HOUSING 

By Duncan 

A very pretty friend sends me the housing numbers for the Indianapolis market every month. I mean, I get everything. This “woman” was our Realtor when we bought this home in 2019 we are living in now. I guess I should give you her name, Susan Tibbs, F. C. Tucker and Company. 

Why say her name? Because a Realtor works the housing market by word of mouth. And yes, I recommend Susan Tibbs in a New York Minute. 

By the way, I capitalize the word “Realtor” because my mother (Lucy) worked at the Indianapolis Metropolitan Board of Realtors for thirty years and told me the word “Realtor” is always capitalized. 

She also told me to wear clean underwear in case I had an accident. 

Get to the point, Duncan. Okay, I’m doing what a lot of you are doing, watching prices on everything moving sky-high. When I was working in the mortgage lending game. And as I look back at my life, “It was a game.” The way we decided if we should lend money to someone buying a home was simple. 

If the buyer and the house were strong, lend the money. 

If the buyer is strong and the house is weak, we ask a lot of questions. 

If the buyer is weak, and the house is strong, we ask a lot of questions. 

If the house and the buyer are both weak, we wondered who the Realtor was that sent us this borrower. It was always hard to say, “No!” A word I don’t hear much of lately. 

I can’t get over the way that housing prices have risen, and continue to rise. 

If a mortgage payment is … let's say $1000.00 a month. Then, we multiplied the payment by four. As a lender, we expected the borrowers to have a stable monthly income of $4,000 and $48,000 a year. They are dedicating 25% or less of their stable monthly income to a mortgage payment. Which is and always has been considered acceptable. 

If you make $2,000.00 a month then 25% of the $2,000.00 stable monthly income equates to a $500.00 house payment. There is literally nothing out there for $500.00 a month. 

Yes, I use these numbers to make it simple. In today's market, I’m sure the mortgage loan industry and rental companies are pushing the numbers/ratios up more and more to get people in a home or an apartment.    

I noticed this home across the street from mine was for sale and had a buyer (I looked online, and the listing agent disclosed, “SOLD.”) Nothing much happened for a couple of months (No one moved in.) I assumed the buyer did not qualify for the financing. So I looked online again, and it was back on the market. This time, the $320,000.00 asking price was reduced to $310,000.00.  

The home (above) across the street from me just sold for $300,000 to a Realtor/Investor. That means we have a new rental in our neighborhood. I noticed the Realtor/Investor is asking $2,495.00 a month to rent this home. That means he needs a renter with a $ 120,000-a-year income to afford the rent. The home has been sitting vacant for a month after it closed. I can only assume the investor doesn’t have a renter with those qualifications. 

Can you imagine a 1,248-square-foot home with a rent of $2,495.00? It just blows my mind. 

In 1992-93-94, homes built in the Heritage Meadows subdivision were selling in the low mid-90s. And now, $300,000 is considered a fair asking price? 

I was talking to a gal-pal about the housing market in general, and she said her apartment rent had just raised $85.00 to $900.00 a month for a small one-bedroom apartment. I assume she is receiving Social Security. Let’s do some numbers; she has been in this apartment for a long time. She started out paying $600.00 a month. 

Assuming she lives on Social Security and receives (and I’m guessing here) $1,500 a month. An apartment rent of $600.00 is 40% of her income. 

Renting the apartment at $900.00 a month is 60% of her income. If you look around, finding affordable shelter is impossible.  

Of course, we must remember other obligations like a car payment or two, student loan obligations for some, and utilities and cable bills. We are in a very unusual housing market. 

My Gal-Pal, who is renting, is now trying to decide what she should do. One scenario is to move in with her children. But that would mean she gives up the luxury of having complete control over her life. And who doesn’t want to have control over their own life?   

People refer to buying a home as a “Deal.” A lot of Realtors I have interfaced with over the years say things like, “I just want to get this deal closed.” On the other hand, I have always preferred to call the purchase of a home a “transaction.” Call me “Old School.” 

One of the restrictions for this C. P. Morgan under-100 home subdivision is it will never have more than 25% of the homes as rentals. Well, we passed that threshold a long time ago.

After a little detective work, I found out that this investor who bought the home across the street owns several other homes in my subdivision and rents them. Now, he is doing it again. 

Life is a gamble. You buy a home with certain expectations. They tell me there are rules, regulations, things you can do and things you can’t. Then, like a thief in the night, an investor seals another home. 

With interest rates at nearly 8% and home prices still moving higher. It’s tough for people who are trying to save for a home. I should be more compassionate, I’m told.  

I should throttle my emotions and let people do what they need to do. Duncan, get with the program. We live in an enlightened new stage of life. Lighten up! Relax your old standards and lean into what's happening now. 

“Things are not the same as in your day, Ol Man!”