Strategic Defaulters - FICO Has Your Number

OK, so they don't have your actual (FICO Score) number, but they do have a profile of who is most likely to use strategic default as an exit strategy. You manage your credit better than the average consumer, have lower revolving balances and generally, you don't exceed your credit card balances.

Strategic default is generally accepted to mean default by a consumer that still has the ability to make payments. Often these folks are value-keyed, figuring that if they walk away from a home that isn't worth what they owe, perhaps they can also pick up another home at a cheaper price before the default impacts their credit.

If you are not facing an economic hardship, you will not be eligible for a short sale, which is the route many distressed homeowners first explore.  Since those considering a strategic default are not in a 'distressed' condition (other than overthinking the value of their homes against current market prices), strategic default often seems like a good idea to them. 

This 'profiling' could help servicers to reach those considering strategic default before they make that final decision. The analytics developed by FICO Labs indicate that the riskiest 20 percent of borrowers actually comprised 67 percent of consumers who later executed a strategic default. To me, that's an amazing number.

In this report from DSNews.com, Dr. Andrew Jennings, chief analytics officer at the Minneapolis-based FICO and head of FICO Labs said, "Strategic defaults are bad for lenders and investors, they're bad for the homeowners who elect to default and they're bad for neighborhoods and cities. Preventing them is in the interests of everyone involved."

You can read the entire article at DSNews.com by using this link.

Great Livingston County Deals - Part II



Hump Day Strikes Again!

 The last 'deals' post seems to be getting a fair amount of traffic, so I thought I'd follow up with more - this time for a Wednesday. 

'Hump' day is the best 'deal' day out there - middle of the week, slow for taverns and restaurants - and these are just two that popped into my head. We all need a little relaxation in the middle of a busy week, don't we?

In Brighton, try Stout Irish Pub on Grand River.  It's $3.50 burger day all day, and these are good burgers.  Happy Hour is pretty good all week long, too.  Nice selection of draft beers, big screen TV's for the sports fans and a nice setting.  Sign up for their customer loyalty card (regulars call it the 'green card') and build credits for future nights out. There's a municipal parking lot right behind the place, but it's sometimes pretty crowded. You may have better luck parking on East Main St.

Still in Brighton, but down Main St at the corner of First is StoneFire Bistro. Their Happy Hour features $2 pint draft beers and $3 glasses of house wines.  Those are very good prices, although I would forgoe the bud and bud light for a more upscale draft beer. Heck, they're ALL $2/pint on Wednesday. Get the good stuff!  Stick around towards the evening and it's Rib Night at StoneFire.

Have a favorite Wednesday deal to share? Post it as a comment.

Two Livingston County Cities Get Tree City Designation for 2010

The Arbor Day Foundation recently released its list of 2010 Tree City Awards. Howell, Michigan was named a Tree City for the 23rd straight year, and Brighton, Michigan received that honor for the ninth year in a row. Congratulations Howell and Brighton!

Four standards must be attained to achieve this recognition, which is open to communities of any size. There must be a Tree Board or Department, a tree care ordinance, an Arbor Day observance and proclamation, and a community forestry program with an annual budget of at least $2 per capita.

The Tree City USA  program is sponsored by the Arbor Day Foundation and is run in cooperation with the USDA Forest Service and the National Association of State Foresters. National Arbor Day is celebrated on the last Friday of April, this year that's April 29th.
For a complete list of Michigan municipalities that won this award, visit the Michigan DNR website.

Great Livingston County Deals

I've been pretty much just posting that dull, dry Real Estate stuff lately, so I though that it would be nice to 'change it up' a bit.  Here's the first in a series of posts about some great restaurants and watering holes in Livingston County. (Disclaimer: information is true at the time of the posting, may not last forever. What does?)

Since today is Monday, I'll start with a couple of Monday deals.  If you're in Brighton, it's hard to beat the Monday half off burgers at BoomTown Kitchen + Tap.  Great burgers (just like the rest of the menu), very good value.  Monday is also half off Michigan microbrew day at the BTK.  They have a great selection of Michigan microbrews and most pints will be just $2.50 each. The larger sized Michigan microbrews (22 oz.) are also half priced on Mondays. The burger deal is all day, the microbrew discount is Happy Hour only (3-6pm).  Remember, microbrews are a little stronger than the average beer, so don't overindulge or have a designated driver.



photo-Bob Smith

 Up in the Howell area, Los Tres Amigos, at 4184 East Grand River near Latson Rd, has $1 taco day on Mondays.  Dine in or carry out, doesn't matter.  Hard shelled beef tacos are a buck each.  And they're really good!  Domestic drafts are also $1 each on Monday, so sit in the bar, order a couple of tacos with a beer, then order a few more tacos to take home to the family.  Or bring them along and make a family outing of it.  If you're in the mood for a Margarita, it's only $2.50 on Monday and Tuesday.

Have another great area Monday deal? Pass it along in the form of a comment.  We'd love to be in the know.

HOME SALES INCREASE PREDICTED

This past week, Freddie Mac predicted that 2011 will see a 5% increase in home sales over 2010 in its April U.S. Economic Housing Market Outlook. Wrapped within prose about spring arriving and cherry blossoms blooming, the basis for this optimistic forecast is the fact that unemployment declined for the 4th straight month, and that real estate employment was up 10,000 jobs since November 2010.

Housing starts, which had a very small increase in 2010 levels when compared to 2009, are predicted to slowly gain ground throughout 2011, with a larger jump in 2012.

Buyers opting for a 15 year mortgage vs. a 30 year mortgage are able to save about 0.75% on their interest rate, according to bankrate.com, but most homebuyers still opt for the longer 30 year instrument.

A homebuyer with a $165,000 mortgage and a 30 yr. term at 4.85% will make total payments of $313,448.95 over the life of the loan. The same mortgage amount with a 15 year term and an interest rate of 4.10% will pay a total of $221,178.62, a savings of over $110,000. Both presume no additional payments and all payments made on time.

It remains to be seen whether this forecast will pan out, but in my market much tighter lender requirements combined with lower appraisal values and more underwriting requirements are making it tough for many first-time homebuyers to successfully get through the home buying process.

Quicker Lender Response To Short Sales Near?

Reps. Tom Rooney (R-Florida) and Robert Andrews (D-New Jersey) have introduced a bill that would give lenders a 45 day deadline in which to render a decision on a short sale offer, according to an article published today by DS News. The National Association of Realtors (NAR) is supporting this effort.


Nationally, short sales account for 13% of recent home sales. The Prompt Decision for Qualification for Short Sale Act of 2011 still has not been referred to a committee. Hopefully that will happen promptly (pun intended) since short sales are often the brightest ray of hope to homeowners that are facing foreclosure.

DS News is a source of breaking news and up-to-date information for the default servicing professional.

You can read the entire article here.

Livingston County Realtors To Conduct Food Drive - May 7th!

