership opportunities to more Americans. Why Are Loan Limits Increasing? Housing prices are on the rise, […]

The post New FHA Loan Limits for 2019! appeared first on Steve Slavin — iMuncie.com.

Filed Under: FinancingNews

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Steve Is A Lifelong Muncie Resident and was the #1 Producing Agent in East Central Indiana in 2013-2021. Best In Class Marketing, Negotiation, and buyer/seller presentation... Steve works late and drinks a lot of coffee! :) Feel to free to text me if that's easier.

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  • 400 H. High St, Suite 110
    Muncie, IN 47305
  • (765) 289-2228 [Office]
  • (317) 701-5006 [Cell]
  • steveslavin@coldwellhomes.com
- Feel free to text me too for quick info -

Specialty Markets

Steve specializes in the surrounding 5 county areas which include the Muncie, Yorktown, Daleville, Albany, New Castle communities… and many areas in-between and beyond. I’d be happy to help!

Coldwell Banker Real Estate Group

As the premiere Muncie, Indiana real estate company, Coldwell Banker Real Estate Group’s extensive marketing area covers much of central Indiana including Delaware, Randolph, Henry, Blackford and surrounding counties. Whether you’re looking for homes for sale in Muncie or searching for the ideal place to locate your business, let Coldwell Banker’s team of professionals assist you with all of your real estate needs.

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© 2014 Coldwell Banker Real Estate Corporation. Coldwell Banker® is a licensed trademark of Coldwell Banker Real Estate Corporation. An Equal Opportunity Company. Equal Housing Opportunity. Each Office Is Independently Owned and Operated. Privacy Policy and Terms and Conditions of Use. Coldwell Banker The Real Estate Group is a real estate brokerage licensed in the state of Indiana.