South Bend Real Estate Sales Report: February 2009

by Nick Molnar on March 1, 2009

January marked the lowest sales volume in the South Bend – Mishawaka – Granger Area MLS in recent history, coming in at $11.46 million (full report). Many people have been holding their breath to see what happened in February. And…nothing did. February’s sales were remarkably similar to January’s with 131 closed sales for $11.16 million in volume. That is lower, and technically a new low, but essentially the same as last month. Now everyone can wait to see if sales pick up in the Spring months starting with March, if they hold steady, or if sales come screeching to a halt.

The highlights

A Stadium Village condo sold for $495,000 – the highest price for a townhouse or condo in the area, and the highest priced sale in February by a wide margin.

The lowest priced sale was $2,900 for 309 Hamden Ct.

64 of the sales, nearly half, were for less than $50,000.

The full report

Here is a scatter graph of every sale, by price.

Condos and Townhouses

Besides the sale at Stadium Village mentioned above, there was just one condo/townhouse sale – at Somers Square on the south side of South Bend, at $122,000.

In short, February brought no answers to those waiting for them, and not too many sales when compared to the recent past.


{ 19 comments… read them below or add one }

matt March 1, 2009 at 9:26 pm

The graph in your article clearly shows that lending has come to a virtual halt. It also shows that housing speculators with cash are buying homes in the range where it makes sense to rent them and out and wait for the market to rebound. I have been in three bidding wars with multiple buyers on homes in Mishawaka that are offered in the $20-$25,000 range.

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Nick Molnar March 1, 2009 at 10:38 pm

February sales were split almost evenly between cash sales and those with financing. Here’s the breakdown:

66 cash sales
35 sales with conventional mortgages
25 sales financed by FHA loans
5 lease with option to purchase transactions

You should be aware that some bank owned listings are being priced considerably below comparable listings to attract attention, and quickly receive multiple bids. The sellers then contact all the bidders asking for their “highest and best” offer by a deadline. It gets them a quick sale at about the same price they’d get if they started higher and negotiated down with buyers. Several agents are becoming known for it. Mishawaka homes in the 20-25k range may fit that profile.

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Anon Alum March 1, 2009 at 11:28 pm

Interesting to review. Glad no one is “blaming the weather”….. Harsh winter didn’t help but can’t explain the slow down. I have been told that “activity” is up regarding showings and the like, if that is true then there must be some financing problems for the lack of closings or people have to delay to sell their existing homes as the case may be.

I think the enthusiasm for buying real estate has pretty much died except for those properties that can be bought for actual profit from monthly rents. The days of relying on asset price appreciation as a source of “income” are long gone and can no longer cure the ills of a stupid purchase price and carry costs. The South Bend area does have going for it the fact that rents never really strayed from home prices like they did in the big bubble markets. One interesting fact, according to Robert Shiller, rents nationwide pretty much stayed along historical norms that is tied to incomes (no surprise since you can’t finance rent per se like an asset purchase so no room for “creative financing”) even in the big bubble markets. That would indicate that home prices in the big bubble markets have ways to go before reaching the price/rent ratios of the past….scary for the big bubble markets, not so scary for the South Bend area home prices.

On net, South Bend is not a growing, vibrant community and with this next wave of economic restructuring it would appear that the trend downward will continue as higher income jobs in the FIRE (finance, insurance, and real estate) economy and possibly medical doctors takes a hit down. There will also be wage pressures on college/university jobs too. As such, I would expect the bubble years sales numbers to remain in the past for some time….and nearly forever in real dollar terms.

Does anyone have population and trend numbers for St. Joseph County?

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Anon Alum March 1, 2009 at 11:33 pm

Besides the Oak Hill inventory on the market, has Woodbridge sales died? Are some of the investros/flippers able to rent them out and make a return instead of selling?

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Nick Molnar March 2, 2009 at 9:46 am

There are 8 Woodbridge condos for sale now, of about 80 total units. 8 have sold in the last 12 months. The most recent sale closed October 24, 2008.