On Saturday, May 7, 2011, the Livingston County Association of Realtors will again have a food drive for Gleaners Community Food Bank. In 2010 we hit 39,000 meals collected! Our goal this year is 40,000 meals.

Drop off points include the Brighton Millpond and the Howell Gazebo, next to the Historic County Courthouse. In Brighton, you can pull up on Main Street and volunteers will be there to take your food item donations between 9am and 2pm.

Suggested items are canned meals, PB&J, macaroni & cheese, cereal, spaghetti and meat sauce, toiletries and laundry detergent. No products in glass containers, please.

You can also make monetary donations. With the food bank's buying power, $1 can actually provide 3 meals! It always makes ME feel better to donate food items, but money feeds more people.

Most local Real Estate offices will be collection points, and on the day of the food drive many local grocery stores will have volunteers stationed to take donations, too.

If you can't make it on the 7th, consider dropping off donations at my office at anytime before that date, or call me. I may be able to swing by between appointments and pick it up. Preview Properties and I will be happy to get the food to the drive for you.

Selling You Home In Today's Market - Free Seminar

Should you rent your home or sell it? Or work with your bank to modify your loan? What is your house worth?

How do you find a buyer for your home? Can you no longer afford to make your monthly mortgage payments? Do you owe more on your mortgage than your house is worth?

Have you received a notice of default on your home?

This seminar is free and open to the public. We'll discuss the issues above and answer any you have regarding the current local residential real estate market.

Feel free to invite your friends to this event.  Call  or email me  for reservations.
Hope to see you there!

Existing Homes A Better Value?

Good credit scores + savings for a down payment + job security = consumers that can afford to build a new home. But tighter lending guidelines are impacting even that group. Government data suggests that a new home used to cost about 15% more than a resale home, but the difference now may be closer to 48%.

Blame a weak housing market, where existing homes are more affordable than they have been in a long, long time. Add in the foreclosures that lower prices even further, and the short sales that often see homes selling for as much as 10%-15% under market value.

On top of that, the prices of new homes have risen about 6% nationally, although prices vary quite a bit from one part of the country to another. Many of the smaller homebuilders are literally out of work, and some have lost their tradesmen to areas where work is more readily available. On top of that, the price of materials keeps increasing, too.

New homes represent a small portion of total home sales, even in a ‘good’ market. But they do add jobs not only for construction, but to the real estate, lending and home services and products areas. Think of all the new appliances, furniture and furnishings that often go along with a new home purchase.

The National Association of Realtors (NAR) February Report on Existing Home Sales (released March 21, 2011) indicates that cash sales reached a record of 33% of sales in February 2011, with 19% of sales attributed to investors. While this may seem ‘unfair’ to potential homebuyers, the investors actually help by purchasing properties that are often not financeable (they need too many or major repairs), and by repairing damaged homes they are helping neighborhoods to retain value. It’s amazing what a couple of run-down houses can do to a neighborhood.

Michigan Takes Huge Census Hit

Yes, we are the only State to lose population from 2000 to 2010, dropping 0.6% of our residents and ending with a head count of 9,883,640. Large cities dependent on auto manufacturing fared the worst. Detroit lost 237,000 people for a 25% drop, Flint lost 18%, Saginaw 17%, and Pontiac lost just over 10% of it's population. But some areas gained in population.

My ‘home base’ – Livingston County – actually fared well in the census, gaining 15.3% or 24,024 people since 2000, the second highest gain among Michigan counties. Clinton County was the winner with a 16.5% population gain. The other 81 counties were either negative or slightly more than 2000 census levels.

Some other counties that gained were Macomb at 6.7%, Washtenaw at 6.8%, and Ottawa County with a 10.6% gain. Ottawa County is on the west side of the state. Recognizable cities in Ottawa County include Grand Haven, Zeeland and Holland.

Among Michigan’s top 20 largest cities, only 5 remained unchanged or gained in population, with Sterling Heights in Metro Detroit leading the way at a 4.2% increase, and Wyoming, near Grand Rapids showing a 4.0% gain. Detroit, Flint and Pontiac were the biggest losers in this category, with -25.0%, -18.0% and -10.3%, respectively.

For an easy to use interactive map, go to http://www.detnews.com/article/20110322/SPECIAL05/110321001/1413/Interactive-map--Population-changes-by-Metro-Detroit-community this link on the Detroit News web site.

For more 2010 State census data, visit Michgan’s web site at: http://www.michigan.gov/cgi/0,1607,7-158-54534---,00.html

Great New Condo Listing

This very well maintained 2 bedroom, 2 bath condo is near Palmer and I-275 in Canton.  All appliances stay, community has inground pool, clubhouse and fitness center.  Adjacent to Fellows Creek Municipal Golf Course. Great west suburban location.  Community not FHA certified, so cash or conventional mortgage offers only, please. Great for affordable living or as in investment.  Call me for details.

http://www.realestatemich.com/10/listing/20580

New Construction Market

I participate in, and receive the results of a monthly survey of Realtors from across the country. This survey from Credit Suisse is a comprehensive look at various market areas. This month's report notes that the new home market is increasingly driven by buyers that are responding to "great deals, strong affordability, and the fear of higher mortgage rates."


The Metro Detroit data signals that buyer traffic for new construction was short of agent's expectations, that builder incentives were rising, prices were still falling and it was taking longer to sell a home. No surprises there!

There are opportunities to pick up lots or even completed homes at good prices. You do have to be careful about developments that are not fully built out and that have Home Owner Associations (HOAs), though. Typically the developer keeps control of the HOA until it reaches some pre-determined occupancy rate, 50%, 60%. At that point management transfers to the residents who elect officers.

Many smaller builders and developers have gone out of business and your selection of communities is somewhat restricted to the larger production companies. Some consumers are buying lots and operating as their own 'general' contractor, finding the tradesmen to do the specialized jobs like HVAC, electrical and plumbing. House 'packages' from some area lumber companies are also another choice for a new built home. If you decide to go this route, be sure that you have enough time to attend to all of the details required with building your new home. Often it's better to pay a little more to get an experienced general contractor on the job site as your 'eyes and ears'.

It's also a bit tougher to find financing for vacant land and for construction loans, but they are available. Vacant land sales are still depressed. Here's a quick summary of Livingston County YTD vacant land sales as of the end of February for the last seven years:

2005 - 67
2006 - 41
2007 - 17
2008 - 10
2009 - 12
2010 - 18
2011 - 16

Should I Think About Selling?

Like many answers, this one is conditioned upon your reason for selling.

Career and/or location change. This is the group I most often see that absolutely has to sell their home. A great new opportunity out of state, the desire to be closer to family, or retirement to a warmer climate are the most common reasons.

While you can try to rent or lease the existing home, it is very difficult to be a 'long distance' landlord. Many consumers that don't have enough equity to make the sale at least a break even proposition are hiring property management firms to handle tenant screening, rent collection and property maintenance. Their reasoning is often that they are waiting for the market value to go up, but most Real Estate industry and national economic experts are predicting a 5+ year wait for that to happen.

