Get real...it won't hurt

“When you are real, you don’t mind that it hurts.”  (The old Skin Horse) from the blog Jack’s Winning Words. Jack went on to say -  In the book, How Toys Become Real, a stuffed rabbit asks an older toy how to become real.  He’s told that you become real through magic and through the love of a little boy.  “When you are loved for a long, long time, not just to play with, you become real.”  The rabbit wonders, “Does it hurt?”  Today’s quote is the answer.  It’s like that in real life, too.    ;-)  Jack

It’s the little stuffed rabbit’s question that illuminates one of the biggest the problems in life – the fear that it will hurt. Fears of getting hurt, both real and imagined, often become so great that they prevent any action at all. The answer in this little story also serves as the answer in life. When you are real, when you are honest and genuine with yourself and others, you don’t mind that it occasionally hurts. You have to accept and expect a few little hurts along the way. I’ve found that no matter how big the fear of getting hurt and even no matter how big the hurt turns out to be, tomorrow always comes and I’m there to see a new day.

The story in today’s blog by Jack talks of toys becoming real through the love of the little boy who owns them.  I think you become real through the love of others, but also through the love of yourself. You have to become comfortable and at peace with who you are and love who you are to be real. It’s hard, perhaps impossible, to truly love others, if you cannot first love yourself. So get real with yourself and love who you are and then love others, so they can love you in return. Will it hurt sometimes? Yes, but you won’t mind.

Get in the parade!

The Independence Day Parade is next week - this year it's actually on the 4th of July. Get your group signed up by downloading the parade application at -

http://www.milfordhistory.org/2013_Parade_Application.pdf


There's nothing more American than marching in the 4th of July parade, so get your group or organizaiton signed up and get into the parade! Come celebrate the birth of this great nation in small town America. If you can't or don't want to march, come watch. The parade steps off at 11:00 am at the corner of Commerce Rd and Union St.

I'll see you there!

We don’t make this stuff up – crazy underwriter demands…

Being in the real estate business sometimes means having to try to explain some totally insane things that go on when someone is trying to buy a house. The process of evaluating the credit worthiness of would-be borrowers and assessing the risks involved in making the loan to them falls to a largely invisible group of jokesters called underwriters. You know that these people are hired for the weird sense of humor when you read about some of the totally idiotic things they ask of the would-be borrowers.

A recent article in the Chicago Tribune documents quite a few absolutely absurd requests from underwriters. I often advise buyers not to spend any big money or make any unusual credit purchases between the time that they apply for the mortgage and the closing. The underwrite will see that and it may throw off the debt to earnings ratio upon which an initial approval was based. I’ve seen people fall out of the range that they needed to get their mortgage because they went out and bought some furniture for the new home. That actually makes sense and is the reason that I advise them to wait until after closing to buy anything big, like furniture or appliances. The instances in the Chicago Tribune article just don’t make sense. They are examples of a really broken system that is letting a few people from behind the scenes run amok.

Asking someone to explain in a letter why they changed their name when they got married is insane. Asking someone who makes $40-50,000 a year to explain a $6 deposit to their account is crazy. And asking a widow to explain why her monthly Social Security payments went down after she has supplied a death certificate for her late husband is just pathetic. Yet these and many more are documented in the Tribune article. I just wish they had been able to name the companies and the bozo underwriters who thought that these were necessary things to require of the borrowers.

There is enough complexity and stress in the home buying process for most buyers already, without being subjected to ridiculous requests such as those documented in the Tribune article. This is really an indication of a system gone haywire; of big mortgage companies without the ability to manage their employees or the process. Were it not for the fact that most borrowers don’t have the time to start over with another company, I’d certainly recommend that the borrowers switch companies, rather than deal with the incompetence that these examples demonstrate. You can rest assured that this is just an indicator that you’re dealing with a bad company.

Now, I’m reasonably sure that most underwriters are good, hard-working and honest people who are just trying to do their jobs (as they see it). The issue is; why these people can’t apply a little common sense before making ridiculous demands? Are they under some Machiavellian orders from headquarters to create chaos? Are they judged and maybe even awarded bonuses on how hard they can make the process? Do they work for companies that really don’t want to be in the mortgage business? There must be some explanation other than, “I thought it was the right thing to do”, because that just doesn’t’ make any sense. Then again, let’s revisit the theory that these are truly sick people who enjoy causing havoc in people’s lives. Naw! That can’t be. Can it? Maybe they are all Zombies and this is a way to get into our brains.

It's an emotional roller coaster...relax and enjoy the ride

“Never regret. If it’s good, it’s wonderful. If it’s bad, it’s experience.” (Victoria Holt) from the Jack’s Winning Words blog.

Jack went on to say that Victoria Holt was an English Romance Novelist, but she could have come u with the same advice if she was a Realtor®. My experience has been that every deal seems to be full of both good and bad, so every deal is a learning experience.

I often tell newbie agents to be prepared for an emotional roller-coaster ride in every sale, no matter which side you are on. That seems to be especially true when one is engaged in short-sales. I’ve done a number of them this year and every day is like a suspense thriller, with a cliff-hanger ending. It’s not until you walk out of the closing that one can exhale.

This emotional ride used to bother me a lot more than it does now. It hasn’t gotten any better; but, I’ve gotten better at dealing with it. One needs to start by putting these “emergencies” into perspective and go from there. Real estate issues are seldom really at the life or death level. They just seem that way to some.

Sure real estate sales involve big, important decisions and they can’t be taken lightly; but, that don’t have the gravity of real life and death situations. Once you can say to yourself, “You know what, I’ll still be alive tomorrow, if this deal doesn’t work”, you can go on to using whatever problem solving skills you have to attack the issue, instead of wasting time in anxious worry about it. And, you’ll be banking more experience to help you in the future; plus you’ll be freer to enjoy the good parts.

Looking at the local real estate market...

Our local Multi-List Service (MLS) - RealComp II - released it's stats report for May this morning and reported a record month. Sales were up 1.2% year-over-year to 6,399 units sold during May 2013. That includes all 15 of the markets that RealComp services, which is pretty much the whole metro Detroit and environs area. Not surprisingly the number of listings coming onto the market during May was down 19.5% in the overall area. Oakland County was down 16.7% and Livingston County down 18.5%.

Median sale prices in the MLS entire area where up 35.8% year-over-year.  Oakland County saw an increase of 19.7% to $165,000 and Livingston County seeing a 21.4% increase to $181,450 in May 2013 as compared to last year. The Average Days-On-Market (DOM) for the whole are was 69, with Oakland clocking in at 61 and Livingston at 85 days.

Of all of the sales in May, 7.9% were short sales and 42% were identified as cash sales. Foreclosures in May dropped to 1,784 ( or 28% of all sales) which was a drop of 27.7% from last year, when 2,468 foreclosures were reported. Click here to see the summary report for May from RealComp II.

What does this mean to you? It depends upon whether you are trying to buy or sell. If you have been waiting to sell, now is the time to act. Low inventory levels are driving the current price run-up, but that is not expected to last as more and more people are now back above water on their mortgages. If you continue to wait, you might miss this "sellers' market." Call me today for a free market analysis of your home to see if now is the right time for you to sell.

If you're a buyer it means frustration. There's less to look at and things are selling so fast that you may not even get a chance to bid, unless you are ready when you see the place. Be ready to act. Have your mortgage  pre-approval all done and don't even think about making a low-ball. Sellers are in no mood to play that game and will just ignore your offer and move on to look at serious offers. Let me take some of the frustration out of the search for you by signing you up for our "First to Know" alert program that will send you and email just as soon as a new listing hits the market. You'll be "in the know."

Current needs vs. future value - aging and real estate

I got a call recently from a friend who wanted some advice so that he could better advise some aging relatives. As is more and more often the case these days, the relatives in question are fairly elderly and in failing health. Their ability to deal with the demands or constraints of their own home, which they do not wish to leave, is also fading. They have received some advice about making changes to the house to better accommodate their current needs. This often happens and making some of the changes that might be required can have significant impact on the future sale value of the property.

 

Some things might be fairly minor and unobtrusive, such as putting grab bars beside the toilet and in the bathtub. These could still detract somewhat from the potential future value of the house with some buyers. Other things might involve making major changes to the house, such as taking out a standard tub/shower combination to put in a handicapped-accessible Shower or one of those walk-in tubs that you see advertised. These are great solutions for current issues that the elderly might be encountering; however, they are also likely to be major detractors to selling the house later.

 

Another issue that I get questions about involves whether to take away some space from something – a bedroom, a pantry or a closet – in order to move the laundry up from the basement, where it was located in almost all homes built before the 1980’s. This, too, seems to be a great solution to the failing ability to deal with stairs just to get to the laundry. This project also involves doing some major work, since water supplies and a drain (and a pan under the washer) will be required, as well as electrical work and perhaps a gas line will be needed, as will be venting for the dryer. This is not a small project and the result could well result in greatly diminishing the resale value of the home, especially if an entire room (maybe a bedroom) must be sacrificed to accommodate the first floor laundry re-location.

Quite often as the elderly lose mobility things like ramps to the front door are built or accommodations for walkers or wheelchairs must be made to the inside of the house – for instance widening doorways is often done. Many of these things could have negative impact on future value. Some homes just don't have the layout or space to accommodate things like ramps without them detracting greatly from the curb appeal of the house.

So, what are caring and concerned relatives or friends to do to help? What advice can they

give; and, how can a Realtor help? I certainly don’t try to give council to the elderly or their relatives about what they should or should not do to make their lives easier and more fulfilling; however, I can provide some insight into the impact on the real estate market value of the house, if the changes that might be proposed to their homes to accommodate their current needs are made.  

There is a train of reasoning that goes – the heck with future value; it’s their home let them do what they want to and must do in order to live as comfortably as they can and stay in it for as long as they can. As the owners of the house, it’s up to them to make decisions that might detract from future value in order to give them comfort and a better lifestyle right now. As I get older myself that argument has strong emotional appeal.

An alternate path (one might call it the path of logic) says that they should be advised to take the value that they can get of the place out of it and find a more accommodating place to live out their remaining years, perhaps in an assisted living community. That argument makