This is an interesting statistical view of our current market. The question I had was; “Has the country market recovered to pre crash viability”, like all answers this one depends on perception. The area I do most of my sales in and represent the most Buyers’ is in the country. The parameters used were; the townships above I-69 as well as immediately below and everything over1 acre.

• There were 301 homes sold in 2004.
• In 2005, 222 country houses sold. 
• The 2007 year sold only 203 houses.
• 2010 was up to 249 houses on acreage.
• In 2011, 277 country houses were sold.

That would tell us that the numbers sold has returned. Than when looking at the average sale price we see the real changes in value;

• 2004 average sale price was $180,248.
• 2007 average sale dropped to $ 144,227
• 2008 that average was at $ $126,814
• 2009 saw the average slip to $94,269
• 2011 saw a little recovery to $96,293

These statistics group all together, small home stead’s and bigger farms, shacks to castles. The same criteria were used for all the years. The average Days On Market (DOM) stayed about the same for all the sales, about 100 days. The sold data can be further broken up into types of purchases; cash, land contracts, FHA or VA. 

This is just a small window into the market. If you have more questions please call.

Checking the Numbers

This is an interesting statistical view of our current market. The question I had was; “Has the country market recovered to pre crash viability”, like all answers this one depends on perception. The area I do most of my sales in and represent the most Buyers’ is in the country. The parameters used were; the townships above I-69 as well as immediately below and everything over1 acre.
• There were 301 homes sold in 2004.
• In 2005, 222 country houses sold.
• The 2007 year sold only 203 houses.
• 2010 was up to 249 houses on acreage.
• In 2011, 277 country houses were sold.
That would tell us that the numbers sold has returned. Than when looking at the average sale price we see the real changes in value;
• 2004 average sale price was $180,248.
• 2007 average sale dropped to $ 144,227
• 2008 that average was at $ $126,814
• 2009 saw the average slip to $94,269
• 2011 saw a little recovery to $96,293
These statistics group all together, small home steads’ and bigger farms, shacks to castles. The same criteria were used for all the years. The average Days On Market (DOM) stayed about the same for all the sales, about 100 days. The sold data can be further broken up into types of purchases; cash, land contracts, FHA or VA.
This is just a small window into the market. If you have more questions please call.

What about Real Estate in 2012 ?

 

 

The Wall Street Journal interviewed 50 plus economic forecasters, they all agreed that we are on our way out of the recession.  Here are the main points for and against the housing recovery; these are summarized from Inman news and Trulia predictions.

1. Mortgage delinquencies will go down, but foreclosures will go up. Some of these foreclosures are already sitting empty, only needing to be put on the market. Last year’s robo-signing controversy, in our area called ‘MERS”, is expected to be settled so those houses will be sold.
2. Rents are expected to rise. With more people losing their homes, forcing them into the rentals, that pressure will cause rents to rise. This is unfortunate and will hold back an economic recovery, with the increase in fuel costs and no pay raises expected until jobs return to the area.
3. Jobs, Jobs, Jobs. We need jobs to revive the housing market. In the past housing has led the way to more employment, not this time. People with a steady income are needed to qualify for mortgages to buy homes. Do not expect any Government help; this is an election year during which politicians tend to sit on their hands.
4. A big real estate trend will be more online involvement; more people will realize the usefulness of “Real Estate Company Web Sites”. A wealth of knowledge is just an email away, ask the local real estate agent.
5. Prices are very good for buyers, mortgages are affordable and inventory remains very good. Programs that help with the closing costs are going away, more out of pocket money will be needed.
6. The sellers are learning how to maximize their selling price, painting, cleaning and careful staging will show their house in the best perspective. There will continue to be a demand for ‘Move in Ready’ country homes.

 

 

 

Loving Where We Live

I have been very fortunate to live where I want to be. Having been raised in the country I learned how to weed a garden very early, picking up eggs and milking a cow came soon after. The best way to live where you want to be is to buy a house there. Here is a short list of five great reasons to own a home.

