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Sunday, June 29, 2008

Top Places to Buy an Old House

This Old House magazine is always searching for great places to buy old houses. In the July issue, the magazine identifies 12 neighborhoods nationwide that it considers the best old-house neighborhoods in the United States.

The winners were chosen because of their architectural diversity, the preservation momentum in the area, and neighborhood amenities, including walkability, services, and the level of community. The magazine also identifies dozens of other good neighborhoods.

Here are the magazine's top 12:

Centre Park Historic District, Reading, Pa.: five-bedroom townhouse can be purchased for about $60,000, a large Queen Anne for $135,000, and a mansion for less than $600,000.

Hampton Heights Historic District, Spartanburg, S.C.: homes range from $50,000 for a 1930s Arts and Crafts fixer-upper to $250,000 for a restored Queen Anne.

Galena, Illinois: a Greek Revival or Second Empire home can be bought for as little as $130,000.

Kempton's Corners, New Bedford, Mass.: prices run the range in this area, starting at $180,000 and then running as high as $800,000 for a Victorian.

Old Louisville, Ky.: a rehabbed manse might cost about $275,000, with prices topping out at $800,000.

Pleasant Ridge, Mich.: prices range from the low $100,000s for a modest bungalow to more than a million for a big Colonial Revival or Tudor.

Victorian Flatbush, Brooklyn, N.Y.: fixer-uppers are available for $600,000 to $900,000; a restored home will run you upward to a million or more.

Albany, Ore.: home prices in Albany's national historic districts range from $90,000 for a run-down Italianate to $400,000 for a fully restored one.

Georgetown, Texas: price tags on fixer-upper bungalows can be purchased for as little as $90,000; grander homes can run in the millions.

Centralia, Wash.: homes in the Edison District range from $250,000 for an 1,800-square-foot Craftsman to $600,000 for a massive Queen Anne.

New Castle, Del.: a brick Federal in good shape will run you $385,000, while large historic homes with river views cost close to a million.
Washington, Ga.: Antebellum mansions run as low as $350,000, while a 2,000-square-foot Victorian cottage might go for $130,000.

Long-time readers might know that I live in an old house (1885) in Milford, MI, which I consider to be one for the best places for old houses in our area. Our old houses run from $110,000 for a basket case that needs lots more than a little TLC, up to $400-500,000 for our biggest mansions that have been thoroughly updated. Our village's walkability score is great, with a quaint downtown and great restaurants.

Other good places to look for old houses locally are Birmingham and Northville (a bit pricey), downtown Farmington Hills (also pricey), Holly (many homes need a lot, but the stock is good), Howell (same comment as for Holly), and Brighton (same comment as for Holly). A bit further out, Fenton and Linden have some nice old homes, along with many dumpster queens.

In my travels, one place that I thought had great old houses is Savannah, GA. The problem is that they are almost all well over a million dollars now. I suspect the same is true in Charleston, SC, too.

I've got some good information about buying old houses on my Web site - http://www.themilfordteam.com/ - as well as links to lots of sites with helpful old house information. Send me an email or give me a call if you're interested in an old house in this area.

Saturday, June 28, 2008

The appraisal blues...

Even though Fannie Mae and Freddie Mac have supposedly removed the "declining markets" penalty in our area for their purchase of loans, they may not have sufficiently gotten the word out to the local appraisers community. I've had three deals go south lately because of low appraisals. Admittedly pricing homes in this market is tough, but the fact that appraisers use sold homes only (pending if they can get a projected sale price) adds to the issue, since sold homes represent a historic view and do not reflect what is happening currently in the market. The appraisers will likely lag an upturn by 2-4 months, before enough new sold data works its way into the system. People who sell during that lag would face appraisals that are based upon old, bad data (bad in the sense that it won't reflect the current market).

The other issue is that the appraisers have to work from a data comparison point of view. They usually go see the subject home and they may have seen one or two of the comparable homes, but in many cases they are just using MLS data about the comparable homes to do the appraisals. They means that condition largely gets left out of the equation. That also means that foreclosed homes may work their way into the equation, because they may represent a significant portion of the "local market" that the appraiser has to use.

So, what does this do to real estate sales? Well, it sinks a lot of them. For now, the appraisers are just doing what the banks tell them to do, i.e. appraise conservatively vs. being optimistic about the future appreciation of the home. So, even if the buyers and sellers have arrived at a price that makes both sides happy; if the house appraises lower than the sale price and the deal can't get bank approval, it won't fly. Even if the appraiser asks for the help of the Realtors involved to identify local comparable sales, it may be that the house being appraised is the top dollar house in its category, so finding other examples could be impossible, even for the Realtors.

The options open to the buyers and sellers if the appraisal comes in low are few and painful for both sides. Of course, the sellers can just accept the appraisal and concede the difference to reach the appraised value. Or, the buyer could be adamant about buying the house, not matter what (I've only had that happen once) and make up the difference out of his/her pocket. Or, both sides can kick-in on the deal to make it work - the sellers can reduce the price that they will accept and the buyers can put more money into the deal to reduce the loan exposure of the bank. That's how we resolved one of the deals that I had. The other option is that everybody walks away, which unfortunately happens more often.

If the deal falls through, the seller is left in an awkward position. He/she now knows what the place appraises for, which is not likely to vary by all that much on the next appraisal (if it is fairly soon). Leaving the price up at a level significantly above the appraised value makes little sense, unless a cash buyer can be found who doesn't want an appraisal (highly unlikely). The seller may consider taking the place off the market or at least pricing it so that reasonable offers would come in at or near the appraised value. Taking the place off the market is not an option for most sellers these days. At least the seller will know how badly he/she may be under water, if that is the case for them.

For now and the foreseeable future, the appraisal is as scary a part of the sales process as the home inspection - both can turn up issues that sink the deal. That has always been the case with the inspection and just recently with appraisals. Both involve lots of unknowns that are out of the control of the parties involved in the deal. We won't get back to more "normal" times with appraisals until the market settles and starts back up in values. Then both pricing for the market and appraising should be easier and more consistent.

Friday, June 27, 2008

Pets can kill sales

Don’t let your pets kill the sale of your home. As much as many of us love our pets – dogs, cats, birds, whatever – they can cause problems when it comes time to sell the house. One of the main reasons has to do with how convenient it is for buyers to see your home. There can be issues caused by the pets that make seeing your home more difficult than viewing other properties. For instance, if sellers have to be called first before their home can be shown this can make it less appealing to buyers and agents.


More than once, while out showing houses, I’ve stumbled upon a house that my buyers wanted to see. When I called the listing company they told me that I couldn’t show it because the owners required notice (a few hours to a day, in some cases) in order to deal with pets (most often dogs) in the house. Needless to say, I did not show those houses. In the market that we are in, making your house less convenient to show is a definite killer. Agents don’t have time to deal with homes that require all sorts of special advanced notice.

It's not just access to viewing the property that causes the problem. Sometimes, regardless of how friendly the pet is, potential buyers can be reluctant to enter the home. Hearing a barking dog, while trying to get the lock box open, is a definite turn off; especially, if the dog sounds like it is just inside the door. More than once I’ve cracked open the door and been growled at by a dog. I did not go into those homes. Even if the dog is crated, sometimes they can make such a racket barking that it makes the buyers uncomfortable and often shortens the visit. Sometimes owners will lock a dog in a laundry room or the garage and put a note on the door. That puts those rooms off-limits and compromises the visit, too. It’s better to either remove the pet (use a pet day care service if needed) or put them somewhere on the property that won’t be visited.

Even if the pet is caged or friendly or maybe not even there, if the house smells anything like a pet, it is a definite problem because non-pet owners are not sure that they can ever get that smell out of the home. Some buyers are also allergic to pet dander or hair, even if the pet isn’t there and the place has been cleaned. I’ve had clients who could tell me almost immediately if a cat had EVER lived in the house.

I’ll admit that, as a dog owner, I’ve probably gotten used to the dog smells that are in my house, so I don’t even notice them when I visit other homes with pets. I can usually smell a cat litter box if it needs attention. I’ve had houses listed where the owners did such a good job of cleaning and deodorizing that you couldn’t tell that a pet lived there. I’ve had others that I had to apologize ahead of time for what the lookers were about to experience.

The other aspect of pets hurting your chances to sell has to do with the damage that they can cause. The most obvious are the spots all of a carpet that indicate that Fido isn’t house broken. The seller might as well just offer to replace the carpeting up front, because the buyers will demand it. Dos or cats that scratch up woodwork around doors or along the floor also hurt your chances to sell. Replace any scratched up woodwork. Dogs also damage wood floors with their claws when they run around and you may have to have the floors refinished. Cats often ruin drapes and curtains and may damage blinds (as will dogs).

Pet owners will tell you that they love the little rascals and wouldn’t live without them; however, they may end up living with them for a long time in a house that they want to sell unless they can get control over the situation and take Fido or Tabby out of the sales equation. Don’t let your pet kill the deal on your house. About the only pet that I can see adding some value to a visit would be to have a horse or two around, if the property is horse-oriented. Horse people like to see horses standing around in the pasture and they expect the smells that go with that.

Thursday, June 26, 2008

NAR Market Forecast

Reading, and making sense of, the latest Real Estate Market Forecast from National Association of Realtors Chief Economist Lawrence Yun is more difficult than keeping track of the plot twists in a daytime soap opera - it's up, it's down, this is good but that is bad. When you're through reading it you don't know whether to be happy or concerned. Economists are good at that sort of language. Do you remember the speeches that ex-FED Chairman Alan Greenspan used to give?

Anyway, what Yun said was that pending sales were up in May, which sounded good. Then he went on to say that sales that are pending are actually closing at a much lower rate these days, and that is bad. The there was the bad news that the inventory level rose again to record levels, with 4.55 Million homes on the market - an 11.2 months supply, according to Yun. But the good news was that part of that was due to seasonal factors (warmer weather), which was expected. Of course the bad news was that the increase was larger than expected. But the good news is that home sellers are pricing the homes more realistically now, which is caused by the bad news that home prices continue to fall. You get the picture. Yun continues to see prices dropping for the remainder of this year.

More good news was the removal of the "declining market policy" by Fannie Mae and Freddie Mac. Fannie and Freddie had imposed the "declining market policy" which required a higher down payment and higher credit scores in lending regions where prices had been falling (that would include our market) and the policy become a self-fulfilling prophesy and further reduced housing demand. DUH! Finally, someone pointed out that Fannie and Freddie were created with the mission of providing credit in times of crisis, so they decided to do away with the restrictive policy in June. Since these same policies drove appraisals down (appraisers were told to take an extra 4-5% off the value due to the “declining market” designation), it further exacerbated the bad situation. The other good news concerning Fannie and Freddie that is impacting the market is the increase in their jumbo mortgage limits, which allows them to make bigger “conforming” loans, without having to charge a jumbo loan premium.

Yun also pointed out that higher FHA limits have helped too and that more borrowers who might have taken out sub-prime loans a year or so back are now using the FHA programs. He noted also that we are likely to see more bills make it to the Presidents desk to help give strapped homeowners a break or at least some relief against being foreclosed. One part of the expected bill would give home buyers a tax credit to encourage fence-sitters to get off the fence and buy a house.

The bottom line for Yun is that he thinks the second half of this year will show improved sales, although he’s less sanguine about prices. In other words things will get better…unless they don’t. Economists – you gotta’ love ‘em. I suspect that every PhD Economist had to minor in double-talk in order to graduate. Maybe Yun and other economists should resort to paraphrasing that great philosopher Yogi Barra - Things will get better, when they're better.

Wednesday, June 25, 2008

Get in the game...


From a recent real estate news feed that I get come these tid-bits about why it’s a good time to buy -

While pundits have been calling for a bottom for months, the fundamentals suggest we're close, because the bad news taken as a whole is worse than it seems.

Wholesale and retail prices are up on oil speculation. Seventy percent of futures traders in oil are speculators. What goes up will come down again.

Home prices have receded in 260 markets, but only 4.6 percent from April 07 to April 08, says the Office of Federal Housing Enterprise Oversight, which oversees Fannie Mae and Freddie Mac. That's a far cry from Case-Shiller's findings for 20 U.S. metros.

During Black Monday of 1987, the Dow lost 22 percent of its value, so we have a ways to go to match that.

During the recession of the early 90s, unemployment was two percent higher than it is now, so this housing slump is not job-driven, but speculation-driven.

Buyers who have good credit have access to the widest selection in homes since the '90s. They have interest rates three points below the average.

According to the housing reports, housing is still declining, but the pace of declines is slowing, which suggest we're near the bottom.

And here's the good news. Harvard's Joint Center For Housing Studies says that although recessions exacerbate housing downturns, there's usually a quick recovery.

It’s hard to tell sometimes from these stories whether the authors are reporting things as they are, or wishing for how they’d like things to be. I suppose the numbers that they report from various sources are accurate; it’s their interpretation of what those numbers mean that can reach different conclusions. Locally, I’ve been reporting that things have picked up in the market (even if the pick-up has somehow missed the Village of Milford).

I do believe that it’s a good time to buy. There are some great deals out in the market right now – on both foreclosures and regular sales. There is a very good inventory to choose from; and, even though money is tighter than in the past, if you have good credit the rates are still attractive. The new, higher FHA limits have put much of the market within reach with an FHA loan, which only requires a 3% down payment and has lower rates than conventional loans.

Now is also the time to get a new home and be into it and settled, before the new school year starts. So give me a call and let’s get out there and start looking! You've got to get into the game, if you hope to win.

Monday, June 23, 2008

What's happening with my little Village


Yesterday I reported the good news that sales in the area that I track are up and that the number of regular homes selling (not foreclosures) is the highest that it's been in quite some time. All good.

