Closed Sales – Financing Types Through September 2012

We’ve all heard some recurring sound bites about this year’s housing market in SE Michigan and especially in Livingston County. Inventory and time on market are down, average and median sales prices are up, and the total number of sales is up.


While I am a very active listing agent, I also work with buyers. And I know from my experience as well as discussions with other agents that it’s difficult to find a financeable house in the $125,000 and under price range. If you do find a house that’s ‘ready to go’ you can be sure there will be multiple offers. If it needs some work, it likely won’t qualify for government loan programs – FHA and USDA Rural Development. And of course, these are the programs that many people need to enter the housing market.

Instead of repeating this past month’s stats, I delved into the difference between the kinds of loan instrument used for January through September 2011 vs. the same period in 2012. Here’s what I found.

Cash sales went up only nominally YTD. They represented a little over 23% of total sales in 2011 and are a little over 24% in 2012. Since cash purchasers come largely from investor-owners, is this showing us that investor action is leveling off? Hard to say, but certainly the lower inventory likely has a role to play in this market segment.

Conventional mortgage sales went up from 34.4% YTD in 2011 to 37.45% YTD in 2012. With mortgage rates at an almost ridiculous historic low  I would have expected more of this type of sale, but first-time buyers usually don’t qualify for a conventional mortgage, so they likely have little representation in this segment.

All FHA loan sales (includes the FHA 203K renovation program) dropped from 24.61% in 2011 to 21.5% this year. And the USDA Rural Development program loan sales went up slightly from 7.5% of all sales in 2011 to 8.58% in 2012. When you combine the FHA and USDA RD programs, my stats show that they were a combined 32.12% of sales in 2011 and represent a lower 30.1% usage in 2012. So at least in this market, closings with government loans are down on a percentage basis.

My personal experience with FHA and Rural Development buyers has been that the properties appraise at a value of or above their sale price, but the underwriters for government loans are being very, very picky, in some cases bordering on the insane. I know that there are a lot of buyers out there that are pre-qualified for these programs, but finding a home that is in financeable condition is tough. And banks have been slow to correct the deficiencies needed for the financing of foreclosure properties, even if it’s only a few thousand dollars in repairs.

If you’re considering a home sale or purchase, please call me for a confidential meeting to discuss your goals. I’d love to help you with your real estate needs. Let me put my market knowledge to work for you.

New Listing-7637 Athlone, Brighton 48116

This home is located in the Tara Glen subdivision of Hamburg Township, just south of Winans Lake Rd and east off Hamburg Rd.  It's a contemporary 1 story home featuring three bedrooms and two full baths, built in 1980, with 1776 sq ft up and about 400 ft of the 1280 sq ft basement finished.  Wrap around decking, plenty of windows and a walkout basement.

It's been re-carpeted, repainted, three custom trapezoid-shaped windows and both garage door openers have been replaced as well as new appliances installed-including a cooktop, over/under microwave/oven, refrigerator and dishwasher. There's a dramatic stone fireplace in the living room.  Brighton zip code with Pinckney schools, the home is a short distance from US-23 and reasonably close to retail centers along M-36 or in nearby Brighton.

While the kitchen cabinets/counters and baths could use freshening for modern styles, it is very clean and in move-in condition.This home is priced affordably at $139,900 or $78/sq ft. It is a foreclosed home. See the complete listing at http://www.realestatemich.com/10/listing/21976

Foreclosure Purchases By Owner Occupants Declining?

Wow. Real Estate Professionals know that buying a foreclosure is an economical way for first-time homebuyers to get into a house of their own, so this recent study by New Vista Asset Management surprised me a little.


As reported in DS News, New Vista began tracking foreclosure sales in Q1 of 2009 and has continued their quarterly tracking since that time. They monitor 18 national housing markets, of which only Wayne County is in Michigan, but they plan to add additional unnamed housing markets beginning in 2012.

There has been a general decline of owner occupant purchases since the advent of the data collection. An owner occupant is a homebuyer that plans to live in the house, as opposed to a purchase by an investor for rehab-resale or as a rental property. Interestingly, the only one of the eighteen markets that showed a gain in owner-occupant purchases was Wayne County, MI.

I list foreclosures, and it’s not unusual to have a stipulation in the listing agreement that says no offers will be submitted for the first 7 days, then offers from owner occupants only for the following week. However, this is not universal among banks and some entities are going to auctions and bulk sales of ‘as-is’ homes that will generally not appeal to an owner occupant, due to either the cost or scope of needed repairs.

Banks that will take the time and effort to put a home into move-in condition are the most likely to have sales completed by an owner occupant purchaser.

Lower Priced Homes Predicted To Drop Value Faster

A new study says that lower priced homes will have steeper price drops than their higher priced counterparts, according to a report by DSNews.com.

Already discounted heavily, many of these lower end properties are ‘distressed’. Before the housing market tanked, this market was robust due to the proliferation of subprime and ‘teaser’ mortgages and lower down payments. With the tightening of credit conditions and lending requirements, this market has been hit harder than the higher priced homes that are generally dominated by repeat buyers.

But the higher priced homes face valuation drops, too. The analysis was prepared by Capital Economics, a macro economics consultant that provides international and property research. Their methodology used existing Standard & Poors Case-Schiller data that was weighted for 16 major cities and then created a national housing model. Their reports are available only on a subscription basis.

Feel free to call or email me if you have questions about the local Real Estate market. Get quick updates on my new blog postings by visiting and 'liking' my facebook page.

Ranch Homes For Sale in Howell



 Some home buyers have very specific requirements. Perhaps it’s a large kitchen, or a finished basement. Sometimes it’s acreage with a pole barn, occasionally it must have an in-ground swimming pool. One of the most often heard requirements is for architecture type, and it seems that ranch style is at the top of the list.


Of the 270 of homes for sale in the Howell School District right now, there are 90 ranches and only 12 are bank-owned (foreclosures). They range from a 1969-built manufactured home on deeded land (in Woodland Lake Estates) listed at $9,000 to a $1.8 million home on 204 acres in Cohoctah Township.

The low end home is bank-owned, on a small lot, has two bedrooms and two full baths and is 552 sq ft in size. It is not mentioned in the listing, but this subdivision has two Woodland Lake access parks for the residents. Woodland Lake is a large, all-sports lake and also has a Public DNR launch off Hilton Rd.

The high end house was built in 1940, is three bedroom, two bath and 1770 sq ft. The 204 acre parcel has a 5 acre private lake, and there has been engineering done to develop the land if the buyer wishes to pursue that avenue. It’s currently a farm with “excellent hunting” as an MLS (multi-list service) remark. It is also available for financing, land contract or cash terms.

There are 88 other ranch homes available in the Howell School District. If you, or somebody you know is looking for one, give me a call.