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Sunday, February 28, 2010

The real estate market in Bloomfield Hills Michigan

Just north of Birmingham, Michigan which I reported on last, is the City of Bloomfield Hills, Michigan, which,with Birmingham, takes up quite a bit of Bloomfield Township. This is another of our local upscale areas, with large homes on estate sized lots. Home prices in this area have held up better than in other areas in the region, and the media sale price is very sensitive to the inventory level - as more inventory came on the market in mid-year last year prices tumbled; however, as the inventory sold off and wasn't replaced the median sale prices rose again.

Real Estate Market Chart by Altos Research

(NOTE: the Inventory scale on the chart above reads between 52.5 to 85.0)

The inventory has fallen dramatically since the start of the 4th quarter. Since January there have been only 6 sales with a Median sold price of $486,500 and an average sold price of $671,767. The sales ranged from a low of $240,000 to a high of $1,800,000, with an average days on market of 156 days. There are currently 81 homes listed with a median list price of $1,250,000 and a high price of $6,500.000. They have been on the market for an average of 283 days.

If you'd like to see homes in the Bloomfield Hills area, give me a call or if you live in Bloomfield Hills and want/need to sell your home call me for a market analysis of what your home might be worth on today's market.


Norm Werner is a full-time, full-service Realtor working out of the Milford office of Real Estate One, Michigan’s largest and most successful real estate company. To learn more about Norm or the local real estate market in the Milford, Michigan area visit one of his Web sites listed below:

For buyers and sellers –
For first-time buyers –
For people moving to Milford, Michigan –
For people in distress with their home –

For people interested in the history of Milford Michigan, visit

Saturday, February 27, 2010

Market trends for Birmingham, Michigan

Birmingham is one of our more affluent local neighborhoods but even there the housing market slump has prevailed. As you can see there was an uptick in the last quarter of last year, but it soon faded and the downward trend for median sold prices picked up again.

Real Estate Market Chart by Altos Research

The trend in inventory in the Birmingham market tracked that of the rest of the area - steadily downward. Hopefully that means we are working off the inventory overhang of foreclosed homes.

In Birmingham thus far this year 48 homes have sold, from a low price of $39,900 to a highest price of $2,300,000 (I told you it was pricey) with a median sold price of $279,950 and only averaging 93 days on the market. There are currently 269 properties on the market with a median listed price of $420,000 and an average of 200 days on the market. The highest priced house on the market in Birmingham right now is listed at $5,900,000. If you're in the market for an upscale house, this is one of the places in the area to look. I'll report on the even slightly more upscale Bloomfield Hills/Bloomfield Township area next time.

I've shown a number of Birmingham homes lately and they are always fun to see. Many of the large homes that have been on the market for a while are also for lease, if you'd like to try the area out first, before buying. Give me a call if you'd you think you'd like to see homes in Birmingham. And if you live there now and want/need to sell, give me a call, too. I'd be happy to give you a market analysis of what your home might be worth on the market today.


Norm Werner is a full-time, full-service Realtor working out of the Milford office of Real Estate One, Michigan’s largest and most successful real estate company. To learn more about Norm or the local real estate market in the Milford, Michigan area visit one of his Web sites listed below:

For buyers and sellers –
For first-time buyers –
For people moving to Milford, Michigan –
For people in distress with their home –

For people interested in the history of Milford Michigan, visit

Friday, February 26, 2010

2010 MArket Report from Real Estate One

One of the cool things about working for Real Estate One is that they keep some really nice databases and do some great reporting off of that data. Below is a link to the report that was just released by the company on the market as we exited 2009 and headed into 2010. As you flip through it there is a just a ton of great information about the 5-county local market here is Southeastern Michigan and about the other markets that Real Estate One serves in Michigan. This is just another reason why it's so great to be a part o the biggest and best real estate company in Michigan.

One chart that stands out to me in the report shows how different the current market is from the historical market of the last 15-20m years in terms of the makeup of the sales. Historically real estate was almost all about traditional owner-occupied sale,what we call now traditional sales. Those sales made up 91.5% of the market, with leases making up 5%, bank owned hoes (foreclosures)running about 2.5% and short sales almost unheard of at 1% of the market. These days the market is made up of 34% short sales, 29%Bank owned sales, 20% traditional owner-occupied sales and 18% leases.

Enjoy the report and let me know what you think of it. Was it helpful for you?

Thursday, February 25, 2010

Has Detroit over shot the market on the downside?

The Final S&P Case-Shiller report for 2009 was released on Wednesday of this week (click here to read the whole report) and it shows a national market that is perhaps cautiously probing for a bottom to the current housing mess. It certainly appears to show the positive impact of some of the Federal programs, especially the tax credit programs for first-time buyers. But, it also shows another downturn as we exited 2009; so, all is not well, yet.

One of the things that I noticed when reading through the report is how far the Detroit metro area has overshot the mark in terms of our losses against the national index average and against other major metro areas. Even places like Las Vegas and Atlanta and Phoenix and Dallas and most of the cities that are reported in California and Florida have not turned back the clock as much as Detroit, in terms of home values.

According to the report, the average for the reported metro areas is now down to about 140 on the Index – the level that the index was at in 2003. The CS Index uses January 2000 has it’s 100% anchor point, so a 140 index would still indicate that the property is worth 140% of what it was worth in January 2000. Keep in mind that the peak was in 2006 when the index got to almost 190%. It’s been all down hill since then.

So places like Atlanta at 108 on the index or Las Vegas at 104% or Dallas at 119% have “lost” a lot of value from their peak in 2006, but they are still worth more than they were at the turn of the century. Then there’s Detroit. Our current index number is 73% (rounded up)! That means that homes in the Detroit Metro area have not only lost value off the peak, they’ve shot right on thru the 2000 average and now are lurking somewhere around what their values were in the mid to late 1990’s (it’s hard to tell exactly where they’d be, but it definitely looks like the values are pre-1996. Wow! No wonder so many investors have swooped into the Detroit area buying up foreclosed and distressed homes. And no wonder our assessors have been making such huge drops in assessed values – leading to huge drops in local government revenues.