1. On my list is control, which comes with ownership. You can build fences, put up a pole barn for animals or plant trees in your own orchard. Most renters have no (or very little) authority concerning their home, they must ask permission.
2. The orderly security of owning where you live. Knowing that the monthly payment is affordable and will stay the same amount designated by the mortgage, thus allowing the formation of solid financial planning built on predictable expenditures.
3. Neighbors and years of history. Knowing our neighbors, their children and grandchildren requires many years of home ownership. The current job market is tough; families see their young adults leaving Michigan in search of decent jobs. Only by owning a home can the young grow up close to the elderly, having time to develop healthy relationships.
4. Home Equity, which also provides security, cannot grow without ownership. Renters only build equity for their landlord. Time to appreciate, historically at about 4 to 6 percent a year. We hopefully are done with the boom and bust cycles so the more dependable long steady climb of long-term wealth building can work its magic.
5. Opportunities. It is a great time to buy. Mortgage money is available at historic lows; less than 4 percent may be obtained. Home prices are also available at the lowest rates in many years. If you have a steady income talk to a Realtor, we may be able to show you how you can move into your own home next year or move up (or down) into the home of your dreams

Shouting from the Roof Tops!!

This is a Great Time to be a Real Estate Buyer and because of that it is also a good time to sell real estate.

I would, if possible, shout from the roof tops

• “These are the Best of Times to be a Buyer, a remarkable combination of low interest rates with an appealing inventory make a magnificent shopping environment”.

That is, of course, to long a sentence to shout so I will try to tell as many as possible. The two things that work together to make this a  Great time to buy is cheap money,  and a good selection of houses to choose from. Here is a short list of suggested steps, these will work for obtaining a foreclosed house, a Short Sale or a private sale.

1. Choose an Agent that is experienced in short sales and bank foreclosures.  An agent that can guide you through all the required addendum’s and help you understand how the process works. Short sales are really an oxymoron because they take so long to get to close. I know the ‘short’ really refers to the amount of money paid to the bank is less than the bank is owed and the attendants we work with are all paid by the hour. The foreclosures have their own layers of paperwork, most of it is about the bank having no knowledge about the property and are blameless if something does not work or is missing.
2. Get yourself prequalified   by starting from how much you can comfortably afford to pay out each month. Remember to allow for taxes, insurance and utilities each month. I like to work with our local lenders; we have some very good ones.
3. Make your list of must have features and like to haves. Than evaluate the houses as well as the neighborhoods. Does the house have curb appeal, age of roof, newer windows, older furnace, size of lot and size of garage? As well as all the other questions that need answers to help you make a good decision.
4. Now you have found the house you love. With your agents help, you make an offer and negotiate the price and terms. Inspections and appraisals take place; a short sale that could wait months, all others should be about 8 weeks or less.

What Documents Will We Need?

Buyers and Sellers need more documentation than ever. We now need to show who we are, why we need to sell or buy and where are we getting the money from. You will not need to supply dental records yet but that could change in the future. Here are a few of the needed documents

• A current drivers license or a Legal ID is required for the obvious reason of proving you are who you think you are. Both the Buyer and Seller must show proof at the closing table if not before.
• Two years of W-2 forms or Tax returns will be needed as part of applying for a mortgage and qualifying for a short sale. The bank wants to see a stable income sufficiently large enough and consistent to repay the requested loan amount. A Short Sale requires disclosure of all the financial aspects of your life as part of the qualifying.
• Last two months bank account statements. Lenders want proof of a dependable income (if that’s still possible in Michigan) that will help to repay their mortgage. For Short Sales those will help to prove a hardship is present.
• Paycheck Stubs will be required to confirm the current employment of a Buyer. For Short Seller’s this will be part of proving you have a financial hardship.
• A Gift Letter may be required if a relative is helping to supply the down payment and proof that the money was theirs to give. The Seller may also require the withdrawal and deposit statements to track where the money came from. This is to prove it was not mattress money or cookie jar money, this old rule was strengthened by the hunt for terrorist financing.
• Marriage is a form of partnership and as such needs to be documented if the partnership is dissolved. You will need to show a Divorce Decree in that case. If married and selling both partners must be available to sign Proving they both agree to the sale or short sale.

These are just a few of the Hoops currently held up for Buyer’s and Seller’s to get through. There are more, the whole procedure can be very nerve wrecking. Please do not hesitate to ask your Realtor or Loan Agent for their advice or to express your fears. As Professionals we are involved thirty, forty or more transactions every year, we really do understand and are willing to do whatever we can smooth the rough parts. Just ask, we can turn the light on and chase away the shadows.

Should we sell now? Will prices come back up?

Questions heard more often lately and the answers depend on circumstances. The available financial resources and the security the family’s employment are two of the biggest. Selling before being forced to will allow a faster recovery from potential loss. Do not become a statistic; please let us help with a short sale.

