South Bend Real Estate Report: October 2009

by Nick Molnar on November 2, 2009

There are 272 closed sales for October 2009 recorded in the South Bend Area MLS totaling about $28.79 million in sales volume.

That’s a bit higher than September 2009, which had 238 sales that totaled about $24.97 million. Such an increase is not uncommon – sales have risen from September to October five of the last nine years.  But the sales volume for October 2009 is higher than the total for October 2001. That is noteworthy as it’s the first month in 2009 where sales surpassed those of any previous year since 2001.  Check the long term graph of monthly sales volume below for more detail.

The high price sale was $700,000 on a builder sold home in Granger’s Northbrook Shores. It was first listed for $895,000 but priced at $850,000 at the time of sale.

The second and third most costly sales were both in Granger’s Covington Shores:
$515,000 for 14764 Heatherton, listed in July 2009 for $550,000.
$475,000 for 51730 Harborough, listed August 2008 for $539,000 and priced at $499,900 at the time of sale.

There were 69 sales at or under $50,000 and the low price sale was $5,500.

Check the scatter graph of the price of every sale in October 2009 below for a better sense of the market.

Financing

FHA loans remain the most common means of financing, with more than one third of the sales. It’s followed closely by cash sales with just under one third of the sales, then by conventional mortgage with about 1/4th of the sales. VA loans and other types of financing such as land contract sales each account for about 3% of the sales.

Condos and Townhouses

In October, existing condos sold in

  • The Forest – $162,500 on a $174,900 list price
  • Oak Hill – $150,000 on a $158,400 list price
  • Stonebridge – $85,000 with $850 in concessions on a $85,000 list price
  • Berkley Square –  $52,000 on a $54,900 list price
  • Topsfield – $46,000 with $4,500 in concessions on a $43,900 list price

I haven’t seen any sales of new condos this month, though Kite Realty reports 21 signed contracts for the townhomes they are building at Eddy Commons, “Champions Way.” They start above $370,000.

New Construction

A commenter recently asked if I could break out new construction sales in the monthly reports. Builders don’t all record sales in the MLS (which only has info on sales that were handled by a Realtor), but I do read comments and try to respond. So take this with a caution that there may be other sales, but from MLS data it looks like there were nine homes sold by builders in October:

  • Cornerstone Builders sold 50695 Brookside Drive at $700,000
  • Classic Homes sold 51800 Bittersweet at $175,000
  • Weiss Homes sold six homes at $204,525, $184,151, $170,360, $165,000, $161,660, and $138,780
  • Portage Realty Corp sold 18221 Courtland at $183,482 with $5,000 in concessions

{ 12 comments… read them below or add one }

Irish Eyes November 3, 2009 at 12:18 am

Always interesting info Nick….and thank you for your time and effort to post this information.

Just a few comments. Looks like the first graph might have an error or you read it wrong. From my review October 2009 dollar sales volume was slightly head of October 2001, NOT 2008. Please clarify.

I expect the remaining two months of 2009 to be fairly flat like the 2001 sales. I don’t expect to see a pop nor a big drop like at the end of 2008. There really is nothing to boast sales in this area and a fairly stagnant market is in the cards.

Looks like Eddy Street Commons is attracting attention…probably not as fast as the developer would like or expected…but certainly more than competing developments would like as sales outside of the Eddy Street Commons area are, well, dead, except for a few zombie sales. 21 signed contracts for more townhomes….I believe it although I would hazard to guess there are a few speculators in the bunch. I would also expect a high closing rate from the contracts, few will back out. Certainly ESC is taking away potential sales from Ivy Quad, except a few on the low price point where $120K makes a difference in starting prices. I have reviewed the floorplans and unfortunately for Ivy Quad, Champions Way (despite the cheesy name) has superior floorplans…but again Ivy Quad has beautiful brick and stone work.

A critique of Eddy Street Commons, the faux industrial look with non-authentic lofts type urban feel is disappointing. It reminds me of Disney World filled with fake facades and design…it is a make believe world and sadly doesn’t live up to what it could have been. When are they going to build a Leprechaun ride??? I just don’t get the whole pretend urban thing. It is cold and lacks greenspace. Certainly there was a need for a planned college town area (Campus Shoppes just doesn’t cut it), but this is over done and fake fake fake. I’m surprised they didn’t paint fake ivy on the brick or something…..sorta like the fake stone and wood beams in the ceiling of the ND Bookstore. It’s a small world after all, it’s a small world after all……………..

