Predictions for 2009?

December 3, 2008
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It has been a rough year for most in the real estate business. Home sales dropped precipitously, financing dried up and major projects hit the brakes. Will the carnage continue in 2009? Share your predictions. Blog host Cory Schouten is on vacation and will return Dec. 8 with new updates. Have a great week.
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  • thundermuttDecember 3, 2008 12:54 PM
    Yes, it will continue well into the first half of 2009, maybe until the whole financial system (and consumers) de-leverage.

    The lasting impact? Banks and investors will want to see real cash into deals just like after the S&L debacle (for those old enough to remember).
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  • ShaneDecember 3, 2008 1:47 PM
    From what I've read it will last through the first quarter or two of next year and then the recovery will be extremely slow. In the long run the housing slowdown in the Indianapolis metro area is a good thing. The amount cheap homes built in the surrounding communities was truly unsustainable. Once the economy comes back though, I'm sure it will continue.
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  • downtownerDecember 3, 2008 2:38 PM
    I get real tired of people like Shane talking down to everyone that doesnt live in a $250,000 house. People live in these houses that you are constantly degrading. These people are proud of their homes and dont need people like you talking down to you. Some of these people that live in these houses are the people that are fiscally responsible enough to want to live in a house that they have actually paid for, or can afford. Some of these people would rather live in a modest house, that is their home, and save their money for their kid's education. You Shane need to thank some of these people for being responsible and appologize to these people for your ignorant statement.
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  • thundermuttDecember 3, 2008 3:03 PM
    downtowner, there is a significant difference between cheap homes and inexpensive homes, and some of those suburban tract homes really are cheap and not durable.

    I live in a home in Center Township which has a full basement, hardwood floors, plaster walls, and wood windows with storms. As best I can tell, the only plywood is in the flooring underlayment and kitchen cabinets. It was inexpensive, but not cheap.
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  • ShaneDecember 3, 2008 3:13 PM
    Thank you Thundermutt.........

    Indianapolis has a lot of pre WWII homes that are not built cheaply that could easily be remodeled and made new. The problem with most new construction is that it isn't built to last........throw away homes if you will. Then you have communities that suffer from this poor construction later on.........Speedway is a great example of having a glut of cheaply made homes from 40+ years ago that now look horrible and are difficult to renovate.
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  • SteveDecember 3, 2008 4:11 PM
    Well, according to Jim (Cramer) he predicted that US Housing market will bottomed up in the middle of 2009. I don't know if it will happen as early as that but great if it will. It all goes back to this so called 'recession' and how our new president and congress will address this crisis, bring back credit to the market and restore consumer (us) confidence.

    But before then, there will be a lot more store closings, layoffs, and low consumer spending. Check out this list of stores closures (compiled from many sources).
    http://www.snopes.com/politics/business/storeclosings.asp
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  • Jimmy ChitwoodDecember 3, 2008 4:30 PM
    Steve, the site you listed actually refutes these e-mail. That's what Snopes is. Sure there will be closings, and some of what is on that is accurate, but I can guarantee that a lot of it is fear mongering (i.e. mentioning Gap or Zales closing stores, when they are opening as many as they are closing).

    On a positive note, Panera is finally confirmed downtown for Q2 2009.

    http://www.insideindianabusiness.com/newsitem.asp?ID=32826
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  • ShaneDecember 3, 2008 5:40 PM
    Yes I agree with JC........there is a lot of panic out there, and websites like that can make it worse........
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  • idyllic indyDecember 3, 2008 11:38 PM
    I think it's funny when people seem to confidently predict the future of our economy. Like as if anyone accurately predicted the timing of our recent economic history. Yes, a lot of people commented on the real estate bubble and predicted an imminent burst, but very few actually declined to purchase in the time leading up to the downfall. So, I don't have a prediction, but I could just be ignorant.

