So You Think You Know How To Buy A House – Step 1

Sounds simple enough.  Then you start browsing. Maybe on a national home listing site, or you click on a social media ad.  You save a house or two as a ‘favorite’ and you keep going back to look at it.  You drive through the neighborhood, look at the house from your vehicle and think, “yeah”.

But buying a house is a process.  And over the years it has gotten much more complicated. It’s a little less complicated if you can buy cash, e.g., no financing, but there are still a lot of ‘gotchas’ out there.  And with a big ticket item, the ‘gotchas’ are more expensive.

Step 1 should always be to see what you can afford.  You don’t have to buy for the max, but know where your comfort level is at.  Prices vary greatly even within the same zip code.  TALK TO A LENDER.  I recommend you get at least two opinions, from two different kinds of lenders.  There are regional banks, local or community banks, credit unions, and mortgage brokers from which you can choose.

They offer different kinds of financing programs. Some have a limited number of loans and you will have to ‘fit’ into one of them. Other lenders have a wider variety of loan programs and you will have more comfort and choice in deciding which suits you best.  It’s as important to know that you qualify for an FHA loan (but not a conventional mortgage) as it is that your maximum price is x thousands of dollars. Or that the Rural Development Home Loan you want is good in certain areas but not possible in others.

Realize that different loan types may require additional inspections which will be more out-of-pocket expenses. If you do get pre-approved (which I highly recommend), be sure that the loan officer has run a credit check, not just taken your verbal answers. There are people who get to the point of making a formal loan application and then they discover an old or erroneous blemish on their credit which will take time to resolve – and they lose that perfect house.

Come back next week for the next step.

Image courtesy of Stuart Miles/freedigitalphotos.net

Robert Smith is a licensed real estate agent in Michigan and has worked at Preview Properties, PC for 20 years.  Real estate law and lending regulations can vary from State to State. This blog and its posts are not intended as legal or financial advice.

Flood Insurance Premiums to Change

In case you missed the article by Lalita Clozel in this morning’s (Mar 19, 2019) Wall Street Journal, flood insurance rates are being revised.   FEMA, the department that administers the National Flood Insurance Program, will start a new assessment of properties with several variables – hurricane rainfall, distance from a body of water, coastal surges, and replacement cost of the home – instead of using a single formula for an entire flood zone.

This will apply to inland river and coastal flood plains and zones, but the biggest impact is expected in coastal states.  It’s thought that homeowners with more expensive homes will face higher premiums while lower-cost homes may see a premium decrease.

The new rates will be announced April 1, 2020 and go into effect October 1, 2020.  Due to congressional restrictions on rate increase amounts, the premium changes may have to be phased in over a longer time period.  More details should be released soon.  Feel free to call me with your real estate questions at 810-220-1478.

photo courtesy of think4photop / FreeDigitalPhotos.net

What NOT To Put In Your Garbage Disposal

I saw this in my news feed today and had to blog about it.  A few years ago, a friend that worked for a property management company complained about renters that were clogging up their disposals with - potato peels.  For the record this should definitely never go into a garbage disposal.

My recent personal experience was a "duh!" moment.  We had a couple lemons that had been 'zested' for a baking project. I've always cut up old citrus into small pieces and used them to freshen up the smell of the disposal, so I wasn't thinking I'd have an issue.  But the disposal didn't sound right, so I stopped it and looked in there.  Saw the lemon pieces and thought, "hmm", that should work just fine.  Tried again and this time the disposal froze.

I hit the reset button on the bottom of the motor, took another look, then tried to grind them up again.  Same result. I grabbed my trusty kitchen tongs and started fishing out the lemon chunks.  But I came up with something else, too.  A dark blue kitchen wash cloth had fallen into the disposal and that's what was catching. I'm blaming one of the kids for that one.   It was pretty badly mutilated so it's history now. And the disposal worked happily ever after.