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Nick Molnar November 3, 2009 at 9:00 am

The graph is correct, my text was wrong. October 2009 had a greater sales volume than October 2001 not October 2008. The post has been corrected. Maybe I should look into creating a more readable chart.

I understand that for nine of the contracts on the Eddy Commons townhomes the buyer is the University of Notre Dame. I don’t doubt that there are also speculators in the group that signed contracts but I think more calculating investors may have bought into the city’s bond issue tied to the project rather than buying townhomes.

I think Eddy Commons is attractive. It’s not what I would design, but I’d guess it is appealing to college students and weekend visitors. I’ll try to post photos and videos sometime this month to get a broader public reaction. Hopefully you’ll participate in the comments then.

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Dave November 3, 2009 at 9:03 am

I’m guessing that the October increase can be attributed to people taking advantage of the $8K tax credit before it expires (even though it will be extended).

Nick, Is there anyway to find out how many of those sales were to first time buyers taking advantage of the credit?

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Nick Molnar November 3, 2009 at 10:59 am

I don’t know any way to find out how many of the October sales were by people enticed by the homebuyer’s tax credit. I imagine that kind of data will be available but not until long after people file their federal tax returns.

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Irish Eyes November 3, 2009 at 11:34 am

The nine townhomes that ND supposedly is buying is probably for visiting professor housing. There had been talk of needing quality visiting professor housing for some time. Putting them in graduate housing just doesn’t cut it, esp if they have kids. It makes the sales numbers for Champions Way more understandable…21 was a hard number to believe.

Eddy Street Commons reminds me of an “authentic” theme restaurant in a strip mall. The facade is all fake. Moreover, ESC looks out of place. It wasn’t like it was the Studebaker plant that was repurposed….it was created from whole cloth to look old school. I like the concept of new urbanism and have seen it done well, in my opinion this wasn’t.

It will be interesting to see what businesses open up shop in ESC. I suspect the lease rate is a bit high compared to other such store rent rates in the area.

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James November 3, 2009 at 12:35 pm

Surprising that Weiss Homes sold six homes. It must have been because of the first time home buyer’s credit. Weiss Homes recently lost a lawsuit that went to trial in Berrien County, case number 08-0048-CK-M, for breach of contract and fraud. Dave Weiss testified that his wife Rita authored around 20 bizarre, unsigned letters to the litigant which included bible versus implying that the litigant was in the wrong and his soul was damned since he had fallen away from grace. The litigant viewed the letters as an attempt to intimidate him. I don’t think things get much crazier than that.

https://www.ripoffreport.com/Builders-Contractors/Weiss-Homes-Inc/weiss-homes-inc-guilty-of-br-444da.htm

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Brother's Keeper November 3, 2009 at 11:01 pm

If you’d like more information regarding the possible class action lawsuit against Weiss Homes, Inc. please contact:

brotherskeeper12@yahoo.com

Weiss Homes, Inc.’s contract had stated (until around 10/2008 when they changed it after getting caught) that the exterior walls would be built to a certain R-value when in fact some homes (perhaps 1,000+) were not. The difference is substantial and was a way for the company to cut costs without the customer’s knowledge. No wonder the Weiss Homes, Inc. building contract prohibits the customer from inspecting the home during construction except at a few stated times and in the presence of a Weiss Homes, Inc. employee. Customer inspection was not permitted during the time insulation was installed and then closed up with drywall and siding. As such, the customer would never know what was underneath the siding or behind the drywall. Weiss Homes, Inc. has also attempted to prohibit people from taking photos during construction too.

The statute of limitations is 10 years in Indiana for a breach of contract claim. Damages could include money to upgrade the insulation (removal of siding, install insulation, replacement of siding) and for the extra utility costs incurred by the homeowner. The amount per home could be $5,000-$10,000 each. Homeowners that have a Weiss Homes, Inc. built home should review their contracts.

