An annual “state of real estate” report was released today that brushes a sheen of optimism on the office, industrial and retail markets.

After commercial real estate markets tanked in 2009, they partially bounced back last year and stand to strengthen even more this year if hiring and consumer spending grow, says the report released by the largest commercial brokerage in Indianapolis.

An overview:

» Office market: The metro area’s vacancy rate hit an all-time high of 21.6 percent in the second quarter, and construction of new office buildings is the slowest since the early 1990s. But landlords leased 230,000 square feet of office space in the fourth quarter, the equivalent of four football fields. The market should see stabilized rents and more deal-making in 2011, as long as the job market doesn’t weaken, said Mary Beth Kohart.

» Industrial market: Net leasing of distribution and other industrial space last year was the highest among all major Midwestern cities, including Chicago. Area business parks are home to many of the nation’s largest logistics companies, taking advantage of the city’s central location for shipping efficiencies. One concern this year: 4.8 million square feet of vacated industrial space will hit the market in the form of the soon-to-be-closed GM Stamping and Visteon auto parts plants and the loss of a major tenant in the Western Select center on the Eastside, said Fritz Kauffman.

» Retail market: The metro area hasn’t seen a new shopping center built since 2008, but next year will bring the redevelopment and expansion of River’s Edge retail center in Castleton, with a Nordstrom Rack off-price store as a major tenant. And there are “stirrings” of other new retail developments in established shopping areas, said Bill French.

» Investment market: Sales of commercial properties to investors picked up as 2010 wore on. This year could see a jump in sales of foreclosed and other distressed properties, as banks and other lenders unload properties with defaulted loans, said Angela Wethington.

Source: IndyStar

But you’ll need to examine what caused you to fall behind on your mortgage and take steps to fix the problem. “You have to look at what were the reasons you didn’t make the payment,” said Davis-Demas. “Was it budgeting? You can modify that type of behavior.”

A foreclosure is a major hit to your credit history and stays on your credit report for seven years.

So, after a foreclosure, your priority has to be rebuilding your credit. You’ll have some time to do so, because mortgage giants Fannie Mae and Freddie Mac impose strict rules on how long it will take before you’re eligible for another mortgage, as well as strict rules on the credit score and the size of the down payment required of borrowers with a prior foreclosure.

Here’s what you need to do to rebuild your credit to qualify again for a mortgage:

Pay your bills on time: The FICO score, the dominant credit score used by lenders, gives the greatest weight to payment history, so make sure you consistently pay your bills on time. “Stability is the key,” said Craig Jarrell, president of the Dallas region of IberiaBank Mortgage Co. “Have you demonstrated that you are now capable of owning a home and paying the bills, and have recovered from whatever circumstance caused the original foreclosure?”

Review your credit report: You’re entitled to a free credit report once every 12 months from each of the three national credit bureaus—Experian, TransUnion and Equifax. You should get a copy and check it for any inaccuracies.
To get your free credit report, go to http://www.annualcreditreport.com. “Make sure it is about you and only you,” said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. “If you find errors, dispute them. If you discover old debts, it will weigh in your favor to satisfy them. Paid late looks better than not paid at all. Make sure that debts older than seven years have rotated off your report, as these could be dragging your score down unnecessarily.”

Check your mortgage: You want to be sure that you don’t still owe anything on your old mortgage. Sometimes proceeds from a foreclosure sale aren’t enough to cover what’s owed on the mortgage, which would leave you owing the difference.
“Make sure there is a zero balance reflected, and if you are responsible for a shortfall, make arrangements to repay the remaining balance,” Cunningham said.
Many lenders are willing to settle that “deficiency judgment” for less than what’s owed because “it’s better than getting no money at all,” Jarrell said.

Apply for credit: In particular, apply for different varieties of credit. “Credit scoring models value having different types of credit,” Cunningham said. “Having some revolving accounts, typically credit cards, and some installment fixed-payment loans, such as a car payment, can improve your score.” But don’t apply for too much credit at once. “This can appear as though you’re desperate for credit and perhaps make lenders less inclined to extend credit to you,” Cunningham said. “Further, too many credit inquiries can have a negative impact on your credit score.”

Don’t fall prey: Watch out for credit repair companies that promise to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job—after paying a fee for the service. “The truth is, that no one can remove accurate, negative information from your credit report,” according to the Federal Trade Commission. “It’s illegal.” Only the passage of time can assure that negative, but accurate, information on your credit report will be removed.
When it comes to repairing your credit, there are no quick fixes, the experts say. What lenders want to see is responsible financial behavior over time.

“Know that time is your friend, as the farther you move away from the financial distress, the less negative impact it has,” Cunningham said. “Follow with responsible behavior with your new credit, and you’ll soon have a solid credit file.”

Source: Pamela Yip, (c) 2010, The Dallas Morning News.
RISMEDIA 2010—Distributed by McClatchy-Tribune Information Services.

The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in eight years of sampling, with 70 percent of Americans saying that job layoffs and unemployment are a big problem in their area; eight in 10 cite these issues as a barrier to homeownership. The telephone survey of 1,209 urban and suburban adults in the top 25 metropolitan statistical areas was conducted for NAR by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program.

Some key results:

* Americans continue to believe that buying a home is a good financial decision (77 percent believe strongly or not so strongly, 68 percent strongly so).
* More than two-thirds of respondents (68 percent) say that now is a good time to buy a home.
* Job insecurity and the lack of jobs continue to be the primary obstacleto home ownership and market recovery.
* Respondents see the recession and job losses as the main reasons for the foreclosure problem, a shift from last year when they were more likely to blame homeowners who bought homes they could not afford.
* A majority of renters say that owning a home at some point in the future is either one of their highest priorities (39 percent) or a moderate priority (24 percent). Just 21 percent of renters say that owning a home is not a priority at all.
* Frustration with banks is up: now a majority worry that banks have made it too hard to qualify for a home mortgage loan.
* 51 percent of respondents say foreclosures remain a big or moderate problem in their area. While there has been a significant drop in the percentage of those surveyed who say foreclosures have increased, 51 percent say that the rate of foreclosures is about the same as it was last year.
* Most of those surveyed say that it is harder to sell a home in their neighborhood than it was a year ago.
* Looking forward, 70 percent expect real estate sales in their neighborhood to remain about the same over the next few months. A nearly identical number (69 percent), also expect home values to remain the same.
* Nearly one-quarter (23 percent) are now very concerned about the number of homes and condos for sale in their area—a number that is up 7 points from last year.
* Most respondents are more concerned about the drop in home valuesthan they are about home costs being too high. Still, cost remains the significant barrier to many who would otherwise like to buy a home.

Source: RISMedia

Last October, first-time buyers were motivated to make offers before the initial contract deadline for the tax credit last November. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said excellent housing affordability conditions are drawing home buyers. “It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels. The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011,” he said.

“More importantly, a return to more normal loan underwriting standards and removal of unnecessary underwriting fees for very low risk borrowers is needed and could quickly help in the housing and economic recovery,” Yun said. Recent loan performance data from Fannie Mae and Freddie Mac clearly demonstrates very low default rates on recently originated mortgages, much lower than the vintages of 2002 and 2003 before the housing boom.

Near term, Yun expects home sales will continue to climb from their cyclical low this past summer. “Even so, we now have some consumer concerns regarding the mortgage interest deduction, an important component in housing affordability,” he said. “Preliminary results of a new survey show nearly three out of four homeowners and two out of three renters consider the mortgage interest deduction to be extremely or very important to them. Homeowners already pay between 80-90% of all federal income taxes and additional tax burden would hurt them and the economic recovery, so we have a reasonable hope that it will not be changed.”

Source: RISMEDIA, December 3, 2010

Despite the economy’s sluggish recovery, a new national survey from Weber Shandwick with KRC Research found that nearly seven in 10 Americans (69 percent) have an optimistic outlook about their household finances for the next two years. Nearly one quarter (23 percent) are very optimistic.

Since the downturn two years ago, the vast majority of Americans (81 percent) say they are more responsible with their household’s money today than two years ago, with nearly half (46 percent) considering themselves much more responsible. Many indicated they’ve changed their financial habits, including buying items on sale (80 percent), becoming more concerned about saving money (78 percent) and learning how to budget better (68 percent). In fact, Americans say they are more likely today to be “saving as much as possible” than before the financial downturn (42 percent vs. 33 percent, respectively).