It is also discouraging that there’s no one near us in this position. We are so clear of the field on value loss that the closest competitor to us for this value loss “honor” would be Cleveland at they are at 104% in the index. In car racing terms they’d be a lap or two down to us in this race. Atlanta is nipping at Cleveland’s keels at 109%. They’re pikers compared to Detroit! Come on guys, you’rte not trying - let’s get out there and lose some value!

What this means for our local homeowners is that if you have owned your home for less than a decade and a half, you are probably under water. In fact, given the cost of a sale, it is safe to say that if you have owned your home for less than two decades you will be lucky to break even on a sale. If you bought your home for $300,000 at the start of the new decade, it is now likely to be worth about $220,000 in today’s market. That is very consistent with what I have been finding as I do Comparative Marketing Analyses (CMA) for clients.
Unfortunately, what I’m seeing way too much of are the people who bought that same home, that was priced at $300,000 when it was built in 2000, at it’s peak value of over $500,000 in 2006 and now it’s value is back down below $300,000. Ouch!

Hopefully, when things turn around in the general market, Detroit will find it’s way back to being closer to the index average. In the short term the Detroit metro area appears to be one of the best places in America to buy a house, in terms of the value that you’ll get for the money. Nowhere else in America offers what is essentially a 48% discount (compared to the index average) on housing values. So sell of your expensive Los Angeles (171 on the Index) or New York (172 on the Index) homes and come buy in Detroit. You could probably comfortably retire on all the money you’ll have left over.

The real estate market in Hartland, Michigan

The market chart for median homes values in Hartland, Michigan (in Zip code 48353) looks more like a roller coaster ride at Cedar Point than a trend chart. Hartland is a relatively small market (one might say it is a micro market) where a few sales can cause these big swings in charts like these and it's an area where there is still quite a bit of new-build activity. There was a period there in the 3rd Qtr. of 2009 where developers went on a rampage to get spec-built homes off their books and with incentive offers to complete partially finished new-build homes. Then the bottom fell out in Q4, but started recovering again in late Q4 ands early 2010. Now it looks like it has turned down again.

Real Estate Market Chart by Altos Research

Inventory levels have been tracking downward consistently with a big drop in Q4 and a slight leveling out at the beginning of this year. So far in 2010 only 4 homes have sold with a median sale price of $202, 947 and an average days on market of 331 days. There are currently 48 homes on the market with a median listed price of $224, 950 and they average 285 days on the market.

The Hartland market has also been hit hard by foreclosures and by people trying to do short sales. It is a market populated by lots of people who work (or use to work) for the automotive supplier base, so the reverberations of the automotive industry restructuring are still working their way through this market. There are great bargains on newer build homes in Hartland if you are looking to buy. If you are in Hartland and think you might need to sell, give me a call for a quick market analysis of what you hose may be worth right now.

Norm Werner is a full-time, full-service Realtor working out of the Milford office of Real Estate One, Michigan’s largest and most successful real estate company. To learn more about Norm or the local real estate market in the Milford, Michigan area visit one of his Web sites listed below:

For buyers and sellers –
For first-time buyers –
For people moving to Milford, Michigan –
For people in distress with their home –

For people interested in the history of Milford Michigan, visit

Wednesday, February 24, 2010

Hows the real estate market in West Bloomfield, Michigan?

I don't track the West Bloomfield, Michigan market on a weekly basis any more. I did that for a couple of years because I used to live there and because I still go back for church there, plus I have lots of friends and prospects in that area. I've had some nice listings in the area and still solicit business there and show houses there quite often.

So, I thought I'd post this update on how the real estate market is doing there. As you can see, the West Bloomfield market has been tracking with the general market trends of declining home values; however, it is one of the local markets that has experienced an upward turn in early 2010, with home valued rising a bit. Whether that turn is just an anomaly or portends a real change in the market, we shall see.

Real Estate Market Chart by Altos Research

As for the inventory, it continues to track downward, which is a good thing - getting excess inventory off the market will help stabilize things. So far in 2010 there have been 89 homes sold (above a cut-off price of $20,000) at a Median Sale Price of $190,000 and after spending an average of 118 days on the market. There are still 472 homes listed in West Bloomfield Township at a Median Listed Price of $263,450 and they have averaged 211 days on the market. I didn't look at the foreclosed and short sale data to see what percentage of the sold homes were in those categories, but if it tracks with the market it would be about 60%. If you'd like more information about homes available in the West Bloomfield market or if you are in that market and would like to know specifically what your home might be worth now, give me a call or send me an email.

Norm Werner is a full-time, full-service Realtor working out of the Milford office of Real Estate One, Michigan’s largest and most successful real estate company. To learn more about Norm or the local real estate market in the Milford, Michigan area visit one of his Web sites listed below:

For buyers and sellers –
For first-time buyers –
For people moving to Milford, Michigan –
For people in distress with their home –

For people interested in the history of Milford Michigan, visit

Tuesday, February 23, 2010

The real estate market in Brighton,MIchigan

Today we look at market conditions in Brighton, Michigan, the sixth of the six local townships that I track on a weekly basis in my market area. As you can see from the chart below, the Brighton market, which is comprised of the City of Brighton and Brighton Township, along with portions of Genoa and Marion Townships, is on much the same trend lines as most of the markets that I track. The Brighton market had a brief up tick in Q2/Q3 of 2009, but fell again in later Q3 and through Q4 and into 2010.

Real Estate Market Chart by Altos Research

Of course the trend line for inventory is down, too; which is also consistent with the Southeastern Michigan market trend. So far in February 80% of the 5 homes that have sold were distressed properties and 68% of the total of 17 homes that have sold in 2010 were distressed. Apparently we are still selling of the foreclosure inventory in the Brighton market.

The Median sale price so far in 2010 is $128,000 and the days on market for those that have sold in 2010 was 80 days. That can be a bit deceiving, since the days on market for the current active inventory of 184 homes is up around 179 days with a listed median value of $199,900. That gives you some perspective on how slow the upper end of this market is, just like in the other markets that's I've reported upon.


