Good News For Michigan's Housing Market

We're seeing it more and more. In the newspapers, local news broadcasts, hearing it on the radio.  As an example, today's Detroit Free Press has an article titled, "Michigan home prices rose 9% in January vs. 2014."  And here in Livingston County, we've been outperforming most other SE Michigan geographical areas.  What does it all mean, though?

Well, first, things are looking up.  But temper that with some reality.  The same article notes that our home prices are still 17.3% off their peak from 2005.  Yes, we have more new construction, and at least here in Livingston County, it's still a seller's market if your home is under $350,000 in value.  But what does that mean, exactly?

In the real estate industry, we consider the supply of homes under 6 months inventory to be a seller's market, over a buyer's market. Six months is a 'balanced' market. We get those figures by taking the average number of sales over the last 12 months and dividing it into the current inventory.  If 600 homes have sold in the last 12 months, 600/12 = 50 per month.  Let's say the inventory is 300 homes.  300 homes on market/50 sales per month average = a 6 month supply, or a balanced market.  We can break this down by price ranges, municipal areas and the like. 

Even if you're area and price range are in a seller's market status, that doesn't mean you can go crazy with the price.  Generally speaking, if you overprice by as little as 3% it will affect the number of showings you get.  Just 5% over priced may be the difference between a few showings and no showings.  How does that happen? 

Education.  Buyers are constantly looking at homes on the internet.  All of the listings come from the local MLS, but different sites (called portals by some) have better search features or education articles.  Buyers have an almost intuitive feel for when a property is overpriced because they've been looking at every 3 bedroom, 2 bath ranch between 1600-2000 sq ft in the area they like for months. Try asking $250,000 for a home that others sell for $220,000 and you'll be waiting for a while. 

So, yes, things are improving and the news is mostly good in comparison to where we've been.  But you still need a competent professional to assist you with your sale or purchase.  Remember that a real estate transaction is one of the biggest you will make in your life. Trust a full-time real estate professional.

image courtesy of ddpavumba/freedigitalphotos.net

It Is Time To Buy? - Prices Near The 'Bottom' Say Economists

Yes, I know. We've been hearing inaccurate predictions about the Real Estate industry for, well, years. But this recent poll of economists seems to indicate that we're (finally!) near the bottom of the home value skid.

Analyzing external influences like the homebuyer's tax credit and data from Standard and Poor's Case-Schiller Index, thirty three economists offered their views on housing prices. Most indicate that we're at a point where home prices are 'fairly valued', the report says.

Fair values are important to buyers, especially first-time home buyers who are most often on tighter budgets and who are also looking at entry level or more affordable properties. The economists expect prices to drop about 3% more from present values and bottom out in the second or third quarter of 2011. The report also indicates that it may take a lot longer for new home sales to rebound.

The link to the article is here: http://www.mortgagenewsdaily.com/01282011_home_price_outlook.asp


If you're considering a home purchase in my market area,  feel free to call me. It would be my pleasure to talk with you about your goals and to assist you in any way possible.

New Home Construction Summary-Jan 2008

In a previous post, I reported on an industry survey of new home construction that is conducted monthly by Bank of America. With their kind permission, here is a summary from the January 2008 report.

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.