Move-Up Homeowners. This group needs a larger home and may or may not have a lot of equity in their existing home. The family has grown and they need more space. Why not take advantage of buying a bigger house while prices are down? Often that is a good plan, but it depends on their ability to bring money to the table when the current home is sold in many cases. Often there's not enough left to make an appropriate down payment on the new house.

This group also thinks about leasing or renting their existing home, and that sometimes works, but remember to plan for at least a one month vacancy period when the lease is up. You will also need reserves in case a furnace or water heater goes out, or for other small repairs. While the rental market seems to be pretty good right now, it's still all about the money. It's easier to rent an $900/month house than a $1800/month house.

Discretionary Move. This group doesn't have a particularly strong motive to move. Perhaps it's a longer than desired commute to work or they want a change in setting for no particular reason. The days of selling (at a profit, of course) are pretty much gone at this point in time. If you purchased before 2002, you may be OK, especially if you purchased with a 20% down mortgage program.

Everybody's situation is different, and I am happy to go over the benefits and pitfalls of selling with you and to provide you with an approximation of your selling costs without further obligation.

Upcoming Real Estate Seminars

Preview Properties will be hosting some real estate seminars in the near future.

This Thursday, March 10th, we will have a 'Homebuyer Seminar'. Learn the ins and outs of buying a home in this market. Hear from Real Estate professionals, lenders and title company representatives about the different parts of the buying process.

On Wednesday, March 23rd, there will be an 'Investing In Real Estate Seminar'. Learn how to make the best choices when buying properties for investment purposes.

And last, on Wednesday, March 16th there will be a Real Estate Career Seminar. If you've wondered about what it's like to work in Real Estate, please drop in.

All seminars start at 6pm at our office at 130 W. Grand River, Brighton. Feel free to contact either me or Lisa Bohlen at 810-220-1505 for more info.

Winning at 'Highest and Best'

In my market areas, there's a shortage of supply in the under $150,000 price range. That means that most first time buyers are getting into multiple bid situations.  As both a listing and a selling agent, here's what I've seen.

First, sometimes the list price is artifically low. Maybe it's a short sale and that's the only way the seller could generate enough showings. Maybe it's a bank owned with a listing agent from 30 miles away and they're not familiar enough with the local market to price it a little higher. Or maybe the bank just wants to get it sold fast.

What I'm driving at is that the list price is not always the 'fair' market value. Usually we see that on the other end of the spectrum - where it's too high.  I've also seen $89,000 properties sell for $102,000 and $107,000 homes sell for $121,000 - and pretty recently. And that means they did appraise, folks.

I always counsel my buyers that we need to be ready to move fast. Strong pre-approval is number one.

Also, be ready to scurry to get a bank specified pre-approval. Wells Fargo and Bank of America do this all the time, as do many other foreclosure (REO) vendors. Your buyer can still use their lender of choice, but they better have their info ready for a quick bank pre-approval from another lender.

If you can get your offer accepted quickly you can eliminate the multiple offer scenario. But that's happening less and less.  Many banks don't allow ANY offers for the for the first seven days of a listing. Then it's open only to owner occupants for the next week, then it opens to investors.

I also suggest that you forget about the list price.  Do what you're supposed to do - a CMA on the property. Sure, you take into consideration its condition and its defects, but you need to establish a real value 'as is'.  In some cases your buyer may elect to surpass even that amount. Maybe it's convenient to family or commuting needs. Perhaps it's the school district they really want their child to attend. Perhaps it's an REO property in (gasp!) move-in condition.

Paying a little over fair market value isn't that big of a deal when you're looking at amortizing a loan over 30 years and IF this is the property they want the most. We all get into this lowest price mindset and lose sight of the bigger picture.

Make the terms as painless as possible. Be prepared to eliminate seller concessions towards closing costs if necessary to make your 'highest & best' more attractive. I've seen banks take a lower priced but more streamlined terms offer after they call for highest & best.  That's not the norm, of course, but it does happen.

I do quite well for my buyers on price and terms. But if they constantly lose house after house to superior bids, not so much. We've all worked with buyers that exhibit 'selective memory'. We still have to start from the very first meeting to establish how they will be successful in buying a new home with the least amount of stress, and to fully explain market dynamics.  That's why they chose us instead of another agent.

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.

Preview Properties - Walk For Warmth

Preview Properties has a Community Service Committee that meets to choose various charities for whom we raise money. Every month is a new community group.  Fundraisers vary, but the most popular is either a breakfast or lunch, pot luck style, where agents and staff bring in a dish, then pay to eat!

Tomorrow, Tuesday, January 25th, the beneficiary is the Oakland Livingston Human Services Agency's (OLHSA) 'Walk For Warmth' campaign. And the food theme is 'Chili Cookoff'.  This is a favorite of mine. Not to brag (too much), but I won the last chili cookoff. 1st out of 9 entries was pretty good for me.  Plus I got to rub it in to an agent buddy that is pretty darned proud of his chili. It's all in good humor and of course, the money raised goes to a great cause.

I'll be making my special 'Sweetwater Chili' recipe today because it is slow cooked for a long time and is even better the next day. No matter how I fare this year, Walk for Warmth will certainly win.

And speaking of that program, Erica Karfonta, Director of OLHSA, will be the guest speaker at this Thursday's Brighton Optimist Club Meeting. Erica is coming to talk to us about that program specifically.  The Optimists do wonderful things for the youth in the County, but they also support a lot of other community service and charitable organizations, too. 

If you're interested, feel free to pop in to the Bauery Restaurant at Mt. Brighton at 7:30 am this Thursday, January 27th. First time visitors get their breakfasts free. The Brighton Optimists have an ambitious roster of activities to complete this year and are always looking for like minded residents to join in and help.

Eight States Running Out of Homebuyers?

An article on the Yahoo Finance page, attributed to 24/7 Wall St., has identified 8 states where buyers may have gone on "strike", and coupled with the high foreclosure rate, has caused home prices to plummet.


Using previously released studies and data from sources such as RealtyTrac and the S & P Case-Schiller Index, the authors reiterate claims that home prices will drop another 7%-10% this year and that it may take another four to five years for the housing market to recover.

The eight states listed, in reverse order are:

8. Florida - with a vacancy rate of over 21% and the 3rd worst 2010 Foreclosure Rate

7. Oregon - 10.6% unemployment and more than a 74% reduction in building permits from 2006 - 2010.

6. Georgia - 6th worst state in 2010 for foreclosures and a 10% unemployment

5. Illinois - 1.23% population growth, 5th worst for decrease in building permits

4. California - 4th worst foreclosure rate and tied for 2nd worst unemployment rate

3. Arizona - 2nd worst state for foreclosures and 5th worst for vacancy rate (17+%)

2. Nevada - worst in the nation for foreclosure rate, unemployment and decrease in building permits

And the worst state according to this article? Michigan - my state.