Norm Werner is a full-time, full-service Realtor working out of the Milford office or Real Estate One, Michigan’s largest and most successful real estate company. To learn more about Norm or the local real estate market in the Milford, Michigan area visit one of his Web sites listed below:

For buyers and sellers –

For first-time buyers –

For people moving to Milford, Michigan –

For people in distress with their home –

For people interested in the history of Milford Michigan, visit

Monday, February 22, 2010

The real estate market in South Lyon and Lyon Township, Michigan

The South Lyon and Lyon Township market is one of the few in the area where new building is still going on. It may have slowed quite a bit, but it is still going on in several big developments in the township and city. As you can see on the chart below, the trend in Median sale prices in South Lyon and Lyon Township appears to have bottomed out in the 4th Qtr. of 2009 and has been bumping along the bottom since then. Recently it even turned up again, with homes gaining a bit of value - a good sign of some stability in the market.

Real Estate Market Chart by Altos Research

On the inventory front, the South Lyon and Lyon Township market is following the trend that I've seen in all of the local markets, with inventory falling throughout 2009 and into 2010 - another good sign, as that means that we are working off the foreclosure inventory overhang.

So far in February all four of the homes that have sold in this market were foreclosures or short sales and of the 23 that have sold thus far in 2010 80% were in that category. The median sold price so far in 2010 is $172,000 and homes have moved fairly quickly with an average for 2010 of only 77 days on market. That is a bit deceiving, since the average days on market for unsold homes is still 81 days at the low-end of the market (under $100K) and over 190 days for the upper end of the market (over $400K). There are 135 homes listed in this market right now at a median listed price of $199,700. The median listed price works out to be $80 per Sq Ft for this market, with the median sold price running right at $77 per Sq Ft.

To see all of the statistics that I collect and report on weekly for the South Lyon/Lyon Township market, go to my Milford Team website (link below). There are many more charts there, as well as the details on what has sold in that market thus far in February and for the year and years past.


Norm Werner is a full-time, full-service Realtor working out of the Milford office or Real Estate One, Michigan’s largest and most successful real estate company. To learn more about Norm or the local real estate market in the Milford, Michigan area visit one of his Web sites listed below:

For buyers and sellers –
For first-time buyers –
For people moving to Milford, Michigan –
For people in distress with their home –

For people interested in the history of Milford Michigan, visit

Sunday, February 21, 2010

The real estate market in Commerce Twp, Michigan

Commerce Township is one of the two markets in the areas that I track that had a turn around in the trend line of Median Home Prices - turning upward in early January, 2010, and still tracking in that direction as of today.

Real Estate Market Chart by Altos Research

The inventory line for home in the Commerce Township area is still trending downward and that's a good thing, since it helps to stabilize home prices. This may mean that Commerce Township has worked off its overhang of foreclosed homes and is now returning to a more normal market.

In February, as of last Sunday, there had been 14 sales and 74% of them were foreclosures. There had been 36 sales so far in 2010 at a median sale price of $185,500 and with a Days on Market average of 153 days. There were 246 homes on the market as of last Sunday at a median listed price of $239,900.

For all of the statistics that I collect on the Commerce Township market and the other five markets that I track weekly (Milford, Highland, White Lake, Lyon/South Lyon and Brighton Townships), go to my Web site and click on the Real Estate Market Statistics link. You will also find there a link to the monthly details of what has sold in each township, which I also update weekly. That report will give you things such as the asking price vs sold price and the sold price vs. the SEV. It also shows the asking price cost per square foot and the sold price cost per square foot - good data to have for a market area if you are shopping for a house or about to list a house.

I also track the Days on Market averages and the inventory levels for each market, sorted and displayed by $100K price bands. That is good info too, since it can show you which areas have the most homes that might fit your needs and how long they are sitting on the market (and thus the sellers willingness to negotiate with you).


Norm Werner is a full-time, full-service Realtor working out of the Milford office or Real Estate One, Michigan’s largest and most successful real estate company. To learn more about Norm or the local real estate market in the Milford, Michigan area visit one of his Web sites listed below:

For buyers and sellers –
For first-time buyers –
For people moving to Milford, Michigan –
For people in distress with their home –

For people interested in the history of Milford Michigan, visit

Saturday, February 20, 2010

The real estate market in White Lake, MIchigan

The real estate market in White Lake, Michigan has been kind of bouncing along the bottom for the last six months, in terms of home values. They had fallen dramatically over the last few years, but seem to have stabilized.

Since the beginning of 2010 there have been 36 sales in White Lake of homes with values over $20,000 (there may have been a few under that price, but that's my cut-off doe tracking purposes) and the median sale price has been $185,500. Those houses spent an average of 153 days on the market. There were 246 homes on the market in White Lake, Michigan as of last Sunday. The chart below shows the trends for home values and the inventory in White Lake-

Real Estate Market Chart by Altos Research

As you can see the inventory in the White Lake market, like all of the markets that I've been reporting upon is still falling. That's a good thing and hopefully means that we are working off the inventory overhang from the rash of foreclosures last year. So far this month, only 45% of the 11 homes that have sold in the White Lake market are foreclosures, which is quite good; since the overall rate in the six townships that I report upon is still above 60%.

For all of the data that I track about White Lake, Michigan and the other five townships in my market area, go to my Web site at click onthe Real Estate Statistics choice. Remeber that you can also search for all of the properties on the market in White Lake, Michigan at that site.


Norm Werner is a full-time, full-service Realtor working out of the Milford office of Real Estate One, Michigan’s largest and most successful real estate company. To learn more about Norm or the local real estate market in the Milford, Michigan area visit one of his Web sites listed below:

For buyers and sellers –
For first-time buyers –
For people moving to Milford, Michigan –
For people in distress with their home –

For people interested in the history of Milford Michigan, visit

Friday, February 19, 2010

What's happening in real estate in Highland, Michigan

Highland, Michigan is one of the six local Township markets that I track on a weekly basis. Some of those markets have recently had a sort of revival, turning upward in terms of the median value of homes that have sold. Highland median home values had a renaissance of sorts at the end of last year, but has trended down again, with home values continuing to slide year-over-year.

