Saturday, July 24, 2010
There are other signs. The local real estate market is in the tank again and foreclosures and short sales have climbed back above 50% of all sales lately. Much of what is selling is at the lower endof the market and the Days on Market for homes above $300K is still almost 2 years.
I also work as a sales rep for a local Xerox dealer and spend quite a bit of time out driving around in industrial parks visting clients and prospecting for new business. It is appaling to see all of hte empty buildings and shuttered businesses. Lots and lots of small tool and die shops and machining shops and other small supplier businesses that were dependent upon the automotive industry are just gone. The small business manufacturing base in this area has been decimated and there is nothing in sight to take it's place.
I also see a lot of survivors who are continuing to struggle along, trying to keep the lights on while they seek new clients or switch to being suppliers for new industries. I wish them well and try to help by "rightsizing" their office equipment, if I can. Still, it is sad to see the little 6-8 man company that is sitting there with all of the old equipment for the 30-40 man company that they were just a couple of years ago.
We'll all get throuigh this current, second dip; however, what comes out on the other side is going to be a wholly different environment for businesses, for families, for us all.
Wednesday, July 14, 2010
Somehow this saying from over 1,000 years ago seems apropos to today's real estate market, at least if you're a real estate sales person trying to make a living at it today. The lion that is the real estate market has been showing it's teeth for some time now. I, for one, determined that it was not smiling at me and went into dual-career mode, taking a job selling office equipment in addition to my real estate business. Some of my colleagues decided to take the lion tamer approach and stick there heads into the lion's mouth. I few have survived and a few did not and left the business altogether.
I suppose the message here is that one must first recognize the dangers and then come up with an appropriate plan of action. What is appropriate will be different for each person. For me it was
the opportunity to get back into business-to-business sales with a company that represents a major brand - Xerox - in a field that leverages the 30 years of IT sales experience that I had before getting into real estate. Business-to-business sales is a whole different ball game; although sometimes if feels like I've traded a smiling lion for a smiling tiger. Maybe it feels better because it is a tiger (business market) that I'm familiar with, after all that time selling computers and IT services.
I must admit that there are aspects o0f the real estate business that I miss - mainly the interaction with the people (buyers and sellers). There also aspects that I don't miss. There is no equivalent to the frustration of dealing with banks on a short sale in business-to-business sales. The whole foreclosure/short sale/financial mess has taken most of the pleasure out of real estate sales, at least for me. Every deal seems to be a struggle for all involved - buyers and sellers and certainly the agents for both.
The sense of any semblance of order and rules and structure in the real estate market is long gone. It's basically the Wild Wild West out there with lenders making their own rules as they go along. Every new Federal Program to help home owners or home buyers seems to bring hope, only to dash it when the reality of what the banks are going to do or not do sets in.
I'm not sure where the answer lies to all of the current issue. Likely only time will eventually bring the corrections that are needed. My belief is that we are in the midst of a major and permanent basic restructuring of our way of life in America. Some of us old timers aren't going to like it, but many of us won't be as affected by it as our grand children will be. They are the ones that will be hired in at the lower tier of the new 2-tier wage systems (the tiers could be appropriately labeled "before and after the meltdown" and equate to $10-15/hour lower wages).
In the new reality home ownership will again be an American dream and not a reality to many. Homes will be smaller, with less of the gee-whiz features and upgrades of the pre-meltdown era. Many other changes are occurring that will impact us all in many ways that we cannot now even imagine. More thoughts on that in a future post.
Sunday, July 11, 2010
Thursday, July 8, 2010
In Oakland County most townships are squares that are 6 miles on a side. The Townships of Highland and South Lyon are separated by Milford Township, so they are only six miles apart from each other; however, they are worlds apart so far as the local real estate market goes. Look first at Lyon Township, which contains the city of South Lyon within it's borders.
The market in Lyon Township took off at the beginning of the year and never looked back. Median Sold house values have continued to rise, even after the tax credit expired and though much of the inventory was sold off, more houses are now coming on the market.
Lyon is positioned well, out along a major East-West artery (I-96) and has been the hottest new-build community for the last few years. Lyon is likely the fastest growing community in the County. Things are good in Lyon township.
Now take a look at Highland Township, just six miles away; but those six miles are all north off the highway and much of the Highland market is north of M-59 a secondary East-West artery. The road to Highland from I-96 winds through the Village of Milford. There is no easy or quick way to get off I-96 and get to Highland.
The market in Highland has been dropping, in terms of Median Sold Home Values for 3 years, with no end in sight. It actually perked up a bit at the beginning of the year, but the trend turned down again when the tax credit expired and Highland's cheaper houses were mostly sold off.
So, what do these two charts mean to you if you are looking to buy a home? Well, if you don't mind those extra six miles, there are great bargains to be had right now in the Highland market. The Lyon market will likely have less inventory and the prices will likely be less subject to negotiation. There are many more newer homes in Lyon (though you really can't tell that fromteh chart) than in surrounding communitires that have not had as much new-build activity lately and you are more liklely to find a newly built home there.
If you live in Highland and want to sell, it means that you need to be all that much more aggressive to attract buyers across those extra six miles. Not every buyer will need to get to I-96 to get to work. Indeed, many find M-59 to be the most convenient way to jobs in northern Oakland County and that is the buyer audience that you'll need to market to, in order to sell more quickly. If you are a seller in Lyon Twonship keep in mind that you will be competing against all of those new-build developments. Many new start homes, even in the same subdivision, are now using smaller and less expensive floor plans, in order to attract new customers. However, you should be able to take advantage of the hot Lyon market and sell faster and for a better price than in surrounding markets.
If you want to buy or sell in either of those markets, give me a call, I know them both. I live in MIlford Township, halfway between them.