A 15+% vacancy rate, 12.4% unemployment rate and the biggest population 'loser' from 2005-2010 at -2.05%, we know how the travails of the automotive sector have impacted all of us. Many are optimistic that new leadership in Detroit, by Mayor Dave Bing, and our new Governor, Rick Snyder, will start to propel us out of this mess and make some progress.

Of course, the controversial auto bailouts of GM and Chrysler didn't hurt and for now those companies appear to be gaining strength. Ford Motor Company remained in a stronger position and if anything has made even more progress in the last two years. I doubt that we'll ever revisit the years of massive manufacturing production that once were, but Detroit and Michigan are trying to reinvent themselves.

The article suggests that there are buyers waiting for even lower prices and that we may never again see the home prices of 2006, even after recovery. In areas with very high unemployment rates, the inventory of available homes may be too large to be supported. I don't necessarily agree with the 'buyer strike' terminology, although I have heard some potential buyers say they were going to save more money and wait for prices to drop even more before purchasing. It does not bode well for sellers that do not have a good amount of equity in their homes, that's for sure.

A fascinating snapshot, complete with data sources, and an easy read.

Is The Real Estate Market Rebounding?

We measure inventory in terms of "months of supply". Example: If there are 100 units available and an average of 10 units are sold each month (for the last year), that's 100/10=10 month supply. For those of us in the industry, a 6 month supply of homes (or condos) is considered a balanced market. Less than a 6 month supply is a seller's market, longer than 6 months is a buyer's market. Of course, that's a very general guideline, but it works most of the time.

Here's some information that was discussed at my company's sales meeting yesterday. From calendar year 2009 to calendar year 2010, the inventory of detached single family residences (SFR) in Livingston County (MI) dropped by 17.5%, from 8.0 to 6.6 months of supply. Likewise, the condo supply dropped from 7.9 to 5.8, or by 26.5%.

In Oakland County, the SFR went from 7.0 to 5.8, or a 17.1% drop while condos went from a 9.4 month supply to 5.6 months - a whopping 40.4% drop in inventory!

Washtenaw also saw drops, although more modest. For SFRs it was from 7.4 in 2009 to 6.9 in 2010, a 6.6% reduction. Condos went from 9.1 to 6.1 months supply, or a 24.2% reduction.
Now we know that 2010 was still a big year for foreclosures and that not as many foreclosures came on the market for resale. Banks seem to be hanging on to some of the inventory, keeping them off the market. But I don't think that accounts for all of these figures.

We have historically low interest rates (although they are creeping back up), low purchase prices, lower inventory, and judging by our collective calls and inquiries there is strong buyer demand.

My personal experience is that when a property gets to the 'right' price it will create a multiple offer situation. I've recently been in situations where one of my listings had 6 competing offers, another 4. As a buyer's agent, I've been there, too. My feeling is that the housing market is starting to rebound, although we're certainly not in the clear yet. 'Rebound' is in terms of the number of sales, not sales prices, which remain pretty low. What do you think about the real estate market or the economy in general?

Camel Race - February 5,2011

They're at it again! The Brighton Optimist Club is sponsoring its 3rd Camel Race at Crystal Gardens Banquet Center in Howell, on February 5th, 2011. A different kind of Millionaire Party licensed under the Charitable Gaming Division of the State of Michigan (License #M55856), this event will keep you talking for weeks.

Camels that have been adopted by businesses and decorated uniquely, race 6 at a time in 8 different heats. Wagering is pari-mutuel syle, and there are door prizes, 50/50 raffles and giveaways between the race heats. There is also voting for the best decorated camel. $30 admission gets you dinner, drink tickets for either draft beer or house wine, and an evening of fun. Doors open at 6pm and festivities conclude at 11pm. Proceeds are used to support the Brighton Optimist Club's youth and community service activities.

Doors open at 6pm and festivities conclude around 11pm. Tickets can be purchased online via a secure system at the event web site, http://www.bigcamelrace.com/. For more info, email info@BigCamelRace.com.

Great Fun & Community Support!

The Brighton Optimist Club has awarded tens of thousands of dollars in its 33 year history. They do great things for the community and especially for its youth.  This event is a major fundraiser that helps them continue their grat work.

The Brighton Optimist Club is presenting their 3rd Camel Race on February 5, 2011 at Crystal Gardens, in Howell, MI.  Doors open at 6pm, dinner at 6:30pm, and festivities immediately after dinner.

What kind of festivities? Well, as part of your $30 admission, you get the dinner and drink tickets for both draft beer and house wines. Cash bar is available for other drinks.  There will be 50/50 raffles, door prizes and betting on the camels.  There will be opportunities for losing bettors to win 'consolation prizes' between the race heats, too. Early bird? Not worry, this even is usually over around 11pm.

You will get caught up in the betting and racing action. Tickets can be purchased online at the Camel Race web site, or the Brighton Optimist web site, or feel free to drop me an email.

License #M55856 issued through the State of Michigan Charitable Gaming Division. Proceeds go to the general fund of the Optimist Foundation of Livingston County, a 501 c3 organization.

Chemung Hills Golf Club & Banquet Center Sold

Oceola Township (Livingston County, Michigan) approved the purchase of this facility at a meeting on December 27, 2010. The $750,000 price tag includes all equipment and the liquor license.

The facility will be operated by an outside organization but ownership will be retained by the Township and no tax dollars are expected to be used for operations.

This puts to rest the periodically turbulent proposals by investment groups to transform the 150+ acre parcel into either a residential development, or more recently, an RV park.

After a long history as a private club, Chemung Hills could no longer operate profitably in that form. It became a public golf course while it searched for possible buyers.

In 2003, two Farmington Hills developers wanted to convert it to a 300 unit residential project where home prices would start at $300,000. The lack of sewer service made that plan problematic. A 600+ site RV campground proposal came about in 2008, but again, zoning and infrastructure issues prevented it from occuring.

In the fall of 2009, the facility went into receivership and was
operated by Osprey Recreational Properties while a purchaser was sought.

This is a wonderful recreational facility and a great small to mid-size banquet facility, too. Beautiful setting, desirable amenities and good food have always been the standard here.

Oceola Township now has a great  facility that should be self-supporting and will insure that we keep a great local golf course
and banquet center open.

Great News For Buyers!

Legislation supported by the Michigan Association of Realtors (MAR) to allow foreclosed properties to keep their principal residence exemption has passed the House & Senate. This important legislation is expected to be signed into law by Governor Granholm within days.

The high number of foreclosed properties on the market lose their homestead exemption and cost buyers, often new homeowners on a tight budge, a lot of extra money in property taxes. This means they can qualify for lower overall mortgage amounts, and since these buyers often have tax escrows, an have a lower monthly payment, too.

For full details, read the entire legislation at http://legislature.mi.gov/doc.aspx?2009-SB-0077

Shadow Inventory Going Up

A November 22, 2010 report from CoreLogic states that pending supply (shadow inventory) of homes is up more than 10% (2.1 million vs. 1.9 million units) from a year ago. So what, exactly, is ‘shadow inventory’ and what does it mean to us?