Then I noticed that there has only been one sale in the Village of Milford for all of June and not that many in the Township either. I looked back over the last few months and that has been a consistent trend. I track four Townships - Milford, Highland, White Lake and Commerce - and the Village of Milford. Highland, White lake and Commerce Townships have all had fairly good sales - 15-25 per month almost since I started tracking them; however, Milford seems to be stuck at sales of less than 10 for both the Village and Township combined. There are 79 homes for sale in the Village alone, so you would think that more than one would sell in the month, by now.

I suspect that some of the cause can be laid at the doorstep of the higher taxes in Milford, certainly in the Village at least. In these economic times I get ask all the time about taxes and why they are so high in Milford Village. I explain the higher costs of maintaining a public water and sewer system and of the library and police and the other things that help make Milford a great place to live, but many people are just interested in lower cost, no matter how little they get for their tax dollars.

Milford is a quaint little place to live, but not a cheap place. I suppose it's all relative. Many people come to Milford from much more expensive neighborhoods in Southeastern Michigan and some come in from other states where the cost of living is even higher. But, people coming to Milford from rural counties in Michigan will be in for sticker shock.

So, the Village of Milford will likely suffer for a while and with it the homeowners who are currently trying to sell. Village residents have been reluctant to lower prices in line with what's happening in the market overall. Indeed Milford Village homes have always enjoyed some price premium, mainly due to the walkability of the Village and the attactiveness of the downtown; however, like local lakefront homeowners, even Village owners will have to get in line with the market or suffer prolonged sales periods.

Sunday, June 22, 2008

Good News in the Numbers


Those of you who have followed this blog for any length of time know that I collect and share a number of statistics about my little corner of the market here in the Milford area. For the last year or so; every week, when I looked at the numbers, foreclosures have been running between 40-60 percent of the sales that took place in the previous week. One week, a while back, I even reported that foreclosure sales made up 100% of the sales for the week. It was somewhat depressing, but it was just a reflection of the market and the times.

This week I can report GOOD NEWS! There were only 5 sales out of the 24 that took place last week that involved foreclosed homes - just 21%. That' fantastic and I hope it is an indication of the market turning and of things to come. You can go to my Web site http://www.themilfordteam.com/
for all of the statistics for last week and to get a Y-T-D summery of the market. There are lots of other states there too.

Why this is important is two-fold - 1. the number of foreclosed houses may be dropping locally and 2. it means that lots of regular houses at more normal prices are selling. The later is reflected in the higher Median sold price for last week. In either case it is good news and means that the market may be moving back towards more balance. While it was good for buyers to have so many foreclosed houses on the market, it was pure hell for sellers to have to compete against the low prices that the banks were dumping those houses at. Many buyers discovered that many of those houses weren't all that great of a bargain, when they assessed the shape that many are in.

One week does not a trend make; however, any flicker of hope for a return to a more sane market is worth celebrating. Yea!

Wednesday, June 18, 2008

Busy, busy, busy...

I've been busy lately, and that's a good thing. The real estate market locally has picked up considerably. I sold a couple of houses in the last 10 days, which is a very good thing. And, I have several sets of buyers with whom I am looking. I have 3-4 potential sellers mulling over getting into the market, too.

What has spurred all of this activity? Well, I'd like to think that it's my magnetic personality and the success of my great marketing campaign; however, a good deal of this increase is due to the fact that the market has heated up for the summer AND sellers have become much more understanding and accepting of the market that they face today. I still hit a few potential sellers who just can't deal yet with the losses that the market has inflicted over the last 2-3 years. Like most Realtors today, I'm choosing to pass on those "opportunities", rather than waste a lot of time and money listing yet another overpriced house.

Still, a portion of what has made me so busy lately is, in fact, the result of my marketing efforts, especially those on the Internet. I've had one that one buyer find me lately after they had "Googled" a search for "Milford Michigan". when you do that, my http://www.movetomilford.com/ comes up on the initial results page - pretty cool. If you Google Milford Realty or Milford Realtor, my http://www.themilfordteam.com/ site comes up - also very cool. So I'm getting buyer traffic off the Web, which was certainly a goal of having put the time and effort into those sites. My http://www.mihomebuyer.com/ site for first-time home buyers has yet to generate much traffic, but it will eventually.

So, I can accurately report that things are picking up locally in real estate. The summer months are always our best months, but I believe that some of the increase is just due to pent up demand matching up with the great deals that are out in the market right now. It's a great time to be a buyer. And, if you're selling or need to, now it's the best time in the last 12-15 months to get on the market. You want to be listed while the buyers are out looking. And. please, call me; I'll never be too busy to answer your call and see how I can help you sell a house or find a new home. And, if you have relatives, friends or neighbors in my little corner of southeastern Michigan who need real estate help; please refer them to me - both you and they will be glad that you did.

