Discussing Real Estate and Topical Issues for Livingston County, Michigan
Friday, December 19, 2008
Technology – Searching For The Solution, Sometimes Finding It.
I use a Motorola Q smart phone. I love it. I was one of those ‘tethered’ users, though. Always had the hard-wired earbud in my ear. I decided to go Bluetooth. What the heck, the technology had been out there for a while, everybody’s using them (or so it seems) and I tried walking away from my desk with the phone dragging behind me for the last time.
I didn’t take the time to really check into the devices, just went to my local Staples, found a ‘cost-effective’ device and started using it.
I found that as I now wirelessly wandered around the office (now leaving my phone on my desk as opposed to dragging it behind me) I lost the pairing of the phone and Bluetooth when I went too far away. It wouldn’t automatically re-connect when I got back in range, either. So I’d have to go through the sequence again, enter the pairing code, etc., and it would be fine – until I wandered away again. I do that a lot.
Then one day, my cat did me a huge favor. Attracted by the blue blinking light, she jumped onto the dresser and started scooting the little device around. She knocked it to the floor, and scooted it someplace where it is un-findable. (This is my best guess at what happened, there were no eye-witnesses or web cam footage to claim otherwise.)
I decided to check into a new Bluetooth earpiece (I couldn’t work without one) and found one made by – Motorola! – the same manufacturer as my phone. This one was about twice the money, but it is great. It has a mouthpiece/microphone that folds up and closes and actually turns the device off to save battery power. If I wander out of range, it re-connects to the phone within about 5 seconds of getting back into range. No more fiddling around a dozen times a day to re-pair the devices. I can even close the mouthpiece to turn it off, re-open it and it will reconnect if I’m within range.
There are many fine manufacturers that make replacement parts and accessories for technology purchases. In this case, while the first Bluetooth unit worked, it had serious functional shortcomings for me. Perhaps it would have been fine with another make or model cell phone. It turned out that the best solution for me was to go with the OEM (original equipment manufacturer) brand. I’m sure there are dozens of similar stories out there.
I now safely store my Bluetooth unit in a little covered box when I get ready to retire. It rests comfortably next to my Realtor® pin and a few other small items. The cat still looks for interesting things on top of the dresser, and I don’t discourage her. I’m waiting to see what else she can teach me.
Monday, December 15, 2008
Howell Condo Market – Buyers Market!
Looking at condominiums that are located in the two Howell, MI zip codes (48843 and 48855) we can see how badly condos are faring in the current economy.
In calendar year 2007, there were 55 condominium sales recorded in the RealComp MLS. They showed an average sales price of $127,756, a median sales price of $120,000, and a total sales volume (total sales dollars for all 55 sales) of $7,026,554.
In 2008 (through 12/14/08), there were 48 sales with an average sales price of $85,543, a median sales price of $82,950 and a total sales volume of $4,106,053.
These are tremendous one-year drops in value by any standard. The average sales price is down 33%, the median is down almost 31% and the sales volume has dropped over 41%! To make it worse, with 214 units available in these areas right now, there is over a 53 month supply of condominiums (214 available divided by 48 sales this year for 12 months, or an average of 4 sales/mo).
Foreclosed unit sales in this area have tripled, from 6 in 2007 to 18 in 2008.
New construction has essentially stopped, and some builders/developers have either lost unsold units to foreclosure, gone bankrupt, or both. Homeowners in some condo associations are having a myriad of issues to handle, too.
If the development has not had enough units sold to invest the residents as Association Board members, the developer retains control. Some Associations are finding that while they’ve paid their monthly dues, services are not being performed (snow plowing, landscaping) because there’s not enough money in the fund.
Developers often base the starting dues on a certain number of sales per year and a maximum build out time. They may even stipend some of the early costs to get new sales in their communities. When the sales stop and there are many units left to build, it’s bad for everyone.
Built-out, established communities are also grappling with the loss of monthly dues due to bank-owned properties. When a condo goes into foreclosure, those dues stop (often dues are one of the first payment to be deferred when owners get into financial trouble, even before foreclosure). If your association is working on a tight budget and the number of foreclosed properties keeps climbing, it can really hurt the whole community. Banks do pay these back dues at closing, but it certainly creates a short-term budget crunch for the association.