This link will take you to an article of really good things to pitch into the garbage can instead of the disposal.  I hope it saves you some grief.  If you want to talk about real estate or swap garbage disposal stories, feel free to call me at 810-220-1478.  

Michigan is 182 Today!

Michigan was admitted into the Union on January 26, 1837, as the 26^th State.  Of course, our history goes back much further. The name ‘Michigan’ is derived from the Native American ‘Michi-Gama’ meaning “large lake”.

Native Americans are thought to have mined copper in northern Michigan as early as 5000 BCE to 1200 BCE.  It was about 1841 when ‘modern’ mining took over.

Sault Ste Marie was settled by the French in 1668, making it the 3^rd earliest settlement in what is now the United States of America.  After the war of Independence, Michigan was included in what was then called the Northwest Territory.

Our oldest County is Wayne, founded in 1815. In 1846 Michigan became not only the first State to abolish the death penalty (except in cases of treason), but the first English-speaking government in the world to do so!

The State Capitol was built in 1879, our State Flower was declared in 1897, the State Bird in 1931, the State Tree in 1955, and the State Stone in 1965. Think you know them? (answers found at the end)

Did you know that Michigan has 3,126 miles of freshwater shoreline?  And as you would expect from the ‘Great Lakes State’, Detroit, Michigan is the home to the only floating post office in the United States.

The Westcott Company was founded in 1874 as a vessel reporting service, then the only way loved ones could know where their sailor family members were on the Great Lakes. Later, it took on duties as a mail delivery service, zip code 48222.  The J. W. Westcott II makes 15-18 deliveries every 24 hours, including mail, packages from FedEx and UPS, and even occasional pizza deliveries.

Sadly, the ‘Wolverine State’ no longer has wolverines in the wild. Some of us call ourselves Michiganians, others, Michiganders.  It’s said that the term ‘Michigander’ was coined by none other than Abraham Lincoln.  In 1848, Michigan Governor Lewis Cass was running for President and (possibly over-) emphasizing his military accomplishments. Mr. Lincoln then gave a speech against Gov. Cass, calling him a ‘Michigander’, possibly to relate him to being as silly as a goose. New research indicates there may have been earlier use of the term, but no doubt that its use in a Presidential campaign would help it get traction.

And with that, Happy Birthday Michigan! 

Answers: State Flower – apple blossom; State Bird – robin; State Tree – white pine; State Stone – Petoskey Stone. Real Michiganians, er, Michiganders knew that already.

Photo: Tahquomenen Falls

2019 Real Estate Forecast

Courtesy of Stuart Miles/freedigitalphotos.net

Depending on what you read (or news you watch), you would get slightly different opinions on how real estate will perform in 2019.  Here's a summary of housing industry sources for you: 

• National Association of Realtors (NAR) - Home sales will be flat; 3% appreciation rate; inventory will stay tight.
• Realtor.com - Likely will stay a seller's market for a couple of years as inventory slowly builds; interest rates likely to climb to 5.5% by year's end; about a 2% decline in overall number of homes sold compared to 2018
• Redfin - Home prices will be flat to 3% appreciation; Interest rates to 5.5% by year's end; more renters will find a way to buy.
• Zillow - Home values up 3%-4%; Interest rates to 5.8% by year's end; rising home costs and mortgage interest rates will encourage people to stay put.
• National Association of Home Builders (NAHB) - Builder confidence at 3 year low due to increased costs from labor, lots, laws, lending and lumber.  Prediction is flat to 2% growth in number of new home sales.
• Mortgage Bankers Association (MBA) - Housing demand will remain strong; mortage rates will hang in the mid-5% range; home prices likely to 'moderate'.
• Forbes - Mortgage interest rates continue to rise into the mid 5% area; millenials will continue to enter into home ownership; overall home sales to drop 2%; inventory will increase.

