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Monday, December 31, 2012

Ending the year on a mixed note…


I updated my weekly stats data last night with what may end up being the final numbers for 2012, that is, if no more sales actually close today. I’m not sure how many Title Companies are working on New Year’s Eve day. The stats for the last full week of the year were very mixed. Overall in the nine markets that I track – Milford, Highland, White Lake, Commerce, West Bloomfield, South Lyon, Green Oak, Brighton and Hartland – distressed sales again exceeded 50%, closing out the year at 55% for the week.

 Those final week figures pushed the distressed sales stat for all of December up a bit, too; with the White Lake, Commerce and Hartland markets at or above 50% distressed sales for the month. The lowest in distressed sales for December was Green Oak at only 17% of all sales being distressed. You can see all of the markets December activity and statistics at www.movetomilford.com – just click on the “What have homes in this area sold for?” choice.

 I don’t keep running totals of distressed sales for the year, so I’ll have to go back and see how that totals up for the year for the markets. The sales for the whole year are there, below the current month’s numbers. I’ll be doing some looking back at those markets over the next week or so and try to put together some trend charts from the data, which of course I’ll share here and elsewhere.  

The chart of the distressed sales percentages for just the Milford market show how up and down the market has been all year, but still shows an overall downward trend –

 

 

 
 
 
 
 
 
 
 
Stay tuned for more charts and trends as I get time to do them.

Friday, December 28, 2012

It not new...we just forgot...again!


“There's a view in this country that everybody's going through what they're going through for the first time.” (Cokie Roberts) from the Jack’s Winning Words blog. That saying would go well side-by-side with the saying by George Santayana – Those who cannot remember the past are condemned to repeat it.”

George Santyana was a Spanish philosopher, essayist, poet and novelist who lived in the late 19th and early 20th Centuries. His famous saying has been paraphrased and perverted many times and has lots of variations in use today. Essentially, Cokie’s remark is built upon the premise of that saying.

Were George around today, another of his sayings would be a perfect fit for the political fanaticism that we are witnessing in Washington – “Fanaticism consists in redoubling your efforts when you have forgotten your aim.” I think that both sides have lapsed into dogmatic fanaticism that has caused almost complete paralysis. Indeed members of both parties have forgotten their aim, which is to serve the people, and have instead taken up the banners of the most radical elements of their constituency and locked themselves into an ideological battle in which there are no winners.

So as we approach the Fiscal Cliff at the end of the year, another saying of George Santyana might serve well if perverted a bit. George said, “When men and women agree, it is only in their conclusions; their reasons are always different.”  If you substitute Republicans and Democrats for the men and women in that saying it make perfect sense as we watch the “negotiations” that are going on in Washington. Both sides agree that they would prefer to avoid taking America over the cliff, but for completely different reasons and with different approached to a solution.

Wednesday, December 26, 2012

Case-Shiller confirms market direction is UP!

The latest Case-Shiller Report, released by S & P/Dow Jones is a good tool to confirm the direction of the market a couple of months back. The latest report (see graphic below) confirms that the real estate market continued to recover nicely through the end of October. The report itself contains sales data that supports that conclusion from all of the major markets, with only two major markets - New York and Boston - reporting negative appreciation. In general the numbers say we're back to the 2003 level as far as average housing prices go. That's good news, but keep in mind that 2003 was a good 2-3 years before the peak in values, so we have a ways to go to get back to break even for those folks who bought at the peak, in the 2005-6 time frame. Also remember that the run-up was at a very fast pace and the recovery is occuring at a more traditional appreciation pace.















Case-Shiller just confirms what I've been reporting for a while now and what the data that I collect about the nine markets that I track are showing. In fact, some of our local markets are dong much better than the trends shown in the Case-Shiller charts. In addition to the Average Home Sale Price that Caase-Shiller focuses upon, I look at some other key indicators of market health. I report the average and median SEV multiplier (a unique Michigan thing - the State Equalized Value for homes is supposed to equate to 1/2 of it's market value, although it is seldom right on that mark) for sold homes, as well as the average and median sold homes cost per square foot. I believe that those are very important market health indicators for our area. Most area sales are running at 2.2 to 2.4 times SEV right now and several markets have broken back through the $100/Sq Ft. mark (the Averages  were down as low as $80/Sq Ft in most areas at the bottom of the market).

If you'd like to read the entire Case-Shiller Report, click here. And if you are really into statistics and want to see what our market has been like, go to MoveToMilford.com and click on the What have homes in this area sold for? choice.