Sunday, June 15, 2008

Stats and forecasts


It's that time of the year - the mid-point - when all of the forecasters do an update and mid-year forecast correction for the rest of 2008. The article below came from the news feed that I get from the National Association of Realtors.

A modest gain in the level of home sales is possible over the next couple months, and an improvement is forecast for the second half of this year as more buyers are able to access affordable mortgages, according to the latest forecast by the National Association of Realtors®. The Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in April, rose 6.3 percent to 88.2 from a reading of 83.0 in March. It’s the highest index since last October, but remains 13.1 percent lower than April 2007 when it stood at 101.5. The PHSI in the West rose 8.3 percent to 98.8 in April and is 4.0 percent higher than April 2007. In the Midwest, the index jumped 13.0 percent to 83.7 in April but remains 13.1 percent below a year ago. The index in the South increased 4.6 percent to 88.8 but is 22.5 percent below April 2007. In the Northeast, the index declined 1.9 percent in April to 79.3 and is 12.2 percent below a year ago.

Lawrence Yun, NAR chief economist, said pending sales contracts have picked up notably in areas undergoing significant price drops. “Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines, but it’s unclear if they are investors or owner-occupants,” he said. “Sharp price reductions are leading to a quicker discovery of price equilibrium points. The West is already seeing year-over-year gains in pending contracts.”

“Although mortgage interest rates will remain historically favorable, they will start to steadily inch up,” Yun said. The 30-year fixed-rate mortgage should rise gradually to 6.3 percent by the end of this year, and then hold at that level for most of 2009. Yun said the underlying fundamentals point to a pent-up demand. “Home sales are at about the same level as they were 10 years ago, yet the population has grown by 25 million people and we have over 10 million more jobs,” he said. “The housing market has been underperforming by historical standards, partly because buyers were hampered by mortgage availability issues, but that’s improved and an upturn is more likely. On the other hand, it’s unclear what role consumer confidence will play in the coming months.”

Existing-home sales should increase from an annual pace of 5.05 million in the second quarter to 5.83 million in the fourth quarter. For all of this year, existing-home sales are expected to total 5.40 million, and then rise 6.3 percent to 5.74 million in 2009. “Sales gains will be greatest in areas that underwent sharp price declines,” Yun said. New-home sales will probably fall 31.7 percent to 529,000 in 2008 before rising 12.5 percent to 595,000 next year. Housing starts, including multifamily units, are projected to drop 27.2 percent to 987,000 this year, and then slip 0.6 percent to 980,000 in 2009. “Rising construction costs will provide less room for price cuts on new homes,” Yun said. The median new-home price is forecast to decline 3.1 percent to $239,500 in 2008, and then rise 5.4 percent next year to $252,400.


So, there's hope on the horizon for a sustained turnaround in the housing market and perhaps the economy overall. Let's all hope so, since the current market is getting really tiresome. I'm seeing a greatly increased level of activity locally on both the buy and sell sides. There are lots of buyers out right now, trying to scoop up bargains before the market turns. And, sellers have now been inundated with enough news and information about the market that all but the most stubborn are ready to price their homes to sell in the current market.

Wednesday, June 11, 2008

Situational ethics?


From one of my real estate news feeds comes a story about a new and troubling phenomenon in the real estate market.

Some borrowers who are struggling to pay their mortgage and are dealing with big drops in property values are avoiding their problems by committing what some call fraud – and others call smart.

These owners are using their good credit rating to buy a second home at a lower price, assuring the lender they’ll rent out the first. But what they really end up doing is walking away from the first home, leaving the lender holding the bag.

Lenders call the phenomena “buy and bail.”

In some cases, real-estate practitioners and brokers who see nothing wrong with it coach home owners through the buy-and-bail process. Some blame the phenomenon in part on lenders' unwillingness to cut deals or restructure loans made when home prices were inflated.

"It's just a business decision," says Linda Caoili, a Sacramento real-estate practitioner. "If you're upside-down $250,000, why would you keep it? It just doesn't make sense."

The trend may be short-lived. Under revised Fannie Mae guidelines, which could take effect next week, loan applicants who claim they will rent out their first home will have to produce supporting evidence, including an executed lease agreement. Borrowers also will have to prove that they can pay the mortgage, property taxes, and insurance for both residences. The guidelines will make an exception only for borrowers who have at least 30 percent equity in their current home. Of course, some individuals still can qualify for that second loan because of a strong credit and cash position.