There are definite deals out there in the condo market, but remember to do your homework before you commit yourself. If you’re considering a unit in a development that has a lot of empty sites, be extra careful. Once you analyze the Association budget, it may still be worth pursuing, but make sure you’ve got as much information as possible on which to base your decision.
Thursday, December 11, 2008
More Local Business Good News
Skiers and snow boarders eat at local restaurants, buy gasoline, and often shop at area stores while in town for the slopes. And Brighton has a very strong retail segment between the newer developments at Grand River and Challis and the downtown area.
Many years ago (way before Brighton had ‘grown up’ development-wise), I came out for a day of skiing. I decided to take Grand River all-l-l-l the way back to Detroit. I discovered a small store just east of Brighton called Marv’s Meats. I bought a couple of items and was amazed at the quality compared to my local grocery stores.
After that, I always made sure that I could stop at Marv’s either before or after skiing to pick up some food. I imagine that there are many other winter sports enthusiasts that come to the area and make their own discoveries.
I would have never guessed that one day I’d be living in this area. Between hunting and fishing in Livingston County with my dad and uncle, and visiting Mt. Brighton in the winter with friends, I guess I got hooked!
Wednesday, December 10, 2008
Some Local Businesses Doing Well
really great to see recent reports of good news
for local businesses.
First, Lowry Computer Products Inc., of
Brighton (Green Oak Twp) is one of three
suppliers that won part of a $75 million multi-
year contract from the U.S. Army. Lowry has
been a bar code leader for many years and has
moved into the passive radio frequency
identification (RFID) field, too.
The contract deals with ways to track military
equipment through RFID, and Lowry is the prime
contractor. Motorola and Zebra Technologies,
Inc., of Illinois are the other two companies
listed in the agreement.
A Crain's Detroit Business article stated that
the effect of this contract for new hires,
expansion or other area impacts are uncertain at
this time - but it sure can't hurt!
Liquid Manufacturing of Brighton (Green Oak Twp)
had a site plan approved that will let the
company modify its existing building and add
additional work shifts, but will not create many
new on-site jobs.
Liquid Manufacturing is a brewing and distilling
company on Whitmore Lake Rd and is planning to
add 30 new product lines that include energy
beverages and water brands. They are at the old
Thermofil site.
Thursday, December 04, 2008
Market Observations For Howell Zip Code 48843
The total number of homes sold are pretty close, 370 in 2007 (through 12/31/07) vs. 378 in 2008 (through 12/4/2008). The fact that the total number of sales has remained pretty constant is a good sign by itself. With lenders getting tougher on loan requirements, required down payments and more underwriting scrutiny it shows that there are still buyers out there looking for homes - and they're able to buy!
If we look at just the foreclosed (also known as bank-owned or REO) homes, the picture is more grim. In 2007, there were 47 bank-owned home sales of the 370 total, or about 13%. For 2008, we’ve seen 115 bank-owned home sales out of the 378 total, or 30%. That’s more than double last year’s rate and this year’s data is not complete at this point.
The median price dropped from $209,750 to $170,000 (a 19% reduction) for those same time periods. That’s a huge drop in value, undoubtedly influenced by the higher number of foreclosures. But there’s also the fact that owner-occupied homes are dropping in price, too, as the entire housing market loses value.
The time to sell a home went down– from 145 days in 2007 to 134 in 2008 So, homes that sold did so about 8% faster in 2008 - a small bright spot, anyway.
If you absolutely have to sell, expect to take a hit from what your home was worth 2 years ago. At least 20%-25% is not uncommon, and it may be even more.
Friday, November 28, 2008
Clean, Affordable Genoa Twp. (Howell) Condo – Great Condition!
This two bedroom, one full bath condominium is an upper end unit and has a one car attached garage. Hampton Ridge also has a clubhouse and an in ground pool, and you’ll enjoy the affordable monthly association fee of just $150. Close to I-96 Exit 141.