Moreover, six in 10 report they are likely to continue the savings and spending patterns they started when the downturn began as soon as the economy recovers.

Women, on average, are more optimistic than men about their household financial future over the next two years (72 percent vs. 65 percent, respectively), more likely than men to have turned to family for help managing their finances over the past two years (59 percent vs. 50 percent), and more likely than men to feel in more control of their household’s financial destiny today compared to two years ago (35 percent vs. 27 percent).

Few Americans relied on the help of an expert over the last two years. The survey found that a small segment leaned more than usual on financial advisors (19 percent) or their banks (17 percent) to help manage their household budget or finances.

“On the second anniversary of the financial collapse, Americans have a mostly positive outlook on their financial futures although many report not feeling in control just yet. Interestingly, few have turned to professional resources for help. This begs the question of what can be done differently by financial institutions, advisors and others to effectively promote the resources available to empower Americans,” said Barbara Iverson, president of Weber Shandwick’s Financial Services practice group.

Source: RISMedia

Below are five overlooked reasons why now is a great time to buy a house.

1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today’s record-low rates, they start building equity as soon as they close. That means they have a little give to absorb a few ups and downs as the still-recovering housing market gains traction.

2. Houses are in move-in condition. Homeowners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. Homeowners who have been holding back kept their houses in good shape while they waited. As those houses enter the market, they are in marked contrast to tattered foreclosures.

3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system – and this is just the opportunity that owners of many desirable properties have been waiting for.

4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines…again. Now that appraisers have more flexibility to set values that reflect the current market, today’s deals will make it over the finish line.

5. Plenty of programs. Homes are more affordable than they have been for years, but communities have stuck by “workforce housing” programs that encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today’s low mortgage rates.

Source: RISMedia September 2010

Fannie Mae’s latest national housing survey finds that most Americans believe the housing market has reached bottom, but they are more cautious about owning a home. Respondents to the Fannie Mae National Housing Survey believe that home prices will hold steady (47 percent) or increase (31 percent) over the next year, and that rental prices will stay the same (46 percent) or go up (39 percent).

Seventy percent of Americans think it is a good time to buy a house, compared with 64 percent in a similar survey conducted in January 2010.

“Our survey shows that consumers see a mixed outlook for housing and homeownership,” said Doug Duncan, Vice President and Chief Economist, Fannie Mae. “These findings indicate a return to a more balanced and realistic approach toward housing. While this will likely weigh on the housing recovery in the near-term, it should, over time, help to build a stronger and healthier market focused on sustainable homeownership.”

“Although most Americans believe that home prices have bottomed, they are adopting a much more cautious approach toward buying,” Duncan continued. “Homeowners and renters alike continue to be wary of taking on risk.”

A majority of Americans (67 percent) continue to believe that housing is a safe investment. More than 70 percent of all respondents believe it will be harder for the next generation to buy a home, up from the beginning of the year.

The Fannie Mae National Housing Survey polled homeowners and renters between June 2010 and July 2010. Findings were compared to a similar survey conducted by Fannie Mae from December 2009 to January 2010 and released in April 2010, and a similar survey conducted in 2003.

OVERVIEW OF KEY FINDINGS

Consumers More Confident That Housing Market Has Bottomed-
The survey revealed that Americans are feeling increasingly more confident that the housing market has hit bottom.

– A large majority of Americans (78 percent) believe that home prices either will remain flat or go up over the next year, up five points from the beginning of the year. Forty-seven percent believe prices will hold steady, while 31 percent think they will go up.

– Thirty-nine percent think rental prices will increase over the next 12 months, while 46 percent said they will stay the same.

– Consumers continue to believe it is a buyers’ market; 70 percent said it is a good time to buy a house, up six points from January. However, 83 percent believe it is a bad time to sell a house.

– A majority of Americans (67 percent) continue to believe that buying a home is a safe investment. Housing ranked second behind putting money into a savings or money market account (76 percent).

Views on Homeownership Diverge Among Subgroups
The survey also found that mortgage borrowers and underwater mortgage borrowers are less discouraged about homeownership, but delinquent borrowers and renters are growing more pessimistic.

– Mortgage borrowers (74 percent) and underwater borrowers (69 percent) are more likely to say owning a home is a safe investment than delinquent borrowers (57 percent) and renters (54 percent).