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Anon Alum March 3, 2009 at 7:16 pm

Looks like Woodbridge is selling better than Oak Hill, no?

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Nick Molnar March 3, 2009 at 11:48 pm

Yes, though at lower prices.

2008 saw:
11 sales in Woodbridge
7 sales in North Shore Club
5 sales in Oak Hill
2 sales in New London Lake

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JL March 5, 2009 at 10:34 am

Annon Alum – “On net, South Bend is not a growing, vibrant community and with this next wave of economic restructuring it would appear that the trend downward will continue ”

Please show me a community that is growing. South Bend is in good shape, thanks in large part to Notre Dame. If South Bend has a dim future, you might as well move into a cave and buy some gold (another bubble….just a commodity folks).

Job creation will get the housing market functioning at a normal level. No amount of handouts will keep a person without a job in a home!!!

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Anon Alum March 6, 2009 at 7:27 pm

JL – There are numerous communities in the midwest that are preforming well, especially compared to South Bend. I wouldn’t put too much blind faith in the Notre Dame economy paradigm, people said the same thing about GM. Moreover, farmland bought at the right price is a far better investment and store of wealth then gold. South Bend has a dim future. The global fear that has permitted low federal government borrowing rates won’t last. We won’t be moving into a cave, rather wealth will simple move abroad since in a global economy there are choices and some will decide not to participate in the debt slave nation as the grand children and great grand children are forced to pay for today’s consumption and “free” scooter chairs when the national debt eclipses the nation’s GDP. The present leadership is HELOCing out nation. It used to be that debt harmed the companies and individuals that took on too much debt but the majority could move on and prosper as they were more prudent, now we’ll all be massive debtors. Very unfortunate.

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Dean March 7, 2009 at 9:10 pm

How have the appraisals been? I’ve heard from friends that have sold that the local lenders have been pretty tight.

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Anon Alum March 8, 2009 at 11:57 am

Here is a good article. South Bend is similar to Cleveland, but not as bad, however South Bend does have a multi-year home demolition plan since the city didn’t have enough funds to knock them down in 1-3 years. South Bend may not be Cleveland but anyone that thinks it is a dynamic, growing community is mistaken. It is what it is. Just look at where the bulk number of home sales fall in regarding prices….then take out the ND related sales and you’ve got Clevelandish type of scenario….

Article link:

http://www.nytimes.com/2009/03/08/magazine/08Foreclosure-t.html?_r=1&pagewanted=all

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JL March 8, 2009 at 9:16 pm

Anon- I agree with your statements about low borrowing rates not lasting and the movement of wealth around the globe. On borrowing, I actually think rising interest rates might be the catalyst to make people start buying again. On wealth, it is ironic the media and leadership in government talk about “wealthy” needing to pay their fair share. The top 1% of earners pay 40% of all USA taxes and the top 5% of earners pay approximately 60% of all USA taxes. Hmmmm.

Education (Notre Dame, Saint Marys, Holy Cross, Bethel, IUSB, Brown Mackie, Ivy Tech), Health Care (Cancer Research, Memorial Hospital, St Joseph Hospital, South Bend Clinic), distribution and the nano-techonology park are all positives for South Bend……hence not blind faith in ND. Cleveland is not a fair comparison to South Bend. Cleveland’s population peaked at over 900,000 and now only has around 480,000 people. South Bend’s population peaked at around 130,000 and is now around 108,000. Land would be the greatest strength and weakness to South Bend. Vacant land helps to create jobs through construction of new businesses but vacant land is not good for housing. People just move rather than reinvest in a home. I hope that this trend starts to change because we behave like homes are disposable in this area. This is why the home choices around the South Bend city core are so weak.

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JL March 8, 2009 at 9:25 pm

Also, what industries does our government think everyone should work in? Education and health care.