Shadow inventory has a couple of parts. The first part is lender foreclosed upon properties that are not yet on the market. We know that the rate of foreclosures is unfortunately ‘robust’, but we’re not seeing those properties hit the market. Hence the term ‘pending supply’. The other part is an estimate based on seriously delinquent home loans. In this case that means homes that haven’t been foreclosed upon, but are 90 days or more in arrears. The likelihood of many of them reaching foreclosure is high.

The bad news for Michigan is that we have one of the highest levels of ‘distressed months supply’, or a high ratio of properties that are 90 days or more delinquent to the supply of total housing inventory, homes that are listed and available to consumers.

If lenders let these ‘pending supply’ properties onto the market in a short time frame, the fear is that housing prices will plummet even further and faster than what we are currently experiencing. That is not good for them or for the economy in general.

It is possible that some of the seriously delinquent homes will be sold as ‘short sales’, and it’s also possible that some home owners will find other ways to avoid foreclosure, but the trend is disturbing. For buyers, this reinforces that it is a good time to buy, especially with the record or near-record low interest rates. Sellers that do not have a strong reason for selling may want to hunker down and try to ride this out, but all industry expectations are that we’re in for a long, bumpy ride to get back appreciating home values.

CoreLogic is a leading provider of consumer, financial and property information, analytics and services to business and government.

The full report can be found at:
http://www.corelogic.com/uploadedFiles/Pages/About_Us/News/CoreLogic%20Shadow%20Inventory%2011-22%20FINAL.pdf

Market Update - Livingston County

Well, we've followed up a couple of 'old style' winters (co-o-old, snowy) with an old style summer - really hot and humid. My flowers are being watered and tended to a bit more than usual, with decent results. The tomatoes are just loving this weather, though.

On the Real Estate front, there's still a good amount of buyer activity, even though the federal tax credit for buyers is pretty much over. Sellers are being realistic about prices (in general) and know that properties are selling at a lower price.

Mortgage rates are very attractive but lending criteria has tightened to make things a bit more challenging. There's still an acceptable amount of inventory available (8 month supply of homes), but not as much as there was a year ago. Those of us that work a fair amount of foreclosures are hearing from banks that they expect a release of inventory at any time - but we've been hearing that for quite a while now.

Property values are still dropping nominally but that alone is an improvement. If you're a buyer, this is still a great time to make it happen. Sellers - I don't expect to see any big upward movement in prices for at least 3-5 years, so if you need to move, do it now while lending is attractive for the buyers and while you can make a good deal on the buying end of your move.

There are more commercial vacancies, just look at any strip mall as you're driving by. There's very little new commercial construction, except for prime locations with pre-lease agreements.

Real Estate Events - Brighton, Michigan

Yes, Preview Properties is at it again. In June and July 2010, they are offering a series of short real estate seminars geared towards the public. On Wednesday, June 16th, it'll be "What's Your Home Worth?". On Wednesday, June 23rd, "Investing In Real Estate". Tuesday, June 29th's topic will be "Careers In Real Estate".

Wednesday, June 14th will be "Buying A Home", a great one for first-time buyers, or buyers that haven't purchased a home in many years. After all, things do change and you want to be up to speed, don't you? On Wednesday, July 21st, it'll be a repat of "Investing In Real Estate". This one has Realtors, Title Company staff and lenders present to answer all of your questions.

All of the presentations begin at 6pm at our office, 130 W. Grand River Ave., Brighton, MI 48116. For reservations, or more info, call Lisa Bohlen at 810-220-1505 or email lbohlen@previewproperties.com.

Preview Properties News

I'm so proud to be affiliated with Preview Properties. They have a standing community service committee and every month we have an in-house benefit for a local not-for-profit group. We've collected over 1800 cell phones for the Cell Phones for Soldiers program, as just one example.

On April 1st, the Red Cross Blood Drive had 27 donors - no foolin'! Even though we have a sizable building, on blood drive days the Red Cross pretty much takes over the building's lobby and conference rooms.

On April 29th, from 5:30-7:30 pm, we're having an Open House and Fundraiser for Gleaners Community Food Bank. There will be appetizers, wine, entertainment and a silent auction. Put this on your calendar and bring your checkbook! This year, one in eight Michigan families will need emergency food assistance. Food collected in Livingston County stays in Livingston County. In fact, we never collect enough to feed our own hungry. Food has to be brought in from other counties to meet our needs.

And don't forget about the Livingston County Association of Realtors' Fill The Gazebo Food Drive on May 1st. Bring non-perishable food items to the Brighton Millpond. There will be people in the center lane collecting food - you won't even have to get out of your car.

Haiti Benefit in Brighton, MI

I just got an email with this info:

Family Photos to Benefit Haiti:Saturday (1/30) 10am-4pm at 124 W. Main St. in downtown Brighton (W4Signs across from Rolison Hardware)

For a $20 donation to the Red Cross for Haitian earthquake relief,The Livingston County Photo Group will take your family (or individual) portrait and provide you the full resolution electronic image via web site access.Come and help us support this excellent cause!Contact Nate Warner (PhotosByNate@gmail.com) for more info!

Is Tourism Bouncing Back?

This from Comerica's Chief Economist, Dana Johnson:

MICHIGAN TOURISM GATHERS SPEED IN FOURTH QUARTER REPORTS COMERICA BANK
DALLAS/January 27, 2010 – Comerica Bank’s Michigan Tourism Index jumped six points in the fourth quarter of 2009, to a level of 94. The current reading is up seven points from the Index’s cyclical low of 87, and marks the highest Index level since the second quarter of 2008. The Index averaged 90 over the course of 2009, down two points from the 2008 average. Third quarter 2009’s reading was revised from 89 to a level of 88.
"After dipping slightly in the third quarter of 2009, our Index has resumed the upward trend established over the first half of 2009," said Dana Johnson, Chief Economic at Comerica Bank. "Given that the fourth quarter surge in our Index was not broad-based, it is quite possible that the Index will pull back from its current reading in the first quarter of 2010. As trends in personal and business travel continue to improve, the generally upward trend already in place should continue over the course of 2010."

"The Michigan Tourism Index is a quarterly summary of six equally weighted, seasonally adjusted travel, lodging and entertainment data series. These series serve as a proxy for statewide tourism activity."

Learn About Property Assessments!

Thursday, Jan 28, 2010 - 6pm, Howell HS Auditorium (1200 W. Grand River, Howell).

Understand how assessments are arrived at, legal requirements for assessments, how to appeal your assessment and more. There will be a question and answer period at the end of the presentation.

For more information: http://www.hamburg.mi.us/assessing/pdfs/presentation%20news%20release%201-10.pdf

Investing In Real Estate Seminar

Preview Properties is hosting the above seminar on Wednesday, January 20, 2010, at 6pm at our office on Brighton. Curious about investing in Real Estate? This program will give you an opportunity to hear from Real Estate professionals about the pros and cons of this investment strategy.

Preview Properties is located at 130 W. Grand River Ave., Brighton, MI. RSVP to Lisa at 810-220-1505.

"Free Foreclosure Lists"

Wow, every Real Estate office that I pass has a banner, marquee, or sign claiming the above. Just stop on in and pick it up. Since I deal with a large number of foreclosures as a listing agent, I thought I'd share a couple of thoughts.

I get calls every day for foreclosed listings that sold two to four weeks ago. They're definitely not being found online. Are offices not updating these lists or are consumers picking them up and letting them sit for weeks before they act? Hard to say, maybe some of both.

If you are interested in foreclosures, here's a few other thoughts. First, properties under $80,000 go very, very fast. If they're financeable, that is in good enough shape, they're absorbed quickly. In general, a lot of homes under $50,000 cannot be financed because they need too much work. Unless you are getting a rehab loan or a construction loan, you'll need to buy cash.

Are you handy? If you are, the above example is OK. If you're not, what good is buying a $20,000 house if you have to hire out all of the work to make it habitable? You might as well spend more on a home that can be financed and perhaps needs only re-decorating. Will you live there yourself or rent it out? Maybe it's a home for an older child. All are OK, but know your strengths and plan accordingly.

Of course, I am biased as a Real Estate Professional, but unless you have done a lot of buying and selling on your own, I strongly recommend that you work with an agent of your choice. They will help you refine your plan, get you listings that are appropriate and guide you through the buying process.

Remember, you have to know what you can handle in terms of repairs and expenses. If you're looking at the low end of the price range, you have to be prepared to act quickly or lose out to another buyer. I am amazed at the number of people buying under $50,000 homes for cash. Your best bet for a successful purchse is to work with a real estate agent that knows bank owned property procedures.

Investing in Foreclosed Properties and Homebuying Seminar

Preview Properties is presenting this session at 6pm on Wednesday, October 21st at the office, 130 W. Grand River, Brighton 48116. For reservations or more information, please contact Lisa Bohlen at 810-220-1505 or at lbohlen@previewproperties.com

Thoughts On Livingston County Real Estate

1. It's getting harder to get deals closed. I've had three deals this year where the buyer's bank folded within 5 days of closing. That means they have to get approved by another lender which is usually not a problem. But two of these three were also using the Dept of Agriculture's Rural Development Program. It's a great option for buyers that qualify based on income. 100% financing, no PMI - what a deal! But it's so popular in my area that the backlog to process has grown.

Banks usually give you a 45 day window to close on a foreclosed property. I've had to get extensions because of Rural Development processing delays. Most of the time that means a $100/day charge to the buyers and one deal fell apart because of that extra cost (20 days x $100/day=$2,000 more).

If you're near to closing, you're likely at 30 days already. If your lender shuts its doors (or the precursor of not taking any more mortgage applications) and you have to switch, it's a real challenge. You find out who the good loan reps are when you get into this kind of situation.

2. Prices are still dropping. Let's face it. Buyers rule. It doesn't matter what the appraisal says a house is worth. You have to price a home well enough to get a lot of buyers through it. When it gets to the right price you get a good offer, or even multiple offers. Some buyers are unrealistic in their (lowball) assessment of value, but those that are tired of looking at homes that need a ton of work will pay a higher price for an updated, well-maintained home. It may still not be at the full appraised value, but it's usually not unrealistically low. A well-motivated seller will make it happen in most cases.

3. Sales numbers are still pretty robust although the average and median prices are dipping due to the high number of foreclosed homes on the market. I've sold quite a few properties under $80,000 this year. many were not in horrible shape and were bought by parents for their young adult children. The plan is usually that the child will rent the home. If they decide to buy on their own in the future, the can work with the parent to buy that home or go out in search of a larger place on their own. The parent still has the property to generate rental income.

The Holidays Are Closing In!

After a summer of spring-like weather, here we are starting to feel like Fall. And looking like it, too. I couldn't help but to compare the sky one day last week with the appearance of winter snow clouds.

Quite striking. And of course, the fire bushes are turning bright red, maples transitioning into their fall palette and flocks of birds flying towards the south. Even the squirrels seem to have picked up their activity level lately. I hope that's not a harbinger of a hard winter. As much as I like all four seasons, last winter was a harsh kick in the behind after many years of being mild.

The season also brings to mind the coming holidays. My office, Preview Properties, always supports the Livingston County Association of Realtors (LCAR) spring food drive, Fill The Gazebo, for Gleaners Community Food Bank. Recently the barrels appeared again in the office and it reminded me that this is a time of year when people on a tight budget have extra bills. Heating and more electicity needs are usually at the top of the list and sometimes they don't have money to buy enough food.

At the local grocery this week, I noticed canned goods on sale for $0.39 each. I bought a case each of corn and green beans, and a couple of other sale items to drop off in the Gleaners collection bin. I urge you, too, to think about those struggling families and make a similar effort. It won't cost much, and your donation will go far.

If you're local to my area, feel free to drop off donations at our office at 130 W. Grand River, Brighton 48116, or at the Gleaners Community Food Bank on Sterling Drive, off Dorr Rd just south of Grand River Ave.

Great Deals

Money is tight for a lot of folks. Here are a few great deals that
I've found in the Livingston County area, which mayhelp you stretch
your dollars.(note:prices below are correct at the time of this blog posting-check
for current prices before driving to them.)

Hair cuts/hair care.Brighton School of Cosmetology offers $6 basic hair cuts. Some fancy ladies treatments may be a bit more but are far cheaper than the local styling salon. They also do manicures and pedicures. Students are doing the work under the suprvision of their instructors. Disclaimer: What's left of my hair is definitely 'low maintenance'. I do know other guys that have more challenging styles who think the service and value are definitely here. It's worth a look. Walk-ins only,approximate hours are 10am-3:30 pm. School is closed on weekends, Holidays and days when Brighton District Schools are closed. 10543 Citation Drive, behind the Kensington Ice House, off Grand River just
east of US-23.

Golf.It's hard to beat these two for a driving range. Oak Valley
Entertainment at 10910 Whitmore Lake Rd, Brighton 48116 (just
north of M-36), has $9 large buckets (90 balls). They use higher end
balls which are washed after being retrieved. Tuesdays between 11 am
and 2:30 pm the buckets are half price! Pro shop, instruction, other
promos - see their web site.

Chemung Hills Golf
Course has $6 large buckets and $3 small buckets all of the time.
What a great value! They have Junior Golf lessons some mornings from
9-11am, so the range may be closed at those times - call ahead. Also a
pretty good rate for 9 holes of golf on weekdays, just $15 with a
cart.

Faulkwood Shores Golf
Club has a very nice course and great prices, too. 9 holes
walking is just $12 and they have specials that are even better.
Example - July 2009 9 holes walking price is just $5!!