Real Estate Market Chart by Altos Research

The inventory on the market continues it's fairly consistent slide as the foreclosure overhang is worked off. Foreclosed homes continue to represent more than 50% of the sales in Highland, at least so far in February, with the Median sale price in February at only $88,000 through last weekend. Obviously lots of very inexpensive foreclosed homes have sold recently and there are more out there if you are looking for a bargain.

You can see all of the data that I collect and present about Highland, Michigan at my Milford Team Web site, including the details of exactly what has sold so far in February (data for prior months is there, too). As of last Sunday there were 155 homes on the market in Highland Township, Michigan and you can search for all of them at my Web site. Click on the Real Estate Statistics choice on the home page. If you're looking for a home in Highland or have a home to sell, give me a call. I know the market in Highland, Michigan.

Thursday, February 18, 2010

So, how's the real estate market?

I get that question a lot, so I want to show you some of the the charts that I keep on my Web sites and invite you to visit them as often as you'd like to keep up on the market. Below is a chart for the Milford Market, both the Township and the Village, that shows a couple of data trends - one for the median price that homes are selling for in that market and one for the amount of inventory on the market. These charts are dynamic, so they are up to date whenever you look at them.

Real Estate Market Chart by Altos Research

As you can see, home values in the Milford market are continuing on the downward trend line that has been the hallmark of this market for the last 3 years, with o end in sight. The inventory level is also dropping, which is maybe a good thing, since that means that we are working off the overhang of foreclosed properties in this market.

So how does this market compare with others around it? Is it all doom and gloom everywhere these days. Not necessarily. You can see all of the charts that I keep for the six Townships that I track on a weekly basis - Milford, Highland, White Lake, Commerce, Lyon/South Lyon and Brighton - at my Milford Team Web site. Here is another example, in this case for Commerce Township -

Real Estate Market Chart by Altos Research

You can see from this chart that the value decline actually turned around in mid-January and has started back up. Will that trend hold and does it portend things to come for the whole market? Only time will tell, so keep going to my Web site and checking on that.

Another thing that I track on a weekly basis are the sold homes in those 6 Townships. I report that data on my Move to Milford Web site, but it is also available at the Milford Team site - click on the Real Estate Market Statistics choice on the home page and then on "What's Sold Recently in the Area Market" choice on that Statistics page . I not only report on what has sold, but calculate and show the averages and median values for such things as the listed prices the sold price, the value per Sq Ft (both listed and sold) and the Days on Market of sold homes. That's good information to have as you shop for homes in those areas.

There's lots of other good data and information available on hose two site. I also track things like the Days on Market and Inventory levels in those six markets and show that data in $100,000 price bands on a PDF charts at
I need to update that chart this week, but it too gives you a valuable insight into those markets. So, if you like to see the data and the trends in those market areas, visit my sites often, If you have questions or suggestions for other things that you might want to see, send me an email.

Tuesday, February 16, 2010

Great place for daily real estate news

Here's a link to a daily video site on the Web that focuses exclusively upon real estate news -

The site is called Think Big Work Small and it features two guys who put out some of the most outrageous and funny stuff that's Ive encountered. You can subscribe to the site and get a daily email feed of their latest video for the day.

This particular video is a remake of an earlier one that they did where they exposed the sweetheart deal that the buyers of the assets of the defunct IndyMac bank got from the FDIC. Basically they can't lose and we, the taxpayers, are footing the bill. What else is new. I suppose that laughing about it helps, because otherwise it would make you cry. In either event you'll also end up a bit angry about this deal.

Anyway follow this link and sign up for a daily dose of real estate news that is presenting in a very entertaining way.

Saturday, February 13, 2010

Let the games begin...

No, I don't mean the Winter Olympics games; although I'm sure those will be entertaining to watch, too. What I was referring to are the political games - the mean season - that comes with political elections every few years. The opening shots have been fired and now the fun (or ugly carnage, whichever you prefer) is underway. The Mike Cox campaigned kicked off the first round of dirty ads by sliming every fellow Republican candidate that they could find, albeit without the knowledge of Mike himself, who is pure as the driven snow on the whole matter.

Admittedly Mike's ad was somewhat in response to that of candidate Rick Snyder, aka. "the Nerd", who kicked things off during the Superbowl by painting everyone else into a political corner with Kwame Kilpatrick, not that they probably don't deserve it, but it just pissed them off.

If you thought reality TV shows such as Survivor or Roommates had drama and back-stabbing and double-dealing and muck-racking; you ain't seen nothing until you get the on-going reality show that is politics in Michigan during a major election year.

Rick managed to tick off not only all of his Republican opponents for the office, but the current office holder Jennifer "Happy Talk" Granholm, who immediately responded with a call for tax hikes.

So far the Democrats have not fielded a strong candidate to replace the current Governor Smiley Face; however, most are happy that her prediction that someone was going to get blown away turned out to be her.

Yesterday The Detroit Free Press reported that Bob Bowman , the Treasurer under the Blanchard administration, is considering a run for governor on the Democratic ticket. Bowman now lives and works in Connecticut, but has a summer place in Harbor Springs, MI. I think that would be great. Maybe having a part-time governor would be the first positive step towards also having a part-time legislature and then we could get rid of the career slimeballs who inhabit Lansing for most of the year. Bowman could jet in to his summer place during the summer months, sign a few bills and be gone before we tired of his happy talk.

If it doesn't work out that Bowman runs, then the Dem's need to find themselves a Nerd, too. How refreshingly boring would that be, to have two candidates more focused upon the real issues that on sliming each other? But that's not likely to happen as long as we have two political parties more interested in mud wrestling than problem solving. I'm already envisioning the candidates out on the campaign trail..