Ample grocery and retail shopping within a few minutes drive include Meijer’s, WalMart, Kroger, Kohl’s, Elder Beerman, Tractor Supply Company, Staples, OfficeMax, Radio Shack, Dunham’s Sporting Goods, TJ Maxx and many others. A variety of restaurants are also within that driving time.
See more pictures at:Realtor.com listing page http://www.realtor.com/Prop/1105035034
Thursday, November 27, 2008
Hear The Bell? It May Be Me!
If you’re in the area, stop by and say “Hello!” to an Optimist – especially if it’s a cold day. We’ll be working in one hour shifts, and I can tell you that standing for an hour on a cold day is a challenge. My time slot is from 3-4pm, and I’d especially love to see you and exchange greetings of the season!
This year’s campaign kicked off on November 14th, and the goal is $145,000. The Salvation Army also runs an Adopt-A-Family program to make sure that nobody is forgotten during the Holidays.
This is just one of the many community service projects that the Brighton Optimist Club undertakes each year. Sometimes your time and energy is as important as a monetary donation (or more so!).
Contact me to find out more about the Brighton Optimist Club and the programs it conducts for the youth of the area.
REO Fallacies – Part 1
First, the bank will take anything to dump a home. This is absolutely not true in most cases. (Of course, the borderline tear down is the exception.) If you’re offer is at 80% or less of the list price it will likely be rejected outright. If you’re asking for seller contributions towards closing costs, you’d better bump that price up a bit, too.
While banks don’t want to hang onto these properties, they’re just like you and I – they want the best price that the market will bear, based on condition, amenities and the like. Banks price homes in different ways, but they usually get at least two Realtor® evaluations (called Broker Price Opinions, or BPOs), and sometimes a full appraisal, too. When they list a property at a certain price, they’re fairly confident in that value.
Second, if you’re putting in an offer on a house that hasn’t been on the market before, you’d better go in close to full price for the first few weeks. Some Asset Managers will not take less than close to that amount for the first 2-4 weeks. Prices typically get reduced monthly, based on the listing agent’s Monthly Status Report. Asset Managers pay careful attention to local market trends (housing values, unemployment rates, etc.) when deciding upon a pricing strategy and the amount of the reductions.
Third, most banks have already priced the home for its condition. Sure, all of the appliances are gone, and maybe some light fixtures, too. It could have a few holes in the wallboard or carpet that is badly stained. That’s been rolled into the original pricing. If you’re on the edge with what you can afford, don’t expect the bank to bend over backwards for you to get that extra few thousand dollars to meet your pre-approval price point.
Remember, that may have been what happened to the prior owners who just lost the house – they became over-extended. As one Asset manager told me in an email that recently accompanied an offer rejection, “I can't help if they do love the house, they absolutely need to purchase something they can afford and this one they cannot, sorry.” Ouch!
More discussion in later posts, but remember that you buy these homes ‘as-is’, so be sure to get inspections done and carefully consider what you are trying to buy. Expect to pay a licensed plumber to de-winterize the home to check out the plumbing (around $100) and then to re-winterize it (another $200). This is over and above the cost of the inspection itself.
If you have questions about both the benefits and pitfalls of buying a foreclosure property, feel free to contact me.
Wednesday, June 04, 2008
Brighton Optimist Club - Free Fishing Derby For Kids - June 7th
Free to kids under 16, there will be awards in various categories across three age groups, free bait, a Lil' Anglers event for children 4 and younger, and a casting contest. A large display tank will show some of the better catches that day.
Bring your rod and reel and a bucket for the fish. There will be three weighing/counting stations available, and all fish are to be released after being recorded. There are some loaner rigs available and free bait, while supplies lasts. The first 400 kids registered will also get a tee shirt.
Registration starts at 7:30 am and the Derby runs 8-11 am. Souvenier picture fishing licenses are also available, but pictures must be taken prior to 10:30 am. Pizza will be served to the kids at 11. While results are being tallied, a local Jump Rope Team, the Jumpin' Allstars, will entertain the crowd. This event is totally FREE!
The Brighton Optimist Club is celebrating its 30th anniversary of "Bringing Out The Best In Kids" this year. This is the longest continually running fishing derby in the State of Michigan. Feel free to contact me with any questions about either the Fishing Derby or the Brighton Optimist Club.
Activity Report - First Time Buyers Driving The Market
Almost half of the sales (46%) are being attributed to first-time buyers. First-time buyers are defined by the U.S. Department of Housing and Urban Development (HUD) as:
- an individual (or spouse) with no ownership in a principal residence for the 3 years prior to the purchase of this home
- a single parent who has only owned a home with a former spouse while married
- a displaced homemaker who has only owned a home with a spouse
- an individual who has only owned a prinicipal residence not permanently affixed to a permanent foundation
- an individual who has only owned a property that was not in compliance with State, local or model building codes, and if that home cannot be brought into compliance with building codes for less than the cost of constructing a permanent structure
Condominiums continue to be a very good buy, too, although many first time buyers decline this type of home ownership because many lack basements for storage, they're intimidated by community regulations, and they don't want to pay the maintenance fees.
A future article will discuss the benefits and shortcomings of condominium ownership. If you have questions in the meantime, you're welcome to contact me directly. My blogging time has suffered due to a high increase in listing and selling activity, my community service commitments, and trying to keep a semblance of family time. You are always welcome to contact me via phone or email (available at my primary web site, http://www.RealEstateMich.com).
Tuesday, April 29, 2008
Buyer Activity On The Rise?
I am getting regular calls on my listings and frequent email inquiries from my various web sites and blogs. Most of the activity is coming from two groups - first time buyers who are generally in the $175,000 and below range, and move-up buyers looking higher. There are a lot of great values in the $225,000 to $300,000 range. Larger, newer homes with a lot of space and upgraded amenities seem to be the ticket.
This is great for the move-up buyers that have been able to save some money, retire debt, or both. They are in a wonderful position to get bargains right now.
A recent short sale in which I worked as a buyer agent gained the buyers $40,000 in equity. This is no joke. The sale price was $240,0000 and the appraisal came in at $280,000. A recent foreclosed home that I had listed sold for $210,000 and appraised at $240,000. Believe me, appraisers and banks are looking critically at comparable properties and have tightened up on the appraised values significantly, but these types of gains are still fairly common in my market areas.
Sellers, I still recommend that you don't put your home on the market unless you absolutely, positively have to sell. If you do market your home, accept that its value will be less than it was just two years ago. Unless it's priced properly you won't even get people to look at it to see how great it is.
Buyers, get pre-approved, Not just a pre-approval letter, but have your lender run the credit, put you through desktop underwriting and really see what (or if) you can afford to buy. If you're looking at foreclosures as a possibility, you may even have to get pre-approved by a representative of that particular bank, although they won't require you to use them for the actual transaction. They're simply trying to reduce the number of transactions that fail to close.
I regularly work with buyers and sellers, have a good listing inventory mix of traditional (homeowner or retail) and bank-owned properties. I'm experienced at short sales and have undergone loss mitigation training, too. If you're feeling the pinch and think you might be on the road to losing your home, call me for a short consultation. There may be other avenues you can take with your lender to keep you in your home.
Thursday, April 17, 2008
Preview Properties to Host Blood Drive - May 10, 2008
Hours will be 10 am - 3pm. You can call the Red Cross office at 517-546-0326 to set an appointment, or just show up during the blood drive hours.
Preview Properties is located at 130 W. Grand River Ave., Brighton, MI 48116, at the corner of St. Paul Street.
The Livingston County Chapter of the American Red Cross web site is http://www.liv-redcross.org/index.html
Wednesday, April 09, 2008
Brighton Optimist Club Golf Outing - 5/17/08, Whispering Pines Golf Club, Pinckney
In their 30 year history, they've given out tens of thousands of dollars in scholarships, conduct an Oratorical Contest to encourage public speaking in youth, recognize area youth through their Youth Appreciation events and Public Safety professionals through Respect For Law days. The Brighton Optimist Club was also the group that started the effort towards what is now the SELCRA Meijer's Skate Park. The group is supporting the only remaining Junior Achievement Program in Livingston County.