These are predictions nationwide.  Local markets vary.  It is still a good seller's market in Livingston County until you get to the homes priced at $400,000 or higher. Other nearby areas may vary somewhat.  Call me at 810-220-1478 if you want info on West Oakland or North Washtenaw.

Edit:  Coincidentally, an article ran in today's (Jan 24, 2019) Detroit Free Press under Steve Pepple's byline on page 5A.  The Metro Detroit summary is that the number of 2018 home sales were down, but prices were up.  For Livingston County, the median sales price was up 6.3% to $270,000 and the number of sales (2,721) were down 8%. I'll be analyzing the full 2018 data in the next couple of weeks.

Student Loan Debt Hurts Young Home Buyers

courtesy of Stuart Miles/freedigitalphotos.net

A recent Federal Reserve study has found that high student loan debt especially hurts the 24 - 32 year old population that want to buy a home.

Credit scores and the cost of credit and loans also plays a part in the downturn of home ownership across the spectrum of potential purchasers.

Jeff Cox of CNBC has a great, short article, which you can read here.

Michigan "High Outbound" State According to Movers' Study

United Van Lines' National Movers Study has Michigan at number 10 in its outbound moves for 2018.  United Van Lines also does a survey to find out why people move.  A top reason is career change (roughly 50%) but the migration to southern and western states often show reasons like job growth, lower costs of living and more temperate climates.

Top Five Outbound States?  New Jersey, Illinois, Connecticut, New York and Kansas.

Top Five Inbound States?  Vermont, Oregon, Idaho, Nevada, and Arizona.

For this study, 55% or more (of either inbound or outbound) got you a "High" rating, and "Balanced" if the difference between in- and out-bound was negligible.

You can see the full report at: https://www.unitedvanlines.com/contact-united/news/movers-study-2018

What The Heck Is Radon??

Very simply, radon is an odorless, colorless gas that is the second leading cause of lung cancer.  Unless you test for it, you don't know if your home is safe.

January is Radon Awareness Month, and in Livingston County, most municipalities (Cities, Villages and Townships) are offering free radon testing kits.  These are 7 day samples, and they are easy to use.

If your radon levels are above EPA recommended values, there are ways to mitigate your exposure.  Call your local government office to see if they have free kits.  If none are available, call the Livingston County Health Department at 517-546-9851. 

You can also download the EPA's 'Citizen's Guide to Radon' by this link.

2019 Color of the Year!

What will be the hot color for 2019?  There are a number of candidates.

Pantone believes it will be 'Living Coral', a warm tone that it believes evokes a "warm, comforting and nurturing" feeling.

Photo credit: Pantone

Along the same lines, Sherwin Williams is predicting its 'Cavern Clay' will be popular. A darker color than the Living Coral, it is earthier and suggests more of a southwestern mood.

Photo credit: Sherwin Williams

Behr's thinks its midtone blue, 'Blueprint', will be seen a lot this next year.  They are staying with the blue, teal and gray schema as being very popular.

Photo credit: Behr

Remember that these colors won't be showing up only in paint.  Often, fabrics and accent pieces appear as a complement to popular colors.  Whether it's an accent wall or full room, keep your eye out for these colors in 2019.

Thinking about a bit of painting prior to listing your home? Give me a call and I'll be glad to take a look at your place and give you my thoughts. 810-220-1478.

Brighton's 150th Birthday Party - August 13, 2017

Brighton, Michigan will be celebrating its 150th birthday on Sunday, August 13, 2017.  A full day of activities will keep you coming back throughout the day.  

Activities include a community picnic from noon to 4pm, an 'old town' setup on Main Street, and photographs from Brighton's past in the COBACH Center, home of the Brighton Historical Society. There are many other activities, too.  

Also, the Brighton Kiwanis Sunday Concert at the Gazebo starts at 7pm, with the the band 50 Amp Fuse.  There is also a classic car show on Main street beginning at 5pm.  For the big birthday bash you'll be treated to a laser light show immediately after the concert ends, around 9:15 pm.