Friday, February 12, 2010


Fannie Mae recently announced a sales incentive to encourage the sale of their REO properties. Local Michigan Bank Flagstar Bank issues the following guidelines for how the program will work.

This new incentive would apply to properties with purchase agreements signed on or after January28, 2010, and are closed and funded on or before April 30, 2010. During the negotiation of the purchase, Fannie Mae is offering buyers an incentive of up to 3.5% of the final sales price to be used towards the purchase of new Whirlpool® appliances. This appliance incentive is considered as part of the purchase price and will not be considered a seller concession. Here’s how the program works:

• Borrowers may negotiate an appliance credit up to 3.5% of the final sales price towards the purchase of new appliances. Fannie Mae will deliver the appliance directly to the new home. Since the appliance credit is considered part of the purchase price, this credit will not be reflected on the HUD 1 settlement statement.

• In addition to the appliance credit, the borrower may still negotiate up to 6% of the final sales price to be used towards seller contributions for the payment of closing costs and prepaids, not to exceed the actual amount as outlined in the current product description. Example: buyer could get the 3.5% appliance credit AND up to 6% in closing costs. In no case, however, can the closing cost credit exceed 6%, even if they don't use the whole 3.5% for appliances.

How does the lender know what option has been selected by the borrower?

Section 38 of the Real Estate Addendum will note what amount is being contributed towards closing costs and/or pre-paid and what amount is being credited for appliances. If the borrowers change how they wish to utilize the incentive prior to closing, a new Real Estate Addendum may be required. If the language in the purchase agreement includes “up to” or “not to exceed” for either closing costs or appliances, and the actual amount is less than the amount stated in the agreement and meets program guidelines, an amendment is not necessary. However, if the funds were previously divided between appliances and closing costs and change to all appliances or to all closing costs (or vice
versa), an amendment would be required. If a new amendment is required, it must be submitted for underwriting approval prior to closing.

Product Eligibility:
• Fannie Mae Homepath (Doc. #5349).
• Fannie Mae Homepath Renovation (Doc. #5721).

Property Eligibility:
• Primary Residence.
• Second home.-

• Investment property.
• Conventional financing

So, you can buy a foreclosed house in which the previous owners (or perhaps vandals) have stripped out all of the appliances and now you can replace them with brand new appliances at Fannie Mae’s expense. Sweet! That probably will help move some of the stripped hulks that are sitting out there on the market.
Now, if we just get them to replace the cabinets, stolen copper pipes and toilets and sinks, we’d have a great program to deal with what we’re seeing out in the market. I suppose that there should be a program that evaluates whether a house is really worth saving and opts to tear it down if it isn’t worth cost and effort to rehab it.

Thursday, February 11, 2010

It’s all about drive-by-wire…

With all of the hoopla and news coverage about the Toyota recalls what has been lost in the noise is that all cars are somewhere in the process of shifting over to drive-by-wire systems in major areas like the speed/acceleration control (the thing that we quaintly still call the gas pedal), the braking systems and the steering systems. Older readers will smile knowingly when I mention that I remember when cars had carburetors (you can still see those relics on some street rods) and those carburetors were actually attached to the gas pedal with a physical linkage. When you stepped on the gas the carburetors air flap would move and gas would either be drawn into the intake air stream or in some cases squirted into it. How quaint is that?

Now days when you “step on the gas” you are likely just moving the arm of a rheostat somewhere, which is them signaling a computer chip somewhere else and causing one or more solenoids to move to open the air flap and commanding the fuel injectors to spray more fuel into the intake manifold. You are driving by wire ands there is no physical linkage between the pedal that you still push and the engine components that control acceleration and speed. Some nice little computer interprets what you are doing with your foot and sends commends to other components, based upon a computer program that it has stored inside.

The same thing is starting to be true of both braking and steering in many cars. The issue that was just recently uncovered with the Toyota Prius is one that is caused more by the little program in the braking computer than anything else. Cars will also soon have electronically assisted steering, rather than the old hydraulically powered power steering. Then, some little computer somewhere in the car will evaluate what you just did with the steering wheel and factor in things like the vehicle speed and maybe input from other sensors, like anti-skid sensors, plus input from the brake computer and maybe the engine control computer and it will decide how much electronic assistance to render with what you are trying to do (make a turn, in case you forgot).

So, driving our cars has slowly become more like playing a video game than a real mechanical interaction with the car. There’s not anything wrong with that, I guess; however, I’ve been around computers long enough to know that you can never be 100% sure that they are going to operate as planned and as required. Earlier versions of drive-by-wire had some problems with those little rheostats going bad, since they are basically mechanical devices themselves. Volvo had some rheostat issues with their early drive-by-wire implementation for the gas pedal, as I recall.

Now we hear that Toyota is going to reprogram the brake computer on their Prius and we see pictures of dealership personnel sitting in recalled Toyotas cars with laptop computers hooked up, apparently reprogramming some part of the computer code that controls the engine (the gas pedal). In both cases the Toyota folks have discussed putting failsafe code into those little computers so that they can’t unintentionally make the car accelerate or maybe refuse to apply the brakes. I suppose they will reprogram recalcitrant steering computers, too. One has to wonder; however, why fail safes weren’t built into the computer code to begin with? Did someone make a “this is good enough” decision somewhere in Toyota and who is making similar decisions in the rest of the world’s car companies?

There is now more computer power built into most modern cars than was on-board the lunar spacecraft that made it to the moon and back. That means hundreds of thousands of lines of computer code (maybe millions of lines) and the probability of at least a few errors in the code, even if they are mainly errors of omission (no fail safe code). I shudder to think that my car may have a glitch and need to reboot someday while I’m cruising down the road at 70 miles per hours and need to brake or turn or accelerate. It’s one thing to watch Super Mario slam into a wall in the video game and quite a different thing to see myself heading towards the wall with a car that won’t respond to my computer inputs.