As part of their annual fundraising efforts, they are organizing a Golf Outing for May 17, 2008. It will start at 1pm at Whispering Pines Golf Club in Pinckney. They're looking for golfers and sponsors. Please visit their online registration page at http://www.regonline.com/Checkin.asp?EventId=610749 to register to golf, or click on the 'event details' link on that page for more information. Help the Optimists help our area's youth - and have a great time while doing so.
Register as a golfer or sponsor today! The Brighton Optimist Club Foundation is an IRS-recognized 501 (c)(3) organization.
Monday, April 07, 2008
Aprils' Community Service - Cell Phones For Soldiers
Stop in at the office located at 130 W. Grand River, Brighton (corner of E. St. Paul St.) and drop off your old cell phone. For each one collected, a serviceman or woman on assignment overseas will receive a free 60 minute phone card. If you can't make it into the office yourself, give me a call at 810-220-1478 and I'll be happy to make arrangements to pick up your old cell phone equipment.
Gleaner's Food Bank - Fill The Gazebo, May 3, 2008
On May 3, 2008, you can drop off items on Main Street in Downtown Brighton. Realtor volunteers will be standing in the center lane to accept your food and monetary donations. We'll also be stationed aroudn the County at various grocery stores to accept donations.
In addition to food, the Gleaner's Food Pantry needs household items like laundry detergent, toothpaste and the like. All food collected stays within Livingston County for families in need. In fact, we can't support our own County's needs and Gleaner's has to bring additional food into Livingston to help support the demand for its services.
If you see a great sale at your local grocery store, consider buying extra to donate on May 3rd. If you have trouble making it into town that day, most Realtor offices will have drop offs available. Or feel free to call me at 810-220-1478 and I'll be happy to get your food or monetary donation collected.
Tuesday, February 05, 2008
New Home Construction Summary-Jan 2008
New home prices and incentives to buyers continue to increase while time to sell is taking longer. Nationally, part of this is still an over-abundance of inventory, but as many builders are now reducing standing stock and beginning new construction only upon receipt of a signed puprchase agreement, this inventory continues to drop.
New home affordability, attractive mortgage interest rates and the dropping inventory will help this sector over the next 12 months.
The Detroit-area market was the nation's 36th largest for all of 2006. This latest report indicates that traffic at new models is still pretty slow and prices continue to drop, while time on the market increases - pretty much in step with national trends. In this market, the builders with the most exposure are Pulte, Toll Brothers and Centex, but there are a lot of great smaller, local builders, too. Many are also doing remodeling work in addition to new construction.
It's a great time to get a bargain on a new home, but shop carefully! There are many, many great deals available on exisiting homes, too, and you can often get more for your money with a re-sale home. Work with an experienced, full-time real estate professional and mortgage representative to get the most from this strong buyer's market.
Sunday, February 03, 2008
Michigan Voter Identification
The preferred ID is a valid Michigan Driver's License or State-issued ID card (also available at the Secretary of State office). Federal or state government-issued photo ID's, U.S. passports, military photo ID cards, photo ID cards from a high school or higher education institution and tribal ID cards with photo are also accepted.
So what happens if you don't possess any of these documents? You were asked to complete an 'Affidavit of Voter Not in Possession of Picture Identification' before being allowed to vote.
This State Law was originally enacted in 1996 and then renewed in 2005, but then State Attorney General Frank Kelley ruled it a violation of the equal protection clause of the 14th amendment on the basis that it was essentially a 'poll tax'. The law had been in 'limbo' since then.
This divisive issue has been split along political party lines, with Democrats in opposition and Republicans in favor of the law. Finally, the Michigan Supreme Court ruled that because voters can choose intead to sign an affidavit swearing to their identity, there was no poll tax. The ruling went along political party lines, with five Republican judges in favor and the two Democrat judges in opposition.
As the second voter in line at my precinct on January 15th, I can attest to the confusion of the election workers first thing in the morning, but they seemed to have it ironed out later in the day, according to my wife, who voted in the late afternoon.