The position taken by Ms. Caoili seems to point towards a larger issue of the mores and norms of our society starting to break down. There was a time (and I guess I came from that era) where one stuck out tough situations and worked your way through them, even if it involved hardship and/or personal sacrifice. Now days it seems all too easy to just throw things away – appliance or kitchen gadget having problems, just toss it and buy a new one; got problems in your marriage, just get a divorce and find a new spouse; having trouble making your house payments, just walk away and buy a new house. Nobody wants to work ate fixing things or making them right anymore. I suppose it’s all a part of our “me-generation”, instant gratification, and throw-away culture; but, that doesn’t make it right. This buy and bail phenomenon is just what it has been labeled by some – a form of fraud.

I do feel a lot of sympathy for those who, through no fault of their own really, have gotten swept up in the tide of foreclosures and falling home values. I have heard more stories of innocent, albeit a bit na├»ve, people getting caught by the toxic ARM problem. Perhaps they should have been more prudent with credit, but many of these people have been hit by the double whammy of rising rates and falling values, in addition to things like rising energy and health costs and lower wages or loss of overtime. It doesn’t take much in each area when all of those factors come together in the perfect storm to work against a struggling homeowner.

I suspect that, if they would just look, the banks would find that most of these people are honest, hardworking folks who would become model borrowers, if they were allowed to work out a plan that they could afford. These people don’t want to lose their homes. They don’t want to buy and bail. They just want to catch an honest break and get back on their feet. Let’s hope that some of the banks start to realize that and push harder on programs to help, rather than to foreclose.

Tuesday, June 10, 2008

Foreclosures Become Maintenance Burden


From one of my real estate news feeds come the story below on one of the issues that surround foreclosed homes – who does the upkeep? This is certainly an issue inthis area, with so many foreclosed homes.

In neighborhoods all over the country, homeowners' associations, neighbors, and political officials are taking over maintenance on foreclosed homes. One reason is that figuring out who actually has responsibility for maintaining the property is difficult. Massachusetts is attempting to help local governments in the commonwealth with a statewide database of foreclosed properties that includes contact information for the lender and the party that has been hired to manage the property, says Daniel Crane, Massachusetts undersecretary for consumer affairs.The neighborhood do-it-yourself approach may not work because being a good neighbor and mowing the lawn is, legally, trespassing, says Donald Isken, a real estate lawyer in Wilmington, Del. "I always tell people, if you can avoid the self-help remedy, then you can reduce your exposure to personal liability for property damage," Isken says. In some cases, homeowners' associations have the authority to do the remedial work necessary, Isken says, but the process to allow the association on the property takes time, "so the neighbors have to live with an eyesore.”

We have this issue on my block in Milford, with neighbors pitching in to at least keep the yard mowed on an abandoned property that is in foreclosure. Bigger issues can arisewhen storms cause damage or when vandals break in to empty foreclosed homes. More than once I’ve had irate neighbors approach me as I was showing a foreclosed home to ask if I was the listing agent. They were up[set at the state of the yard and needed to vent on someone.
Even the listing agent isn’t the right person to complain to most of the time. The banks usually hire a Real Estate Owned (REO) management company to manage those things and to winterize the houses during the winter. That’s who you need to get to, if you have acomplaint about a foreclosed home in your neighborhood. The listing agent should at least be able to give you contact information about that company.

Saturday, June 7, 2008

Statistics looking up

In May, the local multi-list service that I belong to - Realcomp - released the stats for April of 2008. Once again, for the fourth straight month, the sales figures for April, 2008, were up when compared with April of 2007. For the first four months overall, the MLS recorded an increase of 10.84% over the same period for 2007.

Specifics for April included:

Area/........April 2008.....April 2007......% Change
County..........Sales..........Sales

All MLS.........4,671...........4,064........14.9% up

Detroit...........932.............544........71.9% up

Livingston........161.............165.........2.4% dn

Macomb............861.............751........31.6% up

Oakland.........1,102...........1,003.........9,9% up

St Clair Area.....102.............118........13.6% dn

Wayne...........1,774...........1,418........25.1% up

The Realcomp people sited the fact that more homes are being priced to sell in the current market, that interest rates remain at historically low levels and that the good spring weather has finally brought out the buyers. On the negative side they sited the continuing credit crunch and tightened bank lending. All-in-all, at least in Macomb Oakland And Wayne Counties things are looking up.

This is a ray of sunshine in and otherwise dreary real estate landscape, so let's hope that it indicates a real trend and that things are turning around locally.m We're no longer number one in many of the bad categories like foreclosures. Let's hope we can be number one in the rebound and recovery category.

Friday, June 6, 2008

Foreclosures still high


In today's Oakland Press, Charles Crumm reported that foreclosures were higher again last month than the same month a year before - up 35.4% to 792 in May, 2008, as compared to only (a relative term don't you think?) 585 last May. According to Crumm, we are on apace to set a new record of 10,000 foreclosures for the year in Oakland County. Whoopee!

We are averaging 823 foreclosures a month, so far this year, according to Crumm. The good news (if there is any in all of this) is that the May total was lower than the April high for the year (so far) of 958 foreclosures.