You can read a longer article about this event at:
http://marketeer.ws/Events/Aug13_Brighton150Years8-Web.pdf

Check out the facebook event page at:
https://www.facebook.com/events/392239171155178/

Sellers Market? Buyers Market?

If you're selling you definitely want it to be a sellers market.  But what does that really mean?  It's all supply and demand.

If the demand is greater than the supply it is a sellers market. The reverse, it's a buyers market.  Some times we experience a 'balanced' market.  So here's how to figure it out. In real estate, if the supply of homes in a given price range is under 6 months, it is a sellers market. If the supply is around 6 months it's a balanced market.  Supplies over six months is a buyers market.

Real estate practitioners talk about 'absorption'.  That means that if you divide the current inventory by the number of average monthly sales for the last 12 months,  you get the months supply.

Right now (8/1/2017)  in Livingston County we are overall in a sellers market with a total absorption of 3 months, across ALL price ranges.  But in the $151,000-$200,000 range (popular with first time home buyers), the months supply is only 1.5 months. You got it - Sellers Market!!

$401,000-$500,000 is a 5.7 month supply, or a balanced market.  Go to $501,000 - $750,000 and we have 15.6 months of supply - a very strong buyers market.  So you need to have a better reference point than just your whole county, or township, or city.

We can take this a step further and break down by school districts or even neighborhoods if the neighborhood is big enough.  It doesn't work well in a community of 60-70 homes.

image courtesy of renjith krishnan/freedigitalphotos.net

Howell Real Estate News Apr 20 2016

Here’s the latest.  Inventory is just starting to improve, but so are the sales, so we’re not seeing much of a net increase – yet.  There are still a lot of expired listings, too.  Hopefully they will be back on the market in the next month or so.

Year to date we’ve seen 268 units sold at an average price of $208,060, or $117 per square foot.  This is a pretty typical number for Howell, but remember that new construction, lakefront homes and homes on large acreage will fall well outside this value.

Homes are still selling reasonably fast, 73 days on average since the 1^st of the year.

What’s it all mean?

Buyers still have to move quickly when they find a property they like.  I had multiple offers on a really low end property last week and the purchaser that prevailed moved quickly compared to the other interested parties.

Sellers, you still have a strategic advantage to list now instead of waiting for a month or two.  Take advantage of the lower competition and the buyer demand that is there now.  Interested about your home’s value? https://youtu.be/QFNTOL-qtps

Watch this week’s video here for a few more nuggets of info.  Feel free to call me at 810-220-1478 with questions.  Download the presentation in pdf format here.  

South Lyon Real Estate News April 7 2016

I'm starting to feel somewhat like a time loop.  Over and over and over again.  South Lyon inventory is flat.  No significant difference since the first of the year with 211 units currently available.

New listings have also been flat since the middle of March with 25 new listings in the last 7 days.  Time on the market for the 14 solds last week has slightly lengthened, now at an average of 98 days, although the median time on market is a more reasonable 70 days.

The average sales price last week was $304,547 or $134/square foot, pretty typical for this market area.

Market insights?  Sellers, don't wait for the warmer weather to list unless you have exterior work to do on the house.  Buyer demand is healthy with lower inventory, especially in the $350,000 and under price points.

Buyers, please work with a full-time local agent that knows your market inside out and backwards.  Any licensee can complete a purchase agreement, but how many of them can help you with getting all the info you need to make the best decision possible?  

You can watch my video report here or get a copy of the full market statistics and last week's new listings here.

Bob Smith has 17 years experience working the South Lyon real estate market.  Call for a home valuation.

Howell Update on March 31 2016

The inventory of available Howell homes is at a low for the year at 198 units.  Even though we had 18 new listings in the last 7 days, 20 were sold in the same period, and when you count in expired listings and those pended (taken off market pending the sale), we're at a net loss.