Wednesday, January 30, 2008
MDOT Closing Park 'n Ride Lot at M-59 and Michigan in Howell
The project will also undertake ramp improvements at I-96 and M-59, resurface the road and make drainage improvements. Three bridges over M-59 will be totally replaced.
See this link for details. http://www.michigan.gov/mdot/0,1607,7-151-9621_11008_45330---,00.html
Monday, January 28, 2008
Groundhog Day Is On The Way
Groundhog Day started in Pennsylvania and New York State as a prediction of how the last half of winter would proceed. If the groundhog comes out of his burrow to see his shadow, he goes back in to sleep for 6 more weeks, indicating a hard end to winter. If he sees no shadow, he remains out, forecasting a mild second half of winter.
Punxsutawney Phil of Punxsutawney, PA is the most famous groundhog weather forecaster in the United States, but Howell, Michigan has its own Woody the Woodchuck. Taking up residence at the Howell Nature Center, Woody will be making her 10th appearance this year, which could make her record 8 for 10 if she successfully predicts this year's last half of winter conditions.
Woody will appear promptly at 8:15 am, and the there is a new breakfast option available, too. $8 for adults, $6 for children under 12, and children under 2 years of age are free. if you're planning on breakfast, please call to make reservations by dialing 517-546-0249. The proceeds will support the Wildlife Programs at the Nature Center. Photos with Woody are also available for a small fee.
UPDATE: Woody's prediction was that Spring will be early this year!
Saturday, January 26, 2008
Huron River Watershed Council
I'm a volunteer 'collector' for the Huron River Watershed Council, and one of their biggest events (in the Adopt-A-Stream) program is the Winter Stonefly Search. Stoneflies are aquatic invertebrates and live only in fairly clean water, so their presence is a rough indicator that a creek or river is generally 'healthy'.
Team are assembled, a leader and collector assigned (they've gone through specific training), and volunteers are added as 'pickers', to sift through the trays scooped out of the water.
Even though it's 21 degrees and snowing, we'll have a huge turnout of people looking for something to do. School-aged children with parents, environmentalists, fishermen, residents that live in the watershed all band together to make this great event possible.
For more information, see the link at http://www.hrwc.org/adopt/index.html
And don't worry about me getting cold in the water. I'll use my 5mm neoprene waders that will keep me very warm and dry
Random Thoughts About Buying Foreclosures
There's no doubt that there's a lot more foreclosure properties on the market and a lot more of them are selling. This post isn't as structured as most of mine are, but here are some general observations I've made on buying foreclosures over the last few weeks.
First, look at how long a property has been in the MLS. I've seen some lenders refuse all but full price offers in the first two weeks of a listing. Why would they do this? To make sure it's priced right, or perhaps to try to spur multiple offers to get two buyers competing against either other. The number of showing a property receives in the first two weeks will tell if it's priced right. And they don't care if it's a cash offer or a mortgage-backed offer, either.
Second, when looking at the lower-end priced homes in a given area, you aren't going to be successful bidding ridiculously low. In my market area, for example, homes at $115,000 or less will probably sell within $5,000 to $7,000 of list price. It really is a waste of time to write that offer for $75,000, folks. Unless, of course, the home needs total rehabilitation, but then you have to re-add those costs into your 'project' scope.
Third, banks aren't trying to give away these properties. They are willing to wait. And if they don't sell they'll often put them up for auction. At most house auctions that I've monitored, the successful bid price is at least the price the bank would have sold the property at, anyway. Often, they sell for a higher price at auction!
If you're a first-time buyer, please think carefully about buying a foreclosure property. Let's say you're approved for $150,000 but you're monthly payment comfort level is really around an amount of $130,000. At 6.5% interest and a 30 year fixed mortgage, the difference between financing those two amounts is around $147/mo, or $821 vs. $948 on the mortgage payment.
That doesn't include property taxes, PMI, insurance, maintenance or any of the other stuff that goes along with owning a home. And often, property taxes on foreclosures have gone 'non-homestead', which adds another 19 mils to the property tax rate. Once a home is vacant, and often shortly after the Sheriff's Sale, the local assessor changes the status, so for at least part of the next year after pruchase, your property taxes will be higher.