Movies.MJR" Theatres
Brighton have some great reduced rates. Fri-Sun before noon,
tickets are just $4. Try the $4.50 Twilight shows (4-6pm) if you
can't get there before noon.

Building Supplies/Furnishings.Habitat For Humanity, 7198 Grand River Ave, Brighton
48114,has a home center where they sell surplus building and hardware
items for very affordable prices. Some furniture is also in the
showroom. Tile, wallboard, light fixtures, cabinets, appliances - you
name it. If your budget is tight and you have a remodeling project
planned, it's worth a look. Hours are 9-5 M-F and 9-2 Saturday.

General Entertainment. Brighton Kiwanis have free Sunday evening concerts at the gazebo in downtown Brighton through August 30th. Bring your own chairs. Varied entertainment (musical), local restaurants are open. Enjoy!!!

Livingston County Summer

Plenty to do locally this summer! This weekend's Michigan Balloon Challenge had great weather. I heard people all around Brighton and Howell talking about either being there or planning to visit. Next up is Brighton's Independence Day Parade on the 4th, now being administered by the Sunrise Rotary Club. Many thanks to the Boy Scouts for handling this event for so many years.

A relatively new addition to the parade is the Hungry Duck Run, actually two runs - a 5K (3.1 mile) and a Half Marathon (13.1 miles). The Sunrise Rotary started this a couple of years ago as a fundraiser for Gleaner's Community Food Bank, and it's great to see it be successful. The name 'Hungry Duck' also fits in with the Rotary's duck race at the Brighton Millpond after the parade. Great addition to the Holiday's festivities.

Next up will be the Howell Melonfest, August 14th-16th.

Dealing With A Computer Failure

In July of 2007 I had to replace a ‘legacy’ laptop. Purchased new in 2001, it served me well. I had indications that it was flaking out and I backed up my data religiously. I didn’t expect another issue like that so soon. The new laptop was great and I was happy.

The laptop that replaced that first one started having issues, too. I found out that there was a recall on it, but the only recourse was to send the entire machine in. Service techs told me it would be “three or four days”, but I know better than that! There was no option for having parts shipped to a local repair shop - my laptop would have to go on the road.

Just then, it started working well again. I thought I had scared it into submission. But I purchased a Seagate FreeAgent Pro backup system just to be sure. It installed easily and did instant backups. If I created or saved a new file, or altered an old one, they were shipped to the backup drive instantly.

I’m so glad that I did that. I had an irreversible failure on the replacement laptop and I just can’t be without a computer for business purposes. So I went out and bought a new one. The retail outlet installed the Office 2007 software that came with the laptop as well as the Norton 360 anti-virus program, and they created the three recovery CD’s for me, too. If you’ve ever created these CD’s you know that it takes a really long time.

So I have a current and complete backup. I can at least see and answer email via my smart phone. Hey, this won’t be horrible, I thought.

I had to purchase Outlook 2007, but the local repair shop I use said that they would install Outlook and transfer my Outlook files for me and I would just have to configure the email settings. No big deal, I thought. While they were doing that, I figured I’d have them take all of my data and picture files over to the new machine, too.

Because of the enormous amount of files and pictures (hi res, of course) that took over a day and a half.

I got the machine back, configured Outlook and started ‘catching up’. Some emails were bouncing back, but not all. The error message indicated that I had a configuration error, but my checks didn’t catch it. Earthlink web support found it quickly and fixed it via ‘remote control’. You give them permission and they connect to your machine via the web and can poke around and change settings. Very cool and very fast.

Then, I discovered that much of my software wouldn’t re-install onto the new machine. The reason? The old system was Vista 32-bit, the new one had Vista 64-bit OS. Great. Even though there is a basic pdf writer on the system, I needed something a bit more robust, so I had to purchase PDF Creator. My Corel Paint Shop 2X (I still had the license key) wouldn’t take the key because it’s a different product (32 vs 64 bit versions). Great.

And I was having trouble finding some of my old software CD’s, too.

At least all of my web based systems worked and I can do about 85% of what I need to do immediately. The upshot is that my laptop failed about 6pm Tuesday night. I spent that evening messing around with it. I went out and got a new laptop Wednesday morning, but couldn’t pick it up until about 4:30 pm because of the setup/install. I went home to install some of what I could, catch up on email, and make an appointment with the local shop for the next (Thursday) morning.

They had the laptop for the Outlook install and data transfer until 7pm (closing time) Friday night. So I lost three full business days and still am not back to where I was with the software.
I also found out that my HP C4100 All-In-One printer/scanner/copier wouldn’t work with Vista 64. Great. Luckily the HP C4400 All-In-One that I had at my office was OK, so I just switched them.

And I thought that I was prepared. Sure, I could jump on a colleague’s machine for a quick venture into my web-based business systems, but it’s not the same when you’re used to working on your own timetable.

After this episode, I thought I’d share some tips for your computer readiness.

First, always, always, always have a good, complete and current backup. Spend the money to do this. If you can’t set it up yourself, pay somebody to do it for you. Make sure that it is working.

Second, don’t be afraid to burn old documents to a CD or DVD for long-term storage, or to move them to an auxiliary (external) drive. If you need to restore your data that will cut down on the time frame involved.

Third, have a central location in which you store your software CD’s, licenses, etc. If you need to setup a new machine you don’t need the distraction of looking for your software, too.
Fourth, when selecting the new machine, understand that there will be other expenses. You may need to buy new software (or at least newer versions). You may need to buy new hardware, like the printer I mentioned above.

Of course, you can try to ‘match’ the operating system. But I believe you have to stay current because technology changes so fast. It makes no sense to me to buy ‘old tech’. I will send in the broken laptop for warranty work and it will go to my wife upon its return, along with the HP C4100 series All-In-One unit. Now I need to get new software to synch with my smart phone and I’m back in business.

You’d Better Believe It’s A Tough Market – We Want Your Blood!

It’s that time again! Preview Properties conducts at least one community service function every month. Past beneficiaries have been Gleaner’s Food Bank, LACASA, The Connection House, The Salvation Army, Family Impact Center, Livingston Educational Service Association, Cell Phones For Soldiers, and of course, the Livingston County Chapter of the American Red Cross.

Please consider a blood donation. This Red Cross chapter provides 97% of all of the County’s blood needs, as well as their emergency services for local disasters and emergency messages for families with overseas servicemen and servicewomen. It’s an easy way to give back to your community.

Our blood drive will be held on Friday, February 13, 2009 from noon till 6pm. The office is located at 130 W. Grand River Ave, Brighton 48116. Parking available along side of the building on St. Paul Street or in our lot, accessed from St. Paul Street between Grand River and N East Street. For reservations, please call the Red Cross at 517-546-0326.

Random Thoughts on Listing Foreclosure Homes

Sure, it's not all bad. But agents listing bank-owned homes work a lot harder on these transactions than you might think. We often have to get utilities on in our names, and pay for lawn and snow maintenance. Here's a few things that happened to me in the last week.