All of this of course keeps pressure on prices in the area. For buyers that's good new, I guess; since it keeps all prices artificially low. For sellers it's just another thing that they have to deal with - competing with foreclosed homes.

At a national level, the Mortgage Bankers Association reported that 447,723 homes fell into foreclosure during the first three months of the year. As we reported here yesterday, this is all part of the larger national economic news. I've seen reports that state that housing is the reason for the current recession and others that say that the current recession is the reason for the housing crisis (as a part of the overall credit crunch).

Whichever view of things is more correct, the fact remains that our local real estate market will continue to be driven by the impact of foreclosures. I have yet to see any forecasters saying that we've definitely bottomed out and are headed back to a more "normal" market. Still, home are selling - I sold two this week (or at least I wrote accepted offers - we'll wait and see if they actually "sell") and neither one was a foreclosure.

Most of my buyers are still asking to look first at foreclosures; but, when they see some of them and the condition that many are in, they go back to looking at regular homes that don't need as much work. That's one edge that regular sellers can have in the market - condition.


So, it is what it is and we must all go on with life and trying to make a living. call me. I'll show you foreclosures all day long, or we can go look at houses that you can move right into.

Thursday, June 5, 2008

Recession or not?


What's happening in the local housing market is greatly impacted by what's happening in the general economy and in the local economy. Below a recent report from one of the real estate news sources that I get takes a look at the issue of recession and whether we are in one or not and what that means.

Recession or no recession? That's a key question for real estate because any sort of deep or prolonged recession would choke off all hopes of a housing recovery anytime soon. But last week's big economic number -- positive growth in the national gross domestic product for the second straight quarter -- is the latest sign that this economy still has some fight left in it.

Economists define a recession as two straight quarters of negative GDP... so we're definitely not seeing that. No question though: The GDP growth rate is anemic -- just under one percent for the first quarter. But remember that doomsayers last Fall had projected us to be well into a recession by now. Instead, the economy keeps defying the worst predictions: Exports are booming, job growth remains positive, unemployment is at 5 percent. And the National Association of Business Economists is forecasting a much healthier 2.2 percent growth rate by the third quarter.

Even new home sales have bounced back for the first time in half a year -- up by 3.3 percent last month, according to the Commerce Department. Mortgage interest rates continue to be highly favorable for home shoppers. The Mortgage Bankers' latest weekly survey found 30-year fixed rates remain just below six percent on average, and fifteen year rates are around five and a half percent. Home sales are still far below year-earlier levels in many local markets, but economists agree that the recent changes by Fannie Mae and Freddie Mac to ease down payments and other underwriting restrictions have the potential to stimulate sales in the next several months.

Already, there are scattered reports of unexpected sales increases in some markets that had been almost moribund for months. Dr. Lawrence Yun, chief economist for the National Association of Realtors, pointed to San Diego, California and Fort Myers, Florida as two local markets that had been in the sales doldrums, but now with lower prices, are racking up sales gains. "Lower pricing and low interest rates," said Dr. Yun in a recent commentary, "are starting to generate results." That's the equation that could move us past the down cycle … very possibly starting sometime in the second half of this year.


So, there's reason to be optimistic that the worst is over, or at least that we've bottomed out and may be ready to start back towards a more normal market. In my little corner of the world the five markets that I track on a weekly basis - Milford, Highland Commerce, White Lake and West Bloomfield Townships - also seem to be picking up a bit. I've noticed that the number of houses that are for sale is up in most of those market (which is normal for the summer selling season), but the Days-On-Market to sell is going down a bit. That means that homes are selling quicker. Some of that is obviously driven by foreclosures, which still make up 40-50% of the sales every week, but I've also noticed that quite s few of the more expensive homes (above $300,000) have sold recently. I have several active buyers, with whom I'm working to look for new homes; and, I'm getting increased activity on my listings. Both are good signs that things are picking up in real estate. I certainly hope that this trend is sustainable and not just a "summer bounce."

Now if we could only get some good news from the local auto companies…

Wednesday, June 4, 2008

The lease market

The lease market has certainly picked up steam in this trying market. Fully 20-30% of our business locally is now in leases. Many of these properties are somewhat distressed - near foreclosure - so the owners have decided to lease, rather than lose the place to foreclosure. The ironic thing is that many of the people seeking to do a lease have just recently lost a house to foreclosure.