It makes no sense for you to be looking at $160,000 or $180,000 houses thinking that you'll get a fantastic deal at your $130,000 comfort level, yet many consumers are doing this. It's a waste of time and makes the home buying process a lot more frustrating.
Get educated as to what kind of, or how much home you can buy for your price range. Look at houses, but also keep an eye on the ones that have sold. That's where the real value indication is seen. Honest, forthright discussions with a lender and a Realtor(R) that you can trust will help you get the most value in the home buying process, especially as a first-time home buyer.
Tuesday, January 22, 2008
Mid-January 2008 Market Update
Livingston County finished 2007 with November and December reporting more sales than the same two months in 2006. As of today, (January 21, 2008), it looks like January could do the same. At this time in 2007, there were 59 sales, today we had 74. That's a pretty good increase.
It's also interesting to note that the Days on Market (DOM) went down from 169 in 2007 to 130 for the same period this year (1/1 - 1/21). Another great indicator is that about 25% of these sales were at list price or above as opposed to 17% in 2007.
We also had more homes sell within 90 days for this time period, 43 sales or 58% vs. 18 sales or 30% in 2007.
It looks like buyers have finally figured out that they can't just lowball their way to a great home. That works some of the time with some properties, but it's important to determine any property's TRUE VALUE. There are some deals in the market, but there are precious few steals.
TRUE VALUE takes into account the declining prices. It's not unusual to have buyers getting homes cheaper than the price the seller paid for it two, three or four years ago. When you find that house that you really want, have your Realtor(R) assist you in determining its market value, then go for it!
Sunday, January 20, 2008
2007 Washtenaw County Housing Market Report
Home sales dropped in number for 2007 when compared to 2006, dropping from 3,345 to 3,062 (or 8%) and condominium sales dropped from 761 in 2006 to 660 (13%) in 2007.
Sales volume (total dollar value of all sales) on houses went from $866,132,966 in 2006 to $766,375,165 - an 11.5% drop. In the condominium category, volume dropped from $135,160,039 to $119,784,350 - an 11.3% drop.
There was a 4% increase in 'fall throughs', homes under contract that never reached closing for one reason or another, and withdrawals from the MLS increased over 9% compared to 2006 (6,083 in 2006 vs. 6,652 in 2007).
Based on information from the Ann Arbor Area Board of REALTORS® Multiple Listing Service for 2007.
Sunday, January 13, 2008
December 2007 and Year-End Market Report
Analyzing data released by the RealComp multi-list system to its members, it appears that Livingston County finished 2007 with an small upswing.
While homes (single-family houses and condominiums) on the market were down by almost 7% from the same period in 2006 (419 homes vs. 450), total listings on the market, which includes vacant land, multi-family and commercial listings, were dead even (4698 for 2007 vs. 4695 in 2006).
In December, there was a slight rebound in both the average and median sale prices. While these are only good as a larger view, it's encouraging to see increases at the end of the year in these indicators. Comparing 2007 to 2006, the median price showed an overall drop of 8.6% from $215,667 in 2006 to $197,195 in 2007.
Houses fell from $218,900 median sale price in 2006 to $190,000 in 2007, and condominiums took a much larger hit, going from $155,000 in 2006 to $104,000 in 2007. Vacant land prices also fell dramatically, but on a significantly smaller sales (dollar) volume. This is probably due to the massive decrease in new home construction.
Another postiive indicator was in the monthly residential sales totals. Both November and December 2007 showed increases vs. the same two months in 2006, 145 in Nov 2007 vs. 130 in 2006 and 135 sales in Dec 2007 vs. 125 in 2006. The year finished with a 10.4% drop in total residential sales. The sales volume (total dollar value of all sales) fell 19.1% in this last calendar year.
We saw a lot of value drop in this last year. My personal opinion is that we'll see another 6% loss in value in calendar year 2008 in the County. In addition to more foreclosures coming into the market, tightening credit, increased scrutiny by lenders and more rigid borrower requirements may make home loans difficult to obtain for many potential buyers, even though the overall interest rates remain very good.