This is good news for would-be sellers. The market is coming back! If you haven't had an updated Comparative Market Analysis done lately you may already be missing the boat. Locally, we are in a Sellers' Market, with sellers getting top market prices and selling good homes very fast. If you're in Milford, Highland, Commerce, White Lake, South Lyon, West Bloomfield, Green Oak, Brighton or Hartland call me for a free Market Analysis - 248-763-2497.

For buyers there are still good deals out there; but, you've already missed the boat in terms of the market bottom; that actually happened mid last year. Waiting longer only gets you higher prices. The mortgage rates are still low, so get in the game. Let me find the right hose for you and still get a good deal.

Monday, December 24, 2012

New sales stats and market comments

I've posted the second to last set of real estate sales statistics for the year at my Move To Milford web site. The next post will wrap up the year and I'll try to look back and see what the trends have been. The market is general has been improving, with s0me stats like average home sale values being dramatically impacted by the lack of inventory right now.

There are so few good homes on the market that it is a sellers' market right now and buyers have to be prepared to make offers immediately and may face multiple offer scenarios in many cases. In a more balanced market sellers are advised to be prepared for a 4-6 month wait to sell. Right now 4-6 weeks is more like it, with really nice, move-in-ready homes going even faster.

The market is so "tight" that interest in building has picked up and I'm getting more and more inquiries about vacant land, suitable for building. Almost all of the local developments that had stalled out during the recession are building again. Most builders have adapted to a shift in buying patterns towards the lower end by building less expansive and less expensive new homes.

This is normally a slow time of the year for real estate sales and this year is no different, but for different reasons. There are actually lots of buyers out looking; but, with little to see right now they are just stacking up and getting frustrated. That is especially true of buyers who aren't the types to make quick decisions. Taking the time to ponder a decision right now means that the house probably won't be there by the time you decide.

So, if you're a buyer, you need to be ready to make a decision; be pre-qualified, so that you can make a serious offer; and be persistent in your efforts. If you are a would-be seller, now is the time to at least find out if the market has come back enough for you to sell. People who haven't had a Comparative Market Analysis (CMA) by a real estate professional within the last 2-3 months are seriously out of date with the market. CMA's cost you nothing and can give you a good idea about whether now is the time for you to act. It's certainly a good time to have a house on the market.

 Merry Christmas everyone! Stay tuned for the end-of-year report on all of the real estate sales data in Milford, Highland, Commerce, White Lake, West Bloomfield, South Lyon, Green Oak, Brighton and Hartland. I look forward to kicking off the New Year - The Year of the Seller!

Saturday, December 22, 2012

Michigan December Market Report






 





 
 
 

Michigan Monthly Market Report - December 2012
Traditionally, this time of year sales activity slows, but
not so much this season. Although sales will be less than
peak spring and summer months, they are unusually
strong for this time of year. Our annualized sales rate is
actually higher now than it was this past spring,
meaning we are carrying even stronger buyer demand
into the New Year than we did this year (and this year
was pretty strong).
 
Listing inventories continue to shrink, as the number of
new salable listings entering the market is not keeping
up with the number of homes being sold. All indications
point to 2013 being a strong year for home values with
both Median and Per Square Foot prices up 20%+ over
the past year, pending sales up 38%, home inventories
down 25%, Days on Market down 24% and foreclosure
sales down over 50%. The combination of great rates,
prices and six years of pent up demand is causing an
extra boost in buyer demand. Because of that, we
expect appreciation rates to be strongest over the next
18-24 months, and then settle back down to a more
normal (but still strong) activity level. Which means an
expiration date is on that sweet spot of both strong
appreciation and low interest rates, so anyone who is
anticipating selling in the next 3-5 years should be
evaluating their housing needs in 2013.
 
Buyer's lending standards continue to be a challenge, so
here are some simple suggestions to help minimize
mortgage loan frustration:
1. It's never too early to get pre-approved. Preparation
is key to a successful transaction.
2. Once pre-approved, don’t open new debt.
3. Large deposits are watched very closely. Deposits
going in checking and savings accounts need to be
accounted for (large means anything over $500).
4. Bring everything asked for by the Loan Officer up
front at the time of application.
5. As underwriters check and double check files, be
prepared for additional conditions after approvals and
some details needed within the last few days of the
transaction.
6. Often, if the transaction has been in place longer
than 45 days, ask which information will need to be
updated before closing.
 