– Mortgage borrowers (83 percent) and underwater borrowers (77 percent) said they are more likely to buy in the future than rent — both groups increased two points from January.

Source: RISMEDIA, September 17, 2010

A distribution company plans to lease much of an empty warehouse in suburban Indianapolis and potentially hire 140 workers.

Illinois-based Caterpillar Logistics Services has told Greenwood officials that it plans to open the distribution center in December.

Company spokeswoman Linda Fairbanks told The Daily Journal of Franklin that the exact number of jobs at the warehouse haven’t been finalized.

The company is a division of construction equipment maker Caterpillar Inc., which has a factory in Franklin and a warehouse in Greenwood. Johnson County Economic Development Corp. President Cheryl Morphew said the new warehouse is unrelated to those facilities.

Morphew says Caterpillar Logistics will lease at least half of a 668,000-square-foot warehouse that has been empty since it was built four years ago.

Caterpillar plans to hire mostly warehouse workers at an average wage of $13 an hour, not including benefits, Morphew said.

Source: Indianapolis Business Journal
Submitted by: Sara Laycock

When you’re ready, a local Indianapolis area real estate agent, can help you find the home that’s right for you. REALTORS are prepared—to answer your questions, show you options and guide you home.

Get Educated. A little mortgage know-how goes a long way toward ensuring you get an affordable mortgage. Get educated on the loan process and key factors that make a loan affordable. You’ll want to know about loan types – fixed-rate mortgages, adjustable-rate mortgages, FHA and VA loans – and the full range of line items that contribute to the total cost of securing the loan, including discount points, appraisals, and real estate agent commissions. Ask your real estate agent for suggestions if you do not have a loan specialist with whom to speak.

Get Your Finances in Order. Given today’s stronger lending guidelines, it’s more important than ever to get your finances in order. First, get a copy of your credit report, which usually includes your credit score. If your credit score is low (anything below 620), take the time to improve it. If you find errors on the report, take the time to correct them. This may put your home buying plans on hold (creditors typically look for a two-year history of consistent, on-time bill payment to establish good credit), but it could result in a better loan and more affordable rates. Talk to your loan specialist to create a home buying game plan.

Establish a Budget. Before you start searching for your home, make sure you know how much home you can afford. Lenders will evaluate all your debts and take into account your full financial situation when qualifying you for a mortgage. A key factor is how much income you bring in versus how much you will pay out each month.

Here’s a good guideline to check where you are:
–Your housing expense (the mortgage payments on the house you are buying) should generally not exceed 28 to 33 percent of your total monthly gross income.
–All revolving debt (including car payments, credit cards payments, and your mortgage payment) should not exceed 36 to 40 percent of your total monthly gross income.

It’s always helpful to create a monthly budget, itemizing all your recurring expenses, including estimated maintenance costs, taxes, utility bills, and condo or homeowners’ association dues. Then, test your budget. If you can pay all these debts and continue to add to savings, you may be ready to buy a home.

Start Saving. Having savings in reserve helps ensure you can afford the upfront costs of homeownership.
Upfront costs of homeownership include:
Down Payment – Five to twenty percent of the purchase price. Keep in mind, a lower down payment means you’ll have to qualify for a higher loan amount and pay for mortgage insurance – adding to your monthly mortgage payment.
Deposit – Two percent of the purchase price, typically. Sometimes called earnest money, a deposit shows the seller you’re serious about buying the home. If your offer is accepted, the deposit or earnest money will be applied towards the down payment. If your offer is rejected, the down payment will be returned to you.
Closing Costs – Three to five percent of the purchase price, on average. These costs include all fees required to execute the sale, including attorney fees, title insurance, appraisals, and points.

Get Pre-Approved. In today’s competitive market, home buyers should get pre-approved for a mortgage before they begin their house hunt

To be pre-approved for a loan, your lender will gather information about your job, assets, income, and debts and then determine how much financing you’re qualified to receive. If you are pre-approved, you will receive a pre-approval letter from the lender. When you’re ready to make an offer on a home, this pre-approval letter will tell the seller you’re a serious and qualified buyer. It will also give you an edge over competing buyers who are not pre-approved.

Keep in mind, pre-qualification doesn’t mean you have an approved loan. You’ll still need to apply for a loan if your offer is accepted.

Source: Fannie Mae