If you absolutely, positively have to sell your home now or at any point in 2008 be prepared to take a lot less than your last refinance or mortgage appraisal value. I'm sorry, but there it is. A full-time local Realtor that keeps their eye on market conditions in the various Livingston County home market areas (Cities, Villages, Townships and School Districts) and price ranges will be your best bet to maximize your selling price.
Buyers are poised to find some value in this market providing that they can meet the tougher new lender requirements to obtain financing. It's still possible to get 100% financing through FHA loans, but almost all other loan types are going to require some money out of your pocket. As home values continue to fall, this buyer's market will persist through 2008.
Friday, January 04, 2008
Michigan's Growth Industry - Wine!
Over the last few years, I've become more interested in wines in general, and Michigan wines in particular. I gravitate towards fuller bodied reds with a low relative sugar content. Of course, in Michigan you have no problem finding sweeter wines either, a fact that delights my wife.
Most people know about the Leelanau and Old Mission Peninsula areas, but there are some very good wineries in southeast and south central Michigan, too. Some, like Sandhill Cranes Vineyards in Jackson and Cherry Creek Cellars in Cement City, have their own vineyards.
Others like Pentamere Winery (Michigan's first urban winery) in Tecumseh buy grapes and do the wine-making at their site. Pentamere buys grapes only from watershed areas that drain into the Great Lakes. Stop in and talk to these guys, their passion is contagious! And take a taste of Garnet 2005 while you're there. Most red and white wine lovers will like this wine. Ask them for a tour of the basement for a fascinating look at a compact wine making operation.
There are more wineries and 'micro-wineries' opening that buy various grape juices and start the wine making process from that point, like Spotted Dog Winery in Saline. Don't let that stop you from trying some very good wines! (Their Saline River Red is a very enjoyable and affordable table wine.)
Some good general internet wine resources are CatchWine.com , WinesAndVines.com, and MichiganWines.com - website of the Michigan Grape and Wine Industry Council. The Benson Marketing Group (www.BensonMarketing.com/enews_monitor.html) serves the wine industry and has three different eNewsletters that you can receive in the General, Direct Shipping, and Wine Afficionado categories.
Free Radon Test Kits
Radon is a colorless, odorless gas that can cause lung cancer. It is estimated to be present in one of every five homes in Livingston County. Radon gas accumulates in the lower level of the home (basement) and enters via cracks in the foundation or the sump. It can also be found in homes built on a slab, and is easily remediated by qualified firms.
All homes should be tested for radon, especially if you spend significant time in the basement. January is National Radon Action Month.
For more information please check this link to the Indoor Air Quality section of the Environmental Protection Agency's (EPA) web site, this page at the Michigan Department of Environmental Quality (DEQ), and to the Livingston County Health Department web site.
Wednesday, January 02, 2008
Investors - Be Careful Out There!
The talk came around to investors who are having the same problem that many homeowners are experiencing - time to refinance but there's not enough equity in the property with dropping values. Making it somewhat worse is that there are fewer recent solds to use as a basis for determining value.
A good rule of thumb for any investor is to critically examine a property's cash flow. Don't just think about the old PITI guidelines - Principal, Interest, Taxes and Insurance. Build in a vacancy rate in case you have turnover. If you have a single unit house, one month's vacancy is 8.3 percent for the year. Are you able to comfortably carry the payments without rental income for a month? How about two months?
Before you buy, do a rent survey to see what rent prices are working and how long it's taking to fill vacancies. Add a certain amount for routine maintenance, even if you require tenants to do things like lawn care and snow removal. And don't forget about start-up repairs or remodeling that you may have to do rent a home.
It's a wonderful time to buy investment properties, but keep cash flow as your number one goal. Number two should be likelihood of and rate of appreciation. Number three is a 'no-brainer' - the tax benefits you'll get from owning investment property.
By the way, we think that 2008 will see property values continue to drop (at least through mid-year) unless there is a strong stimulus to jog the economy. And another quarter point interest rate cut by the Fed won't qualify! Again, if you're looking to move up to a larger more expensive home, buy a vacation home or investment property, the first six months of 2008 should be that time.