November sales were our best of the year, adjusted for
the season and not surprisingly so was our market
share!

If you would like more information on the market, like
to list your property, or want information on any
property with any broker, you may call or email at any
time.

Have a wonderful Holiday Season,

Norman, W Werner
Put my team to work for you
P: 248-763-2497
normwerner@comcast.net
http://www.normwerner.realestateone.com

Wednesday, December 19, 2012

New real estate sales data posted

I got around to updating my sales statistics on my web site www.movetomilford.com for the nine local markets that I cover yesterday. I track sales in Milford, Highland, Commerce, White Lake, West Bloomfield and Lyon townships in Oakland County, plus Green Oak, Brighton and Hartland Townships in Livingston County. I chose those Townships because they are where I do the majority of my business.

I had posted a blog last week that has proven to be not true. I stated that all of the Townships that I track had dropped below 50% of distressed sales for the month. Actually, White Lake Commerce and Hartland were back over 50% last week; with White Lake back up to a whopping 79% of all sales being distressed sales for December.

I'm not sure if this is just a case of some of the so-called "shadow inventory" being released in White Lake or what. There has long been a rumor that an inventory of foreclosed, but not yet on the market homes was being held by several of the big banks. The reasons varied, but usually had to do with the banks reacting to the robo-signing law suits and deciding to withhold foreclosed houses until they had a clear line of title and better procedures worked out.

So, at least in those three Townships there is still quite a bit of opportunity to find a distressed property at what is usually a great price. If you stumble upon one that is also in good condition it is a find indeed. Distressed homes - those being sold out of foreclosure or in a short sale - are usually anywhere from 15 - 30% below the average market value.

So go to my web site - www.movetomilford.com - and click on the What have homes in this area sold for? There is data posted there for the entire year and for prior years back to 2007 for most of those Townships. You can find such valuable indicators and the average and median cost per square foot for sold homes and the SEV multiplier. Those two numbers along will allow you to at least get in the right ballpark when trying to determine what the probable market price of a home in those areas might be.

Monday, December 17, 2012

The importance of your credit score...


A recent blog post by George Souto, a Connecticut mortgage broker, on the ActiveRain site discusses the  important role that credit scores are playing these days in the mortgage process. See the post at -


I get people all the time who call me and ask to see houses. When we discuss their readiness to actually buy a house it sometimes comes out that their credit history is so bad and their credit scores are so low that they really can’t afford anything right now, much less the nice homes that they wanted to go see. I try to be nice about telling them that it would be a waste of their time and mine to look now, before they get their credit issues resolved.  The mortgage people that I normally recommend can provide them with advice on how to repair the damage that they’ve done to their credit score; however, there is usually no way to dramatically shorten that process. Time and many paid bills must pass before the impact will be seen in an improved credit score.

Credit scores are important for leasing, too; although more important is the credit report itself, which hopefully shows a good pattern of paying bills on time recently. Many people have experienced some life event, whether it be an illness or death in the family, a layoff at work, a divorce or something that caused them credit issues and may have cost them their home. That doesn’t mean that they can’t be good renters, while they rebuild their credit. The key, again, is being consistent with paying current bills on time.

It is good advice to actually check your credit report at least once a year with each credit rating company. They are required to give you one free credit report a year. That report does not usually also have the credit score that they would give to a company inquiring about your credit, but they will normally sell you that for a small fee (just resist all of the other stuff that they’ll try to sell you, too).

So, be ready, whether you are looking to buy or lease and go get your credit report and at least one credit score. Read it over and make sure that you challenge any mistakes that you find, to get those blemished off your credit history. Then, you might want to compose a letter (if you are looking to lease) explaining what happened to put you in the situation that you are in and how you are working your way back to good credit. A landlord will want to understand that and feel good about your current ability to pay the rent.

Wednesday, December 12, 2012

Keeping the Dream Alive in the Huron Valley...


Today I posted information on my web site www.movetomilford.com about some of the upcoming events in the Milford area in observance of Dr. Martin Luther King Day, which is January21, 2013. The Huron Valley Martin Luther King Jr. Day Committee has already kicked off the events by opening registration for entries in the art, writing and performance categories. Each of these categories will judged, with awards for the best entries to be announced during the celebration on the 21st.