For the 20 sold properties, the average days on market was 45 - a quick time period.  But the median time on market was a blistering 18 days!  Buyers - don't hesitate when you find something you like,  I want to throw in a pitch for LOCAL, full-time agents, too.  We know the little nuances of our market in ways that you can't decipher from looking at multilist statistics.  Plus, we can react faster and get you into a home quicker than an out of area agent.  

The average and median sales prices were very close, right around $200,000, and the price per square foot is within what we normally see for the Howell market, $100-$125/sq ft.

Sellers - if you've been waiting for warmth and sunshine but are able to list now you'll be doing yourselves a favor.  There is high demand and low inventory.  That will likely change by the beginning of May.  More competition usually gets you top price and the quickest sales.

If you're interested in the 18 new listings you can download a copy of them here, along with this week's analysis.  You can also watch my video report here.

South Lyon Home Prices 23 MAR 2016

There were only 5 sales in the last 7 days for the South Lyon area, so that makes a weekly report senseless.  Instead, I'll talk about the year to date prices.

First, there's a lot of price variability in the market.  Older, smaller homes selling for under $100,000 right up to million dollar properties.  That often makes averages unrepresentative of true values. I'll give you those figures, but I think median values are a better way to go.

Watch my 3 minute market report video here.

Since 01 JAN 2016, 112 units have sold. This does not include a few for sale by owner properties and also some of the new construction that was never entered into the multilist system (MLS).  For the sold properties, the median price was $299,500 and the average sales price was $290,834.

The median time on market (time from listing to sale) is 42 days, the average is 66 days.  Both are pretty quick time frames.

The median price per square foot is $138 and the average is $133.  The median home was 2176 sq ft, and the average was 2181.  

A lot of different factors go into pricing a home.  Age, architecture, updated or not, lot size - and of course, location.  But you can expect to spend about $135/square foot if you want to buy an existing home in this area.  That means a 2000 sq ft home will be in the ballpark of $270,000.  

If you have questions about the South Lyon market, feel free to give me a call at 810-220-1478. Ask me about my Marketing Edge program if you're thinking about selling, and about my one-on-one Home Buyer Workshop if you're thinking about buying.

Keep up to date on general real estate info by visiting and liking my facebook page at http://www.facebook.com/MichiganRE.

South Lyon Real Estate News 3-17-16

Our active inventory is 203 units.  We are still waiting for the Spring flood of listings to happen, but that can be a mistake if you're a seller.  There is less competition and a lot of pent up buyer demand out there right now. Homes are selling quickly.

In the last week there were 28 new listings, but that's not enough.  With solds, expired, and pending sales, we're at a deficit.

10 homes sold in the last 7 days with an average sales price of $289,289 and the price per square foot was $131.  These 10 homes sold in an average of 55 days.  Existing resale homes in the $250,000 and lower price points are going quite fast.

You can watch my weekly video report here, get a copy of the weekly breakdown AND new listings here.  If you're interested in this market area, please consider following and liking my facebook page at http://www.facebook.com/MichiganRE, where I post local reports, news, and general real estate items of interest. 

Buyers – work with a LOCAL, full-time agent to have your best chance of success.

Sellers – agents can look at stats all day long, but it helps to know the market history and local influences on the market that are not contained in the multilist system (MLS).  Your best opportunity at success is also a LOCAL agent.  Don’t waste 6 months of time because you chose an out of area agent that advertises himself instead of YOUR HOME.

Howell Michigan Real Estate Update

Our active inventory is just 214 units.  We are still waiting for the nice weather listing mindset to happen, but that can be a mistake if you're a seller.  There is less competition and a lot of pent up buyer demand out there right now. Homes are selling quickly.

In the last week there were 25 new listings, but that's not enough.  With solds, expired, and pending sales, we're at a deficit.

11 homes sold in the last 7 days and because 3 were in the higher price ranges, our stats this week are skewed upwards.  The average sales price was $283,055 and the price per square foot shot up to $142 (typically in the $100-$125/square foot range).  These 11 home sold in an average of 55 days.  Homes in the $250,000 and lower price points are going quite fast.