Wednesday, February 10, 2010

Don’t let the smiley faces fool you…

I try to keep a positive attitude and to project that with clients; however, I refuse to be the devil in the smiley face mask, trying to paint a rosy picture of the current market in from of potential listing clients. We are still in a crappy market, especially here in Michigan. Our unemployment continue to run 3-4 points higher than the national average and almost all of our local markets are still declining in terms of home values.

So why would anyone put on the smiley-face mask and lie to potential sellers, just to get the listing? Well maybe the devil made them do it. The fact is that anyone who bought a home in Michigan within the last 8-10 years should consider themselves lucky if they are not underwater already or about to sink under the surface. Those who bought in Michigan in the last 7 years are already there and those who purchased at the peak, about 4 years ago are likely closing in on a 50% loss.

Well, gee, Norm, thanks a lot for making my day!

That’s not my job. If you want to feel good hire a comedian or a clown to follow you around doing funny things. But, if you want to (or need to) sell your home, then you need someone like me who will tell you what it is really worth in today’s market and who will do the best marketing job possible to get potential buyers through it. I am, however, not Mandrake the Magician (Wow, that dates me, doesn’t it?) and I cannot gesture hypnotically and make the market magically pay more for your house that the market will bear.

So, beware the devils in the smiley face masks that you may also interview. The good feeling that they will give you will last about as long as a good Friday night buzz and the hangover you’ll likely get from dealing with them could be the worst one you’ve ever had. It ain’t pretty out there right now in the real estate market, but things are selling. Price it right and it will sell. Can’t afford to price it right? Then don’t sell. It’s not rocket science, just common sense.

We now return you to your favorite reality TV show in progress; and, no, “The Biggest Loser” isn’t about real estate sales, even though it may feel that way to you sometimes.

Monday, February 8, 2010

Hope srings eternal...

“Hope may play traitor at times, but she is so agreeable that we forgive her offences for the sake of her company.” (Minna Thomas Antrim) from the Jack’s Winning Words Blog. Minna wrote those words over 100 years ago, yet they are still relevant today. Every now and then hope lets us down, as I’m sure the Indianapolis Colts fans would agree this morning; however, the warm embrace of hope is always preferable to the cold despair of having no hope.

These days keeping hope alive is one of our biggest jobs as Realtorsâ and we have multiple clients for that task. We must work hard to give hope to sellers that they can find a buyer in this down market. We keep hope alive in young buyers as they troop through shabby foreclosed house after house looking for that perfect bargain. And, we must spend time each day re-invigorating our own hopes and dreams as Realtors (sometimes that is the biggest challenge of all).

The nice thing about hope is that it is a lot like faith. In fact, perhaps hope and faith are part and parcel of each other. Certainly one cannot have faith without also having the hope of all that faith promises. Likewise, hope for success in business is based upon faith in ourselves; the belief that if we continue to do the right things success will follow. Those who cut corners or abandon their integrity seeking short cuts to success may appear to be happy in the short run, but eventually their moral bankruptcy catches up with them and they are left without any true sense of accomplishment or pride.

So let us start a new week by embracing hope anew and re-dedicating ourselves to working hard and doing the right things. I’m sure that Minna would have also liked these words by Fleetwood Mac:

Don’t stop thinking about tomorrow,
Don’t stop it’ll be here soon,
It’ll be better than before,
Yesterday’s gone, yesterday’s gone.

I’ll bet that is the song of the day in Indianapolis.

Saturday, February 6, 2010

What is emerging science?

Do you ever see or listen to one of those commercials, usually for some over the counter nutrition or health product that says, as a part of the commercial, “which emerging science suggests may…” and it goes on to make some claim about curing whatever it is aimed at or assisting you in not losing your mind or whatever. Have you ever wondered what emerging science is? Where is it emerging from and why was it kept hidden from us for so long?

By definition, a science is something that relies on repeatable and verifiable testing of hypotheses to reach a conclusion. In so-called hard sciences, like physics and chemistry, there are repeatable formulas or experiments that can be do to prove the things that those scientists now proclaim to be true. Once provable, those things become accepted by all , with the highest level of acceptance being that some things become laws, like the laws of physics.

Now, in the softer sciences, like medicine and general health care there is also a scientific branch that conducts experiments (actually they call them tests or trials, since calling them experiments might alarm the people upon who they are testing. Their experiments go like this - a bunch of you take this (or do this) this and another bunch doesn’t and we watch all of you over time to see which bunch gets well or feels better over time. The bunch that is not getting whatever is being tested is usually given something called a placebo – a fake pill (usually just a sugar pill) or treatment – so that they think they are getting the same thing as the group that s getting whatever is being tested. Many times people in the group getting the placebo actually end up getting better, too; a phenomenon called ”the placebo effect.” I’ve often listened to the test results where the placebo group did well too and thought, “Damn, I got to get me some of that placebo stuff. It works good.”

But, now we also have “emerging science,” which might also be called "stuff that nobody really understands"; but that would sound dumb. Apparently emerging scientists do not do the rigorous testing that real scientists do, so they don’t declare things with great certainty; instead they suggest things. Emerging science suggests that Ginkgo Biloba somehow helps people keep a sharp mind longer, may help prevent dementia and may help with blood flow. There have been some studies and reports from prestigious medical facilities to support those theories and others that refuted them. There are hundreds of other products that are unregulated and sold in drug stores and nutritional-supplement stores that make claims based upon emerging science. These products are unregulated because they are natural products (found in some plant somewhere) and because no one has yet found that smoking or eating them makes anybody high.

Now, I’m not one to say that scientists, especially those scientists associated with the medical sciences, have all the answers or that only they can be correct about the benefits of some alternative treatment or medicine. The medical establishment has to much self-interest at stake to be completely unbiased, which is another cornerstone of true science. The arguments continue to rage decades, even centuries, after alternatives to traditional medical practices were discovered or invented. “Real doctors” still hesitate to recommend chiropractic treatment or acupuncture or meditation and biofeedback, which emerging science suggests may help many patients. Pills and surgery seem to be the preferred treatments of real doctors, although one wonders how many are really prescribing placebos for their patients.