    Wait, I do have two predictions: Indy strip clubs will prosper and post an especially strong 2nd half of 2009. The faux boat in French Lick will continue to post diminishing returns.
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  • DanDecember 4, 2008 8:48 AM
    Is Panera locating where Old Navy used to be or will it be accesible from street level?

    The only prediction I have for 2009 is that the MSA site will still be the finest gravel parking lot this side of the Mississippi:)
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  • roberthDecember 4, 2008 1:02 PM
    The gravel parking lot is a disgrace and embarrassment to the city. No one else would have been allowed to keep this parking lot in this condition for 5 to 6 years besides the city. What hypocrites. It needs be brought up to the city's standards.
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  • Joe ShoemakerDecember 4, 2008 1:08 PM
    I cannot predict the future. Few of us can, even when citing data from otherwise reputable sources.

    I can, however, provide current market data. It's not particularly good for those trying to sell. It's terrific if you're considering a purchase.

    Inventories are up and overall demand is down. That puts downward pressure on prices. It's CLEARLY a Buyer's market. When combined with consistently low interest rates, this may be the best time to buy a home in 10+ years.

    Will prices continue to drop? Perhaps. There are dozens of factors that play into pricing, inventories, etc. I think it's likely that we'll see modest drops in pricing through the winter.

    That being said, I believe that there's an enormous amount of pent up demand. Hundreds - if not thousands - of families have delayed a purchase to watch the market. At the first sign of stability - probably about the time the tulips come up and sanity returns like Springtime - I think we'll see a surge of activity.

    When the market corrects itself - and NOBODY can predict when it'll correct - those who purchased at the bottom will see the biggest returns.
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  • Michael FirsichDecember 4, 2008 1:40 PM
    I know Joe and he certainly knows what he's talking about. Since no one can accurately predict the bottom of the market, this is a good time for first-time home buyers to purchase a home if they have cash for a down payment, access to acceptable financing, and income to qualify for a loan. My advice to new homeowners is to consult with a realtor like Joe and lock in a 30 year fixed mortgage that you can easily afford (on one income).
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  • GeorgeOrwellDecember 4, 2008 4:06 PM
    The Dow will bottom out at 4800, then slowly make a reasonable comeback. A long overdue 'protectionist' attitude will emerge re manufacturing and domestic production. The US and Great Britain gear their currencies to be 'absorbed' by a larger economic denominator (Euro or whatever). A 'peace for land' settlement will be realized. Predictably, this will prove to be disastrous. The new President and congress will successfully enact a national infrastructure rehab project that will provide, at least for a while, an economic and psychological boost to the country. 6% of you reading this won't be here on this date a year from now. 12/21/12.
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  • GeorgeOrwellDecember 4, 2008 4:17 PM
    I almost forgot. The MSA parking lot will still be a pathetically unused, non-revenue earning, flat, ugly pile of aggregate. Interested parties will still be 'planning' intra-commuter rail projects that will never develop. Alas! The surprise of the year will be a regularly scheduled, upgraded, inter-city rail system which will include us---Chicago, Cinci and the 'ville'. It will prove most successful. In addition, the RR rights bickering along the 'south shore line' will cease. Upgrades and and additional stops to nearby towns will develop. See, there's hope.
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  • DougDecember 4, 2008 4:34 PM
    It's ironic that the lack of savings that provided the increase in spending and credit is now a proposed solution for individuals needing to rebalance their financial affairs (save more!) yet, the economy is now in dire need of these very dollars as a part of it's solution. Obvioulsy, this is complicated in a way that few if any fully understand ( is anyone playing with a full set of cards?). When will we return to a reasonable relationship between productivity and compensation? We have been paying more in wages than the product can reasonably justify in terms of it's value. Housing will most likely readjust, it always does but over what period of time is difficult to predict. We are no longer a patient society and expect things to turn around as quicly as our computers can download the next best program. I think the discipline some are now calling for includes patience. A more steady and thoughtful recovery will have a durability greater than trying to fix everything as quickly as possible. Let's treat the problem not the symptom. On another aspect of this I am concerned now that as my house becomes less valued on the market and my property taxes grow the disconnect will create an additional burden.
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  • Da HooeyDecember 4, 2008 10:39 PM
    Joe Shoemaker: You are a genuis!
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  • DonnaDecember 4, 2008 11:30 PM
    GeorgeOrwell, an inter-city rail system would about make me wet my pants with joy. That's one prediction I'd like to see come true.

