Unless a large number of very expensive homes sell in the next 3 weeks, (which is highly unlikely) one can look at the numbers that I’ve been collecting and reporting all year long to get a better understanding of the local market. I collect and report weekly sold data for homes in six markets – Milford (Township and Village), Highland Twp, White Lake Twp, Commerce Twp (excludes Wolverine Lake Village and Walled Lake Village), The LyonTwp/.South Lyon market and the Brighton Twp and City markets (shown as just Brighton in the reports.
I decided early in the year to only look at sales of houses above $20,000, which probably leaves out a few really bad foreclosed and short sale houses, but also serves to remove any leases from the data. I report the last asked price and the sold price and calculate a percentage for the sold price vs. asked. I also report the SEV of the house at the time of the sale and calculate the SEV multiplier of the sold price vs. SEV. I report the Days on market, the square footage, the cost per Sq Ft asked and the cost per Sq Ft sold..
What good is all of this? Well it depends upon whether you are a buyer or seller. If you are a buyer, you can look at the data for the area that you are interested in and understand
What people have been paying for homes thereon a cost per Sq Ft basis and as a percentage of asking price. That is valuable information for negotiating a deal. If you are a seller or potential seller, you can see what a reasonable expectation might be for your home and maybe set a better market price for it that will help it sell faster.
For instance, in my home market area of Milford, sellers have been asking about $93/Sq Ft and getting about $89/Sq Ft. Those are just about the same for both the Average and the Median for those statistics. Buyers are paying about 97% of asking price, which means that homes seem to be fairly priced. Homes are also selling for about 87% of asking price in White Lake Township; however, the homes are priced at about $79/Sq Ft and are sold for about $76/Sq Ft. To see all of the data on all six areas, go to my Web site – http://www.movetomilford.com/sold_homes.html
You can also get a feel for how far behind the assessors are in getting home assessed values down to reflect the market by looking at the derived number that shows the sold price as a multiplier of the State Equalized Value (SEV). In theory this quaint Michigan reflection of a homes value is supposed to be ½ of the homes assessed value, which should reflect the market value. If it is accurate the multiplier should be 2.0000, which would mean that one could multiply the sold value times 2.000 and get the market value.
In practice, because assessment adjustments in the downward direction have badly lagged the market, the numbers for most of the markets that I track are somewhere in the 1.5000 to 1.6000 range, with the Lyon/South Lyon market being the only one to average over 1.6000. Both the Highland and White Lake Markets are even worse in the 1.3000’s. That basically means that homeowners in those markets are being heavily overtaxed, since their taxes are based upon SEV values that are way above the market prices that are being paid.
Finally, you can also see how big the influence is of foreclosed homes and short sales – distressed properties. Nationally those types of sales make up about 30-35% of the sales that take place. In my six markets they have consistently run above 50% and for quite a while got as high as 70%. So far, in December they are running at 65% of the sales that have taken place.
What doesn’t show up in these numbers is the unknown number of would-be sellers who just can’t bring themselves to sell their hoes for what the market would currently bear. We’ll never know what that number is; nor will we be able to “see” the number of would be buyers who just can’t meet the current higher standards for a mortgage. There is believed to be a huge “pent-up demand” for both selling and buying just waiting out there for things to get better. There is also a reported “shadow inventory” of a large number of foreclosed homes that are being held back by the banks in hopes of a market turn around. Perhaps none of those would-be sales will ever occur; but, then we’ll never know, will we?
I decided early in the year to only look at sales of houses above $20,000, which probably leaves out a few really bad foreclosed and short sale houses, but also serves to remove any leases from the data. I report the last asked price and the sold price and calculate a percentage for the sold price vs. asked. I also report the SEV of the house at the time of the sale and calculate the SEV multiplier of the sold price vs. SEV. I report the Days on market, the square footage, the cost per Sq Ft asked and the cost per Sq Ft sold..
What good is all of this? Well it depends upon whether you are a buyer or seller. If you are a buyer, you can look at the data for the area that you are interested in and understand
What people have been paying for homes thereon a cost per Sq Ft basis and as a percentage of asking price. That is valuable information for negotiating a deal. If you are a seller or potential seller, you can see what a reasonable expectation might be for your home and maybe set a better market price for it that will help it sell faster.
For instance, in my home market area of Milford, sellers have been asking about $93/Sq Ft and getting about $89/Sq Ft. Those are just about the same for both the Average and the Median for those statistics. Buyers are paying about 97% of asking price, which means that homes seem to be fairly priced. Homes are also selling for about 87% of asking price in White Lake Township; however, the homes are priced at about $79/Sq Ft and are sold for about $76/Sq Ft. To see all of the data on all six areas, go to my Web site – http://www.movetomilford.com/sold_homes.html
You can also get a feel for how far behind the assessors are in getting home assessed values down to reflect the market by looking at the derived number that shows the sold price as a multiplier of the State Equalized Value (SEV). In theory this quaint Michigan reflection of a homes value is supposed to be ½ of the homes assessed value, which should reflect the market value. If it is accurate the multiplier should be 2.0000, which would mean that one could multiply the sold value times 2.000 and get the market value.
In practice, because assessment adjustments in the downward direction have badly lagged the market, the numbers for most of the markets that I track are somewhere in the 1.5000 to 1.6000 range, with the Lyon/South Lyon market being the only one to average over 1.6000. Both the Highland and White Lake Markets are even worse in the 1.3000’s. That basically means that homeowners in those markets are being heavily overtaxed, since their taxes are based upon SEV values that are way above the market prices that are being paid.
Finally, you can also see how big the influence is of foreclosed homes and short sales – distressed properties. Nationally those types of sales make up about 30-35% of the sales that take place. In my six markets they have consistently run above 50% and for quite a while got as high as 70%. So far, in December they are running at 65% of the sales that have taken place.
What doesn’t show up in these numbers is the unknown number of would-be sellers who just can’t bring themselves to sell their hoes for what the market would currently bear. We’ll never know what that number is; nor will we be able to “see” the number of would be buyers who just can’t meet the current higher standards for a mortgage. There is believed to be a huge “pent-up demand” for both selling and buying just waiting out there for things to get better. There is also a reported “shadow inventory” of a large number of foreclosed homes that are being held back by the banks in hopes of a market turn around. Perhaps none of those would-be sales will ever occur; but, then we’ll never know, will we?
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