So, we are left to wonder about these emerging sciences. I suspect that the word sciences is used to give us all a better feel about these things, whether they have had any real science applied to them or not. Certainly many of these natural cures or supplements have been around for a long time. One of the best know is Dr. Kilmer’s Swamp Root, which emerging science suggests may help with digestive and urinary track ailments. I was going to pick up a bottle (Yes! You can still buy Dr. Kilmer's Swamp Root herbal tonic) , but I forgot to take my Ginkgo Biloba and it slipped my mind.

Friday, February 5, 2010

Coming soon to your neighborhood – vacant homes.

The percentage of vacant homes in the U.S. rose from 2.6 percent to 2.7 percent in the third quarter of 2009, the U.S. Census Bureau reported Wednesday. There were 2.09 million vacant properties available for sale, up from 1.99 million, the Census said. This number includes both listed properties and those that banks are holding without listing. I suppose that the headline above is too late for most neighborhoods. There are vacant or abandoned homes in almost every neighborhood, no matter how rich those neighborhoods may look to the casual observer.

In fact in some areas there are likely more vacant homes in the upscale neighborhoods than in the more modest areas. Do you recall that cute ad with the guy talking about all his stuff , his kids expensive activities, his club memberships and his big house? Remember how it ends? With him saying “Help Me!” He was the poster child for the excesses that lead to a lot of the mess that we are still in today.

What may be a little frustrating to us as Realtors is that phrase above about the banks holding houses off the market. We certainly know that to be true and it’s beginning to feel a little like the Chinese death of a thousand cuts. Instead of unleashing the tsunami of foreclosed homes that we know is out there, the banks are dribbling them out a few at a time, in hopes of holding up prices/values. It’s not working! Values continue down and the market gets more and more acclimated to the “foreclosures of the week” – newly released bargain basement McMansions. If anything the homes that were held back have lost more value while they sat in inventory and will continue to lose in this market.

Here’s an idea for the government that would help create jobs and help solve the current housing crisis – tear them all down. That’s right; every time that HUD gets a house back or FHA or Fannie or Freddie, just send out a wrecking crew and tear it down. Of course there would have to be a big buildup of home demolition crews; so, jobs would be created by that demand. Then, when enough of the foreclosed houses had been torn down there’d be demand for more new homes, so the building industry would recover with more jobs being created.

As a by-product of the process of demolition lots of new open spaces would be created which could become parks or community gardens – more jobs for landscapers or farmers.. And, of course, along with the wailing and gnashing of teeth there would be people organizing protests against this carnage and they would need signs and other protest provisions, so more jobs would be created.

Out of all of this new job creation would come a hunger for bigger and better homes and the banks could create new financial products to make it easier for those workers to get bigger and bigger homes until…oh, wait; we’ve been done this path before. Never mind!

Thursday, February 4, 2010

Is this really the new normal?

Source: Inman News (02/01/10) - In a new study, "Housing in America: The Next Decade," Urban Land Institute senior resident fellow John McIlwain says the housing market will not return to what it was prior to the downturn but rather that a "new normal" will take its place.

He expects another 10 percent decrease in residential prices this year, a jump in the number of borrowers abandoning "underwater" mortgages, and a change in consumer perceptions of homeownership.

He expects home price appreciation to hover around 1 percent or 2 percent per year after the market recovers and the national homeownership rate to drop from 67 percent currently to 62 percent by 2020.

In the coming decade, McIlwain expects the following:

  • Older baby boomers to move to urban, mixed-use, mixed-age centers near family instead of retiring to Sun Belt communities;

  • Immigrants to snub the suburbs in favor of more close-knit communities;

  • Younger boomers to face the challenges of lost home equity and a smaller pool of move-up buyers;

  • Generation Y to rent for long periods by choice or because they are paying off student loans or have stagnant incomes.

I’ve opined several times here about what I had already called the “New Normal” in our society or economy and the real estate market. McIlwain’s study covers areas that I had not considered, but the overall gist is much the same. If you read the four bulleted lines you can see that the real estate market will be vastly different than it was in the past.

In Michigan we are already feeling the impact of the loss of thousands of people as they move out of state to seek work. We have lost over 1 million people this decade and the drain continues. Our move-up market has been particularly dead, since people were moving out to move up. Almost all of our new-build projects have stalled out and most of the developers and builders have gone out of business or left the state, too. We have already lost 30-40% in most areas and the projected further losses will leave most properties at less that 50% of the value that they were at only 4-5 years ago.

So does this all portend Michigan becoming a vast wasteland of abandoned houses and run down suburban neighborhoods. It probably won’t get that bad, but it could get close. We haven’t really fully felt the impact of the automotive industry realignment that is going on right now. Brands are still in the process of being shut down, along with the plants that build them and the plants of their suppliers and the plants of the third-tier suppliers and on down the line.

We celebrate every announcement of some new windmill plant or movie studio being built in Michigan, but the reality is that only a few hundred of the thousand that have lost their jobs in automotive are going to end up making windmills or working on movies. We are undergoing a fundamental reset in our state’s economy without the benefit of any real leadership from our state’s politicians and bureaucrats who are busy arguing with each other and trying to save their own jobs and benefits.

For a Realtor this means getting used to selling short sales and foreclosures; but, to whom? Local investors can only buy up so much property and we will soon run out of first time buyers, who have been the backbone of non-investor sales at the bottom end of the market. I suppose that we could start selling our homes to the Indian and Chinese, since they have the manufacturing jobs that we lost and the money that we no longer make here. They might as well also become the landlords of a bankrupt America.

Wednesday, February 3, 2010

The sins of the past are visited upon us all…

From The Wall Street Journal, Nick Timiraos (01/30/2010)

Accountants at Fannie Mae and Freddie Mac are auditing mortgage files to uncover loans with improper documentation about a borrower’s income, and then forcing banks and savings and loans to buy the loans back.