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Tracy November 4, 2009 at 9:15 am

I don’t have an architectural background, however I must say that I love the look of the new Eddy Street Commons. I think it’s cool and trendy yet “fits” in with the old Notre Dame campus buildings. I think they did a great job in the design.

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Esquire November 4, 2009 at 12:34 pm

I recently heard about the possible class action lawsuit against Weiss Homes, Inc. It appears to be fairly straight forward, Weiss Homes, Inc. promised X in their contract and they did not deliver X. It is a material difference. The damages would probably exceed $10,000 per deficient home.

I would expect that this blog will receive a completely baseless legal threat letter from Weiss Homes, Inc. / Rita Weiss. That is their modus operandi. Again, the letter will be utterly baseless but for those unfamiliar with dealing with attorneys it can appear to be serious. It is just a piece of paper. I am at a loss to explain the unsigned bible quoting letters that the plaintiff received from Rita Weiss. But then again, I have met Rita Weiss, enough said. Personally, I would have filed for a restraining order, but then again, I wouldn’t have Weiss Homes, Inc. build a house for me in the first place. There are many good, decent and honest builders out there.

I can only suggest to those people considering building a home to do their due diligence before signing anything. Talk to people in the neighborhoods about their experience with the builder, punch list issues, construction problems, etc. Do your homework!

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James November 6, 2009 at 11:00 am

Speaking of Weiss Homes, I just saw this posted. Thought it may be of interest to others.

Reply to: comm-eqdjp-1425154064@craigslist.org

“If you contracted with Weiss Homes anywhere in the Michiana area and currently still own the constructed home, please read this post.

A homeowner who contracted with Weiss Homes in which various disputes arose has won a civil case in Michigan, receiving a favorable jury verdict against the builder for breach of contract and fraud. Among other things the homeowner discovered the house was not insulated according to the terms of the contract provided by Weiss Homes. Additional investigation uncovered other homes that were found to be similarly underinsulated according to each of their contracts with Weiss Homes. In addition to state laws, the Federal Trade Commission (FTC) subjects builders to its R-value Rule. The R-value Rule requires builders of new homes to include certain insulation details in contracts and that the insulation promised is actually installed.

It is estimated Weiss Homes has built nearly 1500 homes from 1998 to 2008. If your contract is dated during this period, look for the following clause in the addendum to your contract which includes “Framing Specifications” under the subheading “insulation”:

“This gives the exterior walls, according to the manufacturers, a total R-value of 19.”

If you can identify this in your contract or need assistance in identifying whether this is in your contract, please respond to this thread and include your contact information. Responding does not bind you to the potential class if such action commenses after the investigative period. “

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James November 6, 2009 at 2:15 pm

The Federal Trade Commission allows for a manufactured R-value product to vary by up to 10% for manufacturers of such products. However, insulation installers and home builders are NOT permitted such leeway. That is, insulation installers and home builders can only add up the R-value of each product as stated on the product label AND it must be installed according to the products instructions. The FTC can also impose a civil penalty of $11,000 per incident.

That would mean Weiss Homes could be liable for $11,000 (FTC civil penalty) and $10,000 (homeowner damages) = $21,000+ per home.

If Weiss Homes loses, then will they be able around to honor home warranties? Doubt it.

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Irish Eyes November 6, 2009 at 4:06 pm

South Bend Tribune article today…”Recession slows Eddy Street project”.

This has been an under reported story for some time (meaning years). ESC was delayed a bit already. ESC really will only have activity 8 months out the year at most and so might not be able to justify such a large, luxury hotel. There just isn’t the level of demand out there.

My opinion: As a Notre Dame alum, Notre Dame should pay taxes just like everyone else. The old, tired argument that they bring in so much economic activity to the area is a false one since businesses do that too AND they are taxed quite heavily every way they turn. Eddy Street Commons is a Notre Dame project through and through, don’t let the hardworking local taxpayers foot the bill for this country club extension. The lifestyle amenity campuses across the country have gotten out of hand and are subsidized by the taxpayers since they aren’t taxed on the one hand AND we as taxpayers provide low cost education loans on the other. The subsidies from the government must end.

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