First. An agent called that a lockbox was 'frozen' at one of the condo listings I have. It just wouldn't open. Weird, I thought. Sure, there's no screen door and it's been snowing and really cold, but still. I grabbed the extra set of keys and went over. Hmm. No lockbox. And my keys don't work. What's up?

The Asset Manager for the bank didn't know, either. I called the property management company that the bank assigned, told them the story and they went out to check. They called back and said they couldn't get in either. Locks changed, new lockbox installed and access re-established, though. So I went over, grabbed the extra set of keys and found my old lockbox inside the door. I couldn't figure out what happened.

Then a call from the Condo Association. They were afraid the unit would 'freeze', so they changed the locks to get in and made sure it was winterized. Aagh! All of that for naught. They could have called me and I'd have given them the code to get in. I lost three showings in this little episode. But all is well now.

Second. A showing agent called to report that the door was found closed but unlocked on another condo listing I have, and that she tried to lock it when done, but couldn't get the lock to catch. Drive down there to find the door is out of plumb (bad hinge) and you have to really lift and pull to get the lock to catch. (I mean really, really lift and pull.) I got it to lock and had to make another trip with my tools to tighten the offending hinge.

Third. Agent calls after a showing a bank-owned property. It's a different kind of lockbox that the property management company is using. When the code was entered, the lockbox unlatched form the door. There's a reset lever in back and somehow when re-attaching it, she changed the code to an unknown 4 digit combination and couldn't get it to open to get the keys back in. We arranged a hiding spot for the keys, and I dashed into the office to get a new lock box, take it to the property and put the keys inside. Just when I was planning to sit down with a nice glass of wine and a good book. Oh, well.

Things I've found useful to carry around in my vehicle for foreclosures. Duct tape, clear strapping tape, disposable painters (paper) masks, a 5-cell flashlight and a battery powered lantern, miscellaneous sized pieces of wood to secure door walls or sliding windows if they don't lock, a canister of alcohol-based hand sanitizer, wet wipes and a couple of clean rags. And always carry a pair of work boots, too. Now I'll make sure that I have one or two extra lock boxes with me. And I guess I'll keep my cordless drill and bits in the car, as well. (I could have cut one of the trips out of number 2, above, if I had some tools handy.) In the movie Jaws, Chief Brody has a line that goes, "We're gonna need a bigger boat". If this keeps up I'm gonna need a bigger car.

Selling agents, when you're offered bonuses on foreclosure properties, I really am happy for you. I wish that the banks would understand that the listing agents deserve a little extra, too. We're listing agents, property managers, and in many cases we're acting as general contractors, too, since we have to manage bids, repairs, and re-inspections on some of these properties. It seems like more and more lately.

Oh, and next week I'll be managing the repair of a property that has a foot of water and ice in the basement. No lack of challenges there.

Affordable Homes and Financing Programs

In my market areas, homes are at the most affordable levels in a very
long time. Call it a market correction, a recession or whatever you
like, but homes are now in the best price ranges that I have seen.
Part of the equation is supply.

When I moved to Livingston County in 1988, the big wave of construction was just beginning. We had a marginally tough time finding a home that fit our needs and our budget. Almost immediately after moving in, I saw corn fields transformed into subdivisions, roads widened, traffic signals installed and more retail being developed. The recent wave of foreclosures has also added a lot of homes to the supply with very attractive pricing.

Today buyers can find something that they like without too much difficulty - from starter homes to condominiums to luxury homes.

If you're a first-time buyer or even a 'move-up' buyer, there are programs that can help you. The FHA loan program is very attractive as long as you have a steady source of income, have an employment history and a good record of paying bills.

A marginal down payment will be needed, but the interest rates on this type of loan are very good right now. While the downpayment assistance programs are gone, you can often get the sellers to pay your closing costs as part of the deal - even banks selling foreclosures are
agreeing to that. And you don't need a stellar credit rating, either.

Another option is the U.S. Department of Agriculture's Rural Home Development Program. It offers 100 percent financing but has certain income levels which you have to be below in order to qualify. It's for primary residences (occupied by you), and it's for non-urban areas. If you currently live in a central city or suburb, it's possible that your local lenders won't know about this program, although it has widespread exposure in my market areas.

If you can't meet the tighter lending requirements for a fixed rate mortgage, one of these two programs may be your avenue to home ownership. It's often difficult to figure out which is best for you, so finding a great lender with experience in both of these loan types can make the difference.

A quick internet search found this local lender who has one of the best explanations of the benefits of these type of loans. Check out http://www.44mortgage.com for an excellent primer on these loan types.

Technology – Searching For The Solution, Sometimes Finding It.

Here’s an example of upgrading, going cheap – and paying the price - twice.

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.

Howell Condo Market – Buyers Market!

Whether you’re a Real Estate Professional or an interested consumer, you’ve likely noted that the condo market is glutted and has more potential deals than the larger total housing 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.

More Local Business Good News

It looks like after many consecutive years of warmer weather and patchy snowfall that the local ski resort, Mt. Brighton, will have a great year! They opened earlier than ever before and are making snow like crazy. A week ago today they had a 16” base on the intermediate hill. Today is the first day that all hills will be open.

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!

Some Local Businesses Doing Well

After the daily assault of bad news, it was
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.

Market Observations For Howell Zip Code 48843

For homes in the Howell zip code 48843 (basically the Howell area south of M-59), there are some interesting contrasts between 2007 and 2008.

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.

Clean, Affordable Genoa Twp. (Howell) Condo – Great Condition!

Enjoy life in Hampton Ridge Condominiums. This bank-owned property is in move-in condition, features all appliances, and is conveniently located near the retail area of Grand River Avenue and Latson Road. Only five minutes from Historic Downtown Howell or ten minutes from downtown Brighton’s restaurants, shops and the Mill Pond.

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.

MLS# 28192691, priced at an affordable $79,900!
See more pictures at:Realtor.com listing page http://www.realtor.com/Prop/1105035034

Hear The Bell? It May Be Me!

On Thursday, December 4th, I’ll be joining my colleagues from the Brighton Optimist Club to ring bells for the Salvation Army. We’ll be in front of Taorello’s Market Place, 1007 E. Grand River, Brighton 48116, from 10am - 8pm.

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

I’ve been doing a lot of REO (Real Estate Owned) properties for about two years and I encounter many misconceptions by consumers – at least from my personal experiences in dealing with bank-owned (foreclosure) properties.

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.

Brighton Optimist Club - Free Fishing Derby For Kids - June 7th

This Saturday, June 7th, the Brighton Optimist Club will be holding its 22nd annual Free Fishing Derby For Kids at the Brighton Millpond.

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

Single Family Home sales in Livingston County for the period of January 1st through May 31st have increased by 6% over the same period last year. The average sales price is down 12.9%, but at the end of April that figure was at 13.7%, so it appears that we're moving in the right direction.

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).