The article in the New York Times last week was about jobs. When will the unemployment drop below 5% in Michigan? The study results referenced in that article used a map of the United States with each state bearing a color matching the year job recovery was achieved. Several different factors were used as indicators of job creation; the new jobs will not be the same as the old, retraining will be necessary.

Michigan and Nevada were the two States expected to recover last, out beyond 2017. This is not good news for the families waiting for the home price recovery; current prices are the reflection of future prices. Monetary inflation will do more to increase home values than demand will.

As home prices have fallen, the pool of underwater mortgages has risen, from the Detroit News last week. Homes that were purchased in ’05′, ’06′, or ’07′ and the homes which had all the equity drawn off them in those years, are  unlikely to regain that lost value.

Almost 10% of Michigan mortgage holders, according to the Mortgage Bankers Association, are having trouble making their payments. Michigan ranked seventh nationally in overall delinquencies. With rising Taxes, insurance rates and the budget breaking gas prices, families are having money problems.

Five more reasons to buy a home now.

Here are Five More Reasons to Buy a Home Now.

• Renting is not such a good deal. Unless you need to be mobile while deciding where to stay for a few years. Many families cannot buy now because they have lost their house through a foreclosure or short sale, renting is the only option while rebuilding their credit. Two or three years of paying bills on time will prove credit worthiness allowing them to qualify for a mortgage,
• The biggest drops of the falling house prices are over. Home values have cratered and will be very slow to regain the previous highs. The S&P/ Case-Shiller index of 20 housing markets across the country show the market average is down 32% from the peaks of 2006. There are no roaring price gains on the horizon yet, prices are expected to stabilize for the long haul.
• This is a repeat because Mortgage interest rates are so important. A mortgage is available to anyone that qualifies of under 5% on a 30 year rate. This goes a long way towards making homes affordable for families.
• On the same note about mortgage availability; Realtors have been warned to inform their clients “Mortgages will be harder to qualify for in the future. Our Government will try to shift Fannie Mae and Freddie Mac out of the mortgage business and hand that role over to private banking. That will make higher credit scores and bigger down payments likely in the future.
• Last but not least, by buying now you will find less competition than in the future. There are lot of houses for sale, a large inventory of homes to look at in most of the price ranges and I think the banks are still holding a large portion of the “Shadow Market” of houses in the redemption period. These houses will slowly show up for sale in the coming years.

Reasons to buy Now.

There are at least _5_ Reasons to Buy Now.

1. The Lowest prices seen in several years. This may not be the bottom,  no one can know when the prices will start inching back up. There is an abundance of fordable  homes on the market.
2. Interest rates are at historically low levels. Money is currently available for a 30 year fixed rate mortgage around 5%. Mortgage rates do vary on a day to day basis but the rates remain at very attractive levels.
3. Currently low interest rates are expected to go up as the economic recovery gains momentum. A one percent rise in the interest rate will off set a 10% drop in the price of a house and add hundreds to the monthly mortgage  payment.
4. Low Down Payment Mortgages are Available now and Lending qualifications will become tougher in the future.  In an effort to stimulate the market and get us past these falling prices banks have eased the lending standards recently. The pre-approval is easier to obtain now, banks will allow a higher debt to income ratio.
5. Motivated private home owners in some cases are desperate to sell. Which brings the “Lived-In” homes near the low prices of the foreclosed homes even though the private sales are more appealing.

It is important to understand that the Cost of a home could go up even though the price of a house goes down.  Fannie Mae, Freddie Mac and the National Association of Realtors are projecting approximately a 1% increase in Mortgage rates over the next year.

Michigan’s recovery ?

The Housing market in Michigan is weighed down by that Foreclosure market. A Google search of foreclosed properties of Michigan gave me 549,000 results. The reduction in home values we have seen is Historic and real. Sure, home prices will eventually go back up as job seekers come trickling back into this state. An annual average inflation rate of 5% will move the prices up a little every year, it will not be the same.

The housing boom years are gone, like the S&L debacle and the ENRON shellacking of years past. Maybe history will name this the Foreclosure Fiasco, or Private Estate Ruination, how about Home Equity Banishment. Whatever name the historians decide this consequential period of time, that has witnessed so many people lose so much, deserves to have a name.

Families are the real losers in a foreclosure. Yes, I agree, the parents are at fault to a large degree. The Banks that encouraged borrowing %130 of a house’s appraised value there by robbing all the future equity shared the fault. The big problem is this time no one group can be singled out and put on trail. That money was borrowed against a future never realized gain to finance new cars and vacations to Disney Land. The American Taxpayer once again comes up holding the bag and will pay to cover all the losses