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November 17, 2008

Real estate professionals say now is time to get a home in TH

By Arthur Foulkes

TERRE HAUTE — It may be tougher to get a loan, but now is a great time to buy a home in Terre Haute, according to local real estate professionals.

Around 100 people gathered Monday night for a public forum sponsored by the Terre Haute Area Association of Realtors at the Idle Creek banquet center.

While home prices have plunged as much as 40 percent on America’s coasts, prices have been far more stable in the Wabash Valley, forum participants said.

The average sale price of a Vigo County home hit an all-time high in April 2007 at more than $102,000, said Brian Conley of Conley Real Estate Appraisals in Terre Haute. Today’s average sale price is just more than $94,000 – a drop of just 8 percent, he said. The average sale price in 2000 was around $83,000, Conley said.

In the largest U.S. metropolitan areas, home prices experienced much greater swings than in the Wabash Valley market, Conley said. “We don’t see the high highs or the low lows,” he said.

Based on recent sales activity, Vigo County has a more than nine-month supply of homes for sale, Conley said, adding that anything greater than a six-month supply is considered a “buyers market.”

Despite the buyers market, you can sell a home today if it is priced right, said Troy Helman, a Realtor with Coldwell Banker Larry Helman in Terre Haute. It is important not to price your home too high when you first offer it for sale because the first four weeks a home is on the market is when it generates the most interest, Helman said.

“You can sell a home in today’s market,” Helman said, adding it is important to take emotions out of the process of setting an asking price.

When home prices hit their high in Vigo County, homes were selling for about 12 percent less than their asking prices, Conley said. Today, asking prices are averaging around 30 percent greater than final sale prices, he said. “The moral of the story is if you want to sell your home, you have to price it properly,” Conley said.

With a higher than usual number of homes on the market, now is a good time to buy a home, said Bert Williams of Williams & Associates in Terre Haute.

“It’s a great time to buy,” he said. Interest rates – around 6 percent – are low and the market should eventually recover, he said. “In a couple of years you’re going to be fine.”

Home prices in Vigo County – especially homes selling for more than $200,000 – were driven higher beginning in late 2002 when Pfizer started bringing in employees for its Exubera manufacturing facility here, said Chip Miller with Prudential Newlin Johnson.

From 2002 to 2007, Pfizer brought as many as 500 people to Terre Haute, Miller said. Then, when Exubera production was shut down, many of those people moved from the area, he said. All this created a large supply of high-end homes with low demand, driving prices down, Miller said. “It comes back to supply and demand and pure economics,” he said.

As much as 40 percent of current market activity in homes priced above $200,000 can be attributed to Pfizer, Miller said.

Foreclosures are another big factor in today’s Terre Haute area real estate market, forum participants said. Up to 25 percent of the homes for sale today are repossessed homes, they said; however, most of these homes are priced below $50,000 so their effect is mostly being felt in the lower price end of the market, participants said.

Banks and other lenders are using somewhat higher standards in writing mortgages today than a year or two ago, but loans are still available, forum participants noted.

“We’re all extremely busy right now,” said Ted Kraly of Old National Bank.

Credit scores have become a big factor in determining who can receive loans and the terms of those loans, said Phyllis Herb of First Financial Bank. It is also less common today for lenders to make loans with 100 percent financing, she said.

“It’s really back to the way it was 10 or 15 years ago,” said Jim Cheek with Wells Fargo Home Mortgage.

To sell a home quickly, price it correctly by asking a real estate professional to show you other homes in the price range you are considering, Williams said. Also, make sure the home is well maintained, avoid pet odors and try and make the house stand out in buyers’ minds, Helman added.

There are 86 homes sold each month in Vigo County, Conley said. That’s almost three closings per day, he said.

“It was a good meeting,” said Richard Nicoson of Terre Haute, who is trying to sell his home in the Collett Park neighborhood. Anyone buying or selling a home would have gotten very good information from the forum, he said.

Nicoson and his wife, Barbara, have had their home on the market for eight months and had three offers, he said. Still, the right buyer has yet to come along, he said.

“Everything [forum participants] said, we’ve been going through,” Nicoson said after the 90-minute forum, adding the meeting gave him some reassuring information. “I know there is a buyer out there.”

Arthur Foulkes can be reached at (812) 231-4232 or arthur.foulkes@tribstar.com.

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