Freddie required lenders to buy back $2.7 billion of loans in the first nine months of 2009. Fannie Mae won’t disclose its figures, but the mortgage trade publication Inside Mortgage Finance said Fannie made $4.3 billion in loan-repurchase requests in the first nine months of 2009. One result is that banks are underwriting mortgage loans even more carefully than they were last year, which can further slow the lending process.

So, in the end, not only did the American taxpayer have to foot the bill for the sins of the lenders, now would-be American homebuyers are being held up by the increased demands of the lenders on new loan applications – demands caused by their reaction to their own past sins.

You never seem to see stories on the news about the hardships of being a fat cat banker, just about the hardships that they caused for others – investors that they lead down the primrose path and now would be borrowers who are being held up by their new rules. Yet not a single banker has ever been shown being thrown out of his McMansion by the sheriff. What a shame. That would make a great perp-walk video for the news. Instead they troop up to Capital Hill, say a few meaculpas and walk away with enough cash to pay obscene bonuses. Talk about people who are the bottom of the litter box!

What can the little guys do? For one they can stop bowing and scraping to these fat cats and go join a credit union and borrow for their mortgages there. The credit unions are the only ones who not only didn’t engage in most of the suspect practices of the big banks, but they are also still lending while the fat cats sit back and count their bailout money and tell would be borrowers to go to hell. Can’t get a loan from the credit union? Well, maybe you should thank them for having the sense to turn you down, rather than make a bad loan to you and get you into even more trouble.

Tuesday, February 2, 2010

My own Groundhog Day...

“What would you do if you were stuck in one place and every day was exactly the same, and nothing that you did mattered?” (Phil Connors) - from the movie, Groundhog Day. Indeed, many of us are stuck in the same place every day and don’t realize it. We tend to do the same things, to get into ruts that feel comfortable, even if they aren’t very productive. That’s true of our personal lives and of our professional lives.

It’s really a human nature thing to seek a comfort zone and stay there, unless rooted out by some un-natural happening. Sometimes that may be the biggest contribution of the so-called life coaches that are everywhere these days – to force you out of those comfort zones and into stretches that will improve your life. That’s a role that my office manager sometimes plays for me. Every now and then we all need a little kick in the rear to get started or to change direction and she provides that; mostly in a positive, encouraging way, rather than criticizing. My wife will occasionally be even more direct, telling me to stop being Eeyore, if I’m a little down or negative on something.

For those who saw the movie, the character Phil Connors (played by Bill Murray) was initially freaked and bummed when he realized what was happening. Then he went through a crazy period (the intentional car crash scene – since he knew he’d be alive the next day again). But, then he decided to do some positive things to change the reoccurring world around him; becoming a doctor and surgeon to save the little boy who fell from the tree and learning play the piano to help out at the dance.

I think that is the key to success in our lives too. Even though every day feels a lot like the last, we should starting doing things to improve ourselves and bring change to the world around us. Perhaps it will be something that has great positive impact on the lives of others or perhaps it will just be something that gives us a more fulfilled feeling or sense of self-worth. There are certainly opportunities everywhere in every community for volunteer work or charity causes that need our help.

One of my annual opportunities to help is coming up soon. We host a Lenten soup supper at our church every year. Every year for the last 5 years I go and help with that. The supper is run my the ladies of the church and they don’t really need my help with most things, but I did discover that none of them really liked bussing the tables and doing the clean-up work during and after the supper, so that’s what I do. I’ve found that choosing to doing the jobs that no one else really wants to do can be very satisfying and fulfilling. There are always jobs like that in any endeavor.

Yesterday, I had the opportunity to see one of those jobs in real estate. I was on floor duty when a gentleman walked in and started looking around. Of course, I did the standard pop-tart routine, “Hi may I help you?” He told me that he’d been to several real estate offices and no one wanted to help him. He was looking for a very inexpensive home (under $20,000 and probably a HUD house). He wasn’t yet pre-qualified and some agents had told him that they wouldn’t even talk to him without a pre-qualification. Sound like something you might do?

Anyway, I spent about 30 minutes with him, pulling what listings I could see on the MLS (he also was looking in the next county over which made the MLS search a bit less productive, since the MLS from that county doesn’t exchange data with th MLS in my county) and I showed him how to find HUD homes on line. He left with a hand full of listings to investigate (I recommend drive-bys first) and my card. I told him that I’d refer him to a good agent from our company over in that county, if he wanted someone to help him there. Will I ever hear from him again or get anything out of this? Who cares, it was the right thing to do and it was something different in my otherwise Groundhog-like day.

Monday, February 1, 2010

Run away, run away...

As things continue to slide in the Michigan real estate market more and more slime is oozing out from under rocks, as slick operators try to take advantage of other people's misfortune and gullibility. There is an increasing number of noisy ads and more and more roadside signs all claiming that the advertiser can somehow magically get rid of the foreclosure wolves at your door and get the banks off your back.

Folks, when you see and hear these things, run away as fast as you can. Be especially leery of anyone who asks for money up front to help you out of your credit or foreclosure mess. And absolutely slam and bolt the door on anyone who suggests that you sign your house over to them and renting it back from them as a part of a foreclosure workout. These are scam artists trying to take your money and your house. They end up with your house and you end up still owing the mortgage

If you are in distress, maybe from a job loss or a divorce or a death in the family and are unable to keep up with the mortgage payment, seek help from one of the credible and certified (by HUD) non-profit counseling services that are out there. Here are a few Web sites that will help you find good, honest counseling in Michigan:

There is a chance that you might qualify for one of the Federal workout options under the Making Homes Affordable program, such as a loan modification, so don't give up hope, but don't become a victim of scam artists either

You really don't want to be in this situation and I really don't want to have to help you by selling off your house, but you may end up with no other alternative. Go to my Web site about Short Sales - and read through the material there. Most of it is designed to help you find alternatives to selling; however, if you have exhausted all other alternatives with your bank and they still are moving towards foreclosure, give me a call. I'll put you in touch with a loss mitigation service and we'll evaluate whether or not we could do a short sale of your property. It's not a pretty solution to your problems, but it may be your only option.