The lease process has as much, if not more, paperwork involved than a purchase, when you include all of the preliminary application forms and background checks and pre- and post-occupancy checklists and explanation documents. There is a whole raft of laws protecting the rights of tenants, so would-be landlords need to be extra careful on the front-end. Once a tenant is in, it can take 4-6 months to get them evicted, if they turn out to be deadbeats. So, a great deal of due diligence is required up front. The lease document itself can be quite complex and tries to cover all of the things that can come up between a landlord and tenant. All-in-all is is much more complex than the Purchase Agreement document that may govern a sale, since events that occur after the sale are seldom of concern; while one must be concerned about things that might happen throughout the term of a lease.


Because a lease situation can be fairly complex, it is a good idea to have a good Realtor or a good lawyer involved - sometimes both. You will also need the services of a company that can do background and credit checks. Your realtor really can't do those for you. You should be aware of the applicants background, especially if a foreclosure or bankruptcy was involved; however, it is the applicants current condition that needs to be evaluated. Many people went through some rough times, because of a variety of things, from layoffs to divorces to loss of overtime, which caused them to default of their own home mortgage. If they have stabilized their lives and can now show a steady income stream and a responsible attitude towards their debts, they may be good candidates for your lease. There may even be a complete innocent and logical explanation for the person's desire to lease. They may be on a short term assignment in the area or they may be new to the area and what to get familiar with it before buying. You have to ask.You need to do a good face-to-face interview and size up the applicant.


If you are a homeowner who has tired (or maybe is close to a problem) of the selling routine. leasing can be a way to at least recoup some of your monthly costs. Don't try to get it all or yo may be overpriced, even for a lease. If you are recovering from hard times and need to lease while you repair your credit, be prepared to show that you are now in a position to meet your obligations and would make a good tenant.

Tuesday, June 3, 2008

Happy to be back

After a couple of days in Internet limbo, my sites finally got up and going again yesterday afternoon. It was more than just disconcerting that that were down. A portion of my real estate business is driven by people being able to find me through my Web sites. If you Google Milford Michigan, for instance, my MoveToMilford.com site comes up on the first results page. So people who are moving into the area from out of state or from elsewhere in Michigan would find me through that site. If you Google either "Realtor Milford Michigan" or "Realty Milford Michigan", my MilfordTeam.com site comes up on the first result page, so people find me that way. If you Google "Michigan Home Buyer", my MIHomeBuyer.com site comes up on the first page of results, so people find me that way. So, having my sites up and available for people to go to is important to my business.

I also maintain the web site for the Milford Historical Society - http://www.milfordhistory.org/ - and that is certainly important to many local people and serves as a good source of information about Milford and its history. Finally, I do the church web site for Holy Spirit Lutheran Church of West Bloomfield - http://www.spiritdrivenchurch.com/ - and that is important to the people in the congregation in order to keep up with what's going on in the church. The outage occurred just as I was trying to do the May to June update for the church site, so I missed the first weekend of the month. Fortunately, most people made it to church anyway. I guess God doesn't need to Google anybody.

So, I'm back on the air, so to speak. Doing this blog is sort of a fun thing for me. The Web sites are fun to, but do involve a bit more work to maintain, especially the weekly real estate statistics that I track for my market area. I invite one and all to visit my sites and let me know what you think of them and what I might add or change to make them even more useful.

I see old (obviously, now obsolete) political signs for Ron Paul that state - "Go ahead, Google him". Well I guess you can go ahead and Google me too, or at least my sites. If you Google me, use "Norm Werner", since that's how I show up on most sites.

Monday, June 2, 2008

Crashing and burning on the Internet

I've effectively been off the Internet for three days now - at least my Web sites have been. My Web hosting company - lowesthosting.com - apparently suffered a catastrophic event at the building where the host servers are located. Reportedly, a fire somewhere in the building or vicinity took out several large transformers, thus plunging lowesthosting and several other companies in that data center into the dark and throwing an estimated 7,500 Web sites from over 5,000 companies off the air.

This whole ordeal was made worse by the total lack of communications from the company and by the inability to get any messages through to them. I first noticed it while I was trying to update one of my sites. Then I discovered that I couldn't see any of my sites. Not only that, but emails to the support staff were bounced. A bad situation. I rummaged around on the web for a while, trying to find anything out about what might be going on. Was LowestHosting out of business? Were they under some sort of Denial of Service attack? what was happening. Finally I hit a web hosting forum site and signed on. There I read the string that was posted about the fire and the resulting chaos at lowesthosting and other companies that used the impacted data center.

At least I know now what happened and is still happening - three days and still waiting. I began to fell like I should look into a more professional company for my web hosting - one that has a plan for back up and recovery should something like this happen again. One would be hard pressed to find a cheaper deal on web hosting, but cheap isn't cheap if it isn't working. The postings on the web hosting forum stated that things should be up and running again today. Let's hope. Then i can focus up finding a more reliable hosting site.

All I say to loyal users of my various web site is stick with me, I hope we'll be back up soon.