You can watch my weekly video report here, get a copy of the weekly breakdown AND new listings here.  If you're interested in this market area, please consider following and liking my facebook page at http://www.facebook.com/MichiganRE, where I post local reports, news, and general real estate items of interest. 

Buyers – work with a LOCAL, full-time agent to have your best chance of success.

Sellers – agents can look at stats all day long, but it helps to know the market history and local influences on the market that are not contained in the multilist system (MLS).  Your best opportunity at success is also a LOCAL agent.  Don’t waste 6 months of time because you chose an out of area agent that advertises himself instead of YOUR HOME.

There was a delay in this report publishing. Stats accurate as of 3/14/16.

How's The Market in Howell? Glad You Asked

Inventory continues to decline, but that should change soon.  Right now we're at a 2016 low with 210 units available.

Last week, 19 new listings hit the market.  We also had 19 sold listings.  But with expireds, pendings and withdrawn properties, we actually lost inventory.

For the 19 sold, the average price was $211,250 or $116/square foot.  Average time on the market was 84 days, but one listing had been on the market for over 800 days (!) and if that one is excluded, the average time on the market was only 42 days. Folks, that is very, very fast.

At the risk of sounding like a broken record, here's my analysis for consumers.  

Sellers - if you're waiting for 'Spring' (look outside today, by the way), DON'T.  There are motivated buyers looking for homes and your competition is at an extreme low right now. Need or want to sell fast?  List it now.

Buyers - I know many of you are committed to other agents, and that's fine.  But please work with a LOCAL, experienced, preferably full-time agent.  Why?  Because they know the area, they don't have to drive 45 minutes to get here and they'll add real value to your home purchase.

Last year I worked with two buyers that found me after working with what could be called 'mega agents'.  The buyer agents on those 'teams' couldn't get them into homes quick enough and they had trouble reaching them by phone.  They didn't feel as if they were being taken seriously while they were ready to make the biggest purchase of their life.

If interested, you can get a list of last week's 19 new listings here, or check out my video report here.

How's The Housing Market in Howell?

Like many other parts of the country, local demand is outpacing supply.  Even with some new construction in the area, there is still not enough inventory.

Last week, there were 14 homes sold at an average price of $208,486, or $114/sq ft.  These homes sold remarkably fast on average - just 45 days!  We also had 20 new homes come onto the market.  I know what you're thinking.  Hey!  14 sold and 20 new listings?  That sounds like inventory is replenishing itself to me. 

Au contraire.  When you take into account the expired listings, those that went pending (an off-market status), and the consumer-requested withdrawals, we're at a decided net loss.  You can download the weekly new listings here and watch this week's update video here.

If you're a seller that's waiting for spring and has the ability to adapt quickly, this is a great time to list.  Motivated buyers and far less competition than you'll see in another month or two.  Feel free to request a home valuation here.

Buyers, if you're looking for a home in Howell, please consider working with a local, full-time real estate professional (like me) :-).  Working with an out-of-area agent that doesn't know anything but the basic geography will not be able to add quality to your home search.  And I practice what I preach.

Last year I had 5 outbound referrals so clients could get the best possible service by an agent from the area in which they were interested.  Why would I do that?  Because I am committed to the best possible service - and because you deserve the best possible service.

photo credit R. Smith

Weekly Market Update - Howell – February 22, 2016

Inventory is at the lowest point of the year.  Since last week, time on market has increased a bit to 109 days, average price per square foot is $127.  There were 12 solds last week and 13 new listings, but there were also some expired and withdrawn listings that had a negative impact on overall inventory.

You can get a copy of last week's new listings and some Year To Date sales info for the Howell homes market here.  If you want to watch my video report on the Howell realestate market, click here.

If you would like me to determine your home's value, please visit here.