    My hope is that, as Joe predicts, things will stabilize and slowly turn upward in spring. But that's just my hope, based on nothing more than that's what I've been hearing most people say. My prediction: It's going to be a long hard (and flat broke) winter.
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  • AblerockDecember 5, 2008 10:26 AM
    Are you aware of the Downtown Indianapolis Streetcar Corp., Donna? They've got a pretty impressive Board of Directors. They've been fairly quiet recently, but I'm sure they're still working on making it happen. If we got a dense downtown streetcar network along with a regional light rail system, THAT would make me wet my pants. :-)

    http://indianapolisstreetcar.org/BoD.html
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  • cheap home ownerDecember 6, 2008 8:33 AM
    This last may when a tornado blew through the east side, alot of CHEAP homes withstood the wind. Regardless of peoples opinions on newer construction, it is built to last. The homes in center township do not have tornado straps every two feet around the base of the whole house holding it down. The reinforcing bars (shear beams) so to speak at the corners, better windows and infinately better insulation as well as materials. The only thing the older homes have that IS superior is the visual character and wood siding. Closets are SMALL SMALL SMALL as well as the overall size of most of the rooms. And the basements in older homes 1920's' 30's ect leak. Just the technology and abilities of the times. If people would replace the vinyl siding with hardyplank, concrete board, our cheap homes would be around for a long long time.
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  • Jon BDecember 7, 2008 11:20 AM
    I continue to watch the economic forecasts daily and reading through these posts it amazes me no one is addressing the real issue. Yes you are probably right that the market will rebound and things will turn around hopefully by Q3 of '09 if not a little earlier. BUT the system will still be broke and we will find our way back to this mess again. Did you know only 3% of american money actually exists in paper/coin form? That means that 97% of our money exists only electronically....
    If all the american consumers debt were combined there is not enough US currency in existence to pay all that debt off....


    It just amazes me and scares me at the same time, we are not addressing the issue all we seem to do is look for the easiest quickest fix, move on and let the next generation deal with the problem when it comes to them. Bailing out the Big 3 or these banks is NOT the answer, it teaches the market nothing and will not prevent this from happening again. Experience is the best teacher and like everything else the market will learn from experience and if the Big 3 and AIG etc. are allowed to fail the decision making that got them to this situation will not be made again. Allow the free market to work, government intervention is bad, our founding fathers have to be rolling around in their graves right now...

    Please people wake up, lets address the real issue not the BS that our media is brainwashing us with.
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  • thundermuttDecember 8, 2008 10:19 AM
    Jon B: that's why I said recovery would take until the system de-leverages.
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  • KathyDecember 9, 2008 2:12 PM
    I believe things will get better and we will all learn not to make the same mistakes we did in the past. If you want something save for it and stop using credit for every little thing. Live within your means. It's not rocket science.
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  • Jon BDecember 10, 2008 8:18 PM
    Our government is in debt over $70 TRILLION dollars, how do you expect the people not to have a credit problem when our government is like a 16 year old girl with a new credit card. I agree with you that credit use should be less but our economy would cease to exist without people using credit. Its a system that rewards spending and punishes saving. The government needs to set the example of fiscal responsibility before its citizens are going too. The government like I said is in crazy amounts of debt but due all governmnent workers will get a raise this year. My company is struggling as well, we arent getting raises this year instead; they are laying everyone off...

    Only the governmnet can operate en-efficiently and continue to stay in business.

    We can no longer sit around and let this go on...
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