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JL March 9, 2009 at 12:14 pm

Watch this clip on the economy. http://www.cbsnews.com/video/watch/?id=4852288n

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Max March 10, 2009 at 3:52 am

This is more of an emotional post rather than an academic one. The previous comments seem very well informed in regards to economic issues and the reasons a city will rise or fall but the last I heard on the news, the entire WORLD is on the rocks. I felt South Bend was out for the count in 1982 when the economy hit the skids. I thought there was no way it could ever recover from the worst recession I had ever experienced (I was in my early thirties at the time) You could hardlygive a home away let alone sell one. Financing was all but impossible. With in a few years it was back better than ever. We may never become a boomtown, but there are plenty of people that will continue to live here, relocate here, raise their families here, thrive here. Drive around Granger – where did all those folks come from that bought those nice homes. Surely they ae not all associated with NDU. There are a lots of “invisable” thriving small comanies – some not so small, located in our commuity. These companies will continue to come and go, some very successful and some not so. South Bend may be on the ropes but so was Rome when Carthage was poised to destroy them around 200 BC. Rome wouldn’t quit and would not admit defeat, ultimately destroyed Carthage and went on to establish their 500 year empire and changed the world. South Bend isn’t Rome, but attitude, courage, vision and fortitude, all in good measure will serve us well. No one can really predict what the future holds in store and there have been lots of long shots in the course of History that surprised everyone.

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Anon Alum March 11, 2009 at 2:40 pm

Hey Max – I feel ya. But why bet on a dead horse? Life isn’t THAT much of a cr%p shoot. We can look at the economic drivers of the local SB economy and it is less positive then the average. Moreover, SB really has bought into the ND paradigm. And that warrants caution…perhaps SB really has nothing else to hang its hat on? Sure, people will live here, same with dog patch for decades and even Appalachia. So what? One thing I know, Granger is hurting…..at least the residents there are. Business is down, and I don’t mean local retail, I mean commissions and salaries/bonuses. We will really see the full effects of this in 2nd half of this year. A community that graduates so few from High School like SB has a slim future. People that fail to avail themselves of even a free education create their own destinies. We will see a continued decline of American and foreign investment into our area and the urban decline will outpace progress I am afraid. It is what it is, the glass may be half full but its filled with stuff people don’t want to drink… One thing to ask, has the SB skyline changed since the early 1980’s? We’ve seen same medical related construction but that is mostly a function of outside money….there weren’t any significant construction cranes in downtown SB that I can recall.

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JL March 14, 2009 at 7:41 am

Anon Alum – ever heard of the saying “it is a recession for you and a depression for me”? Again, name a community or business not hurting. No there has been nothing new in downtown South Bend until recently because all the new office construction went to Mishawaka. Your comments are like the media – full of fluff and not facts (number….data…etc) to back the statement.

If your not happy about the economy, start a business and create some jobs so someone can buy your home.

Based on government action and dialogue this past week, I think the government might actually be starting to get “it” and I therefore see a light at the end of the tunnel. No, I do not think it is another train. “It” refers to action on mark to market, the up-tick rule, etc. The market surged this week on confidence and not some magical huge amount of profits over the past 7 days. Our politicians do not get the restoration or sight of a bottom in their 401K account or personal investment account will stimulate the economy more than a bottom in housing prices. Remember, the bread and butter mortgages are 15 and 30 year terms for a reason…..we should not trade in and out of homes constantly.

Did you watch the CBS clip I posted above? The best quote was, “if the government says the recession will end in 12 months, it will end in 12 months.”

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Anon Alum March 14, 2009 at 10:50 am

JL – You give way too much credit to the government. Ignore the government and go work or start a business.

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JL March 14, 2009 at 9:25 pm

I am trying to be polite regarding the federal government. I have been extremely disappointed with their actions overall. It took our federal government far too long to figure out the obvious issues. That said, at least they are finally starting to get it. No one wants our government to send our economy into a depression by destroying entrepreneurial spirit, confidence and willingness to take a risk.

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