There will also be a parade down Main St in Milford on the 21st, with the line-up scheduled for 1 PM at the Prospect Hill Shopping Mall. The march will proceed up Commerce to Main St and down main street to Central park. Dr. King’s famous ‘I have a dream…” speech will be played as the marchers go down Main St. You can read more about the planned activities and the work that the Committee does throughout the year by going to www.movetomilford.com and clicking on the link to about information concerning the celebration.

It is interesting to me, as I looked to see who was behind the Committee, that Dr. King’s Dream is today being kept alive and championed mainly by people too young to have been there when the events happened. They are championing the principals that Dr. King espoused, and not just honoring his memory. That is important; because that means that the real content of Dr. King’s Dream is living on and not just the context.

 I am old enough to have witnessed the events of that era, albeit mainly from the comforts of my home on the TV. I saw the coverage of the marches and the loosing of the dogs upon the marchers. I saw Governor Wallace standing on the steps of the Alabama University, trying to deny entrance to a black man. I saw the coverage of Dr. King’s famous speech on the Capitol Mall and I witnessed the coverage of his death.  Those were trying times and times that challenged all Americans to embrace the inevitable change that Dr. King was fighting for during those marches and while giving those speeches.

It is a sad commentary that many of the most important events of the era were the deaths of the people fighting to do the most good and make the most change in America at the time – John F. Kennedy, Bobby Kennedy and Martin Luther King, Jr. represent three of the most important. I certainly hope that groups like the Huron Valley Martin Luther King Day Committee keep reminding us all of the Dream, as yet not fully realized, that Dr. King had for an America in which the color of a man’s skin would have no impact or influence on his ability to realize his full measure of the American Dream. I’ll see you on Main St on January 21st.

Monday, December 10, 2012

Compassionate Conservatism at work...


As reported on the CNN Money site - Mortgage giants, Freddie Mac (FMCC, Fortune 500) and Fannie Mae (FNMA, Fortune 500), announced today that they will suspend all bank repossessions beginning December 17 and December 19, respectively, and will not resume the evictions until January 2, 2013. "The holidays are a chance to be with loved ones and we want to relieve some stress at this time of year," said Terry Edwards, Executive Vice President of Credit Portfolio Management, Fannie Mae.

So, in addition to a New Year’s Day hang over you can pack up and get out. Somehow this seems less genuine that I’m sure that the Freddie and Fannie folks meant it to sound. I guess there was not good day on which to start evicting people again. Soon they’ll be able to throw them out and over the cliff, too. And you thought it was the Grinch that stole Christmas. Move over Grinch, Aunt Fannie and Uncle Freddie are here with a Christmas tease.

It’s too bad that the “Let Them Fail” crowd has only been successful with letting individual homeowners fail and not the big banks and shadow-banking institutions that helped cause this mess. Now, in my area, the debate is whether to let the City of Detroit fail and go into bankruptcy. To add to the drama, the City Council is fighting a rear guard action to prevent the state from rescuing the City; so, I guess they’ve joined the “Let Them Fail” crowd, too.

It’s Day 22 until the Boehner Recession. It’s too bad that Rodney Dangerfield isn’t with us anymore. He could have reprised one of his movie roles and done his famous triple-Lindy dive off the Fiscal Cliff before hitting the bottom of the empty pool below.

Saturday, December 8, 2012

Lost in the noise of Thelma and Louise Redux...


As the melodrama in Washington unfolds and we towards the so-called Fiscal Cliff other important legislation gets lost in the noise. One law critical to the real estate business that is due to sunset on January 1 is the law that gave relief to those going through foreclosures or short sales from being taxed on the loss that the bank took. Most people can probably recall that banks were issuing 1099 Forms to foreclosed homeowners for that difference, essentially treating  it as if the foreclosed homeowner had been handed the difference and now owed taxes on it just like ordinary income.  The Mortgage Forgiveness Debt Relief Act of 2007 gave relief to those foreclosed homeowners by preventing the banks from issuing those 1099’s – at least the banks that took Federal TARP money during the bail-outs.

This legislation, flawed though it may be, was critical to supporting the housing recovery by allowing short sellers to get out from under their old houses and not strapping them with an additional debt that would prevent them from buying a new smaller house that they could afford. Other laws that rode along with this law added provisions for a modest move-out payment to the short-seller to help them relocate. Some people objected to that, saying that it encouraged the bad behaviour that got the short sellers  into that situation in the first place. I don’t agree with that view.

So, now this legislation is due to expire at the end of the year. There was legislative support  to renew or extend the provisions of this legislation; however, that got caught up in the panic and noise about the Fiscal Cliff and is now buried somewhere in Washington, along with many other critical bills. The National Association of Realtors is lobbying as hard as it can to get attention back on this legislation, so that it doesn’t expire, but the drama over Fiscal Oblivion continues to dominate the Washington scene.

There is a sizable (and growing) contingent in Washington that now seems to believe that we should just go ahead and go over the Fiscal Cliff and then sort out which things really need to be fixed and which can just be allowed to happen – sort of like Thelma and Louise driving off the cliff at the end of that movie and then checking the back seat to see if there are any parachutes that they might use. There was a reason that they didn’t show what happened next in that movie! Some things can’t just be “fixed” later, if they’re allowed to happen.

Tuesday, December 4, 2012

Housing market speeding back to ”normal”…

A recent blog post on Trulia by economist Jed Kolko makes the claim that the housing market is 47% back to “normal.” Kolko uses three primary measurements of the market as indicators of its state – new housing starts, existing home sales and the delinquency (foreclosure) rate in the groups of markets that he tracks. Kolko compares these numbers against their worst state at the depth of the recession and their best at the pre-burst peak of the market. The data in Kolko’s blog are from October and from very reliable sources. His percentages of recovery are basically percentages of the change from the worst to the known best state for those three indicators.

According to Kolko, new construction is 41% back to normal, up 47% year-over-year against last November. Existing home sales he sees as being 59% back to normal and delinquencies/foreclosures are 41% of the way back to normal at a current rate of 10.64% nationally. He has some interesting charts in the story that show the trends, starting with his Housing Barometer. Click on the link in the first sentence to read his blog article and see the charts.

In this area, I just posted the November home sales numbers for Milford, Highland White Lake, Commerce, South Lyon and West Bloomfield Townships in Oakland County and Green Oak, Brighton and Hartland Townships in Livingston County. You can see that data and the 3-5 years’ worth of data that I’ve been collecting for those markets on my web site – www.movetomilford.com. I think I’m going to have to start charting my data, too. It does make it easier to see the trends. I’ll start that in January of 2013 and go back a couple of years just to get the trend lines going.

Just based upon my own observations and the data that I collect and post, I can also see the recovery happening, albeit a bit slower in some markets, but quite rapidly in pockets locally. I also look at the trend in home sale values and the sold price per square foot, which have been rising in all the markets all year. Foreclosures and short sales are down to below 50% in all of the markets that I track and down close to the national average in some – good news.  

Currently slowing the recovery a bit locally is the lack of inventory. Too many people still believe that they are underwater on their homes, so they are still hunkered down waiting out the market. For many the time to at least take a look at where they’re at in terms of market value has arrived – they just don’t know it yet. I’m pretty sure that we aren’t 47% back to the pre-bust “normal” of 2005-6, but our market has markedly improved and it’s definitely time for people to leave the bunkers and test the market.
The local economic news is also improving, so the economic risk factors are down for making a move, too. My advice is to at least get an informed opinion from a Realtor about what you house is worth today, so that you can make intelligent decisions about whether to go ahead with retirement plans, move-up plans or whatever plans you have that involve making a real estate change. Email or call me 248-763-2497, if you’re in this area and let me take a look at your home-value situation – you may be pleasantly surprised.

Monday, December 3, 2012

Create some value today...

From the Jack's Winning Words blog comes this thought - “Any experience can be transformed into something of value.” (Vash Young)

The real estate business that I'm in provides plenty of expereinces every day. No two deals are exactly alike, yet they exist within a framework of rules and laws and ethic codes that allows them to be accumulated. It is through that accumulation and reflection upon the expereinces that knowledge is gained and from that knowledge, over time wisdom is the eventual "value" that is created.

Everyone has the opportunity to look at their expereinces and try to understand them in order to add to their knowledge and gain wisdom. Some do not take advantage of those opportunities. Often egos get in the way and differnces in experinces are discounted as "not the way we do it." Failures are also great opportunities for gainign knowledge; however, some refuse to deal with failure in a positive way; prefering to find someone or something else to blame for the lackof success. For those people age does not bring wisdom and for themthe phrase "there's no fool, like an old fool" was created. An old proverb also covers them - "A wise man can see more from the bottom of a well than a fool can from a mountain top."

So, create some value today. Take some time to think about the expereinces you have had - good or bad - lately and see what knowledge you can gleen from them. Over time the storehouse of those expereinces that have been pondered will add to your wisdom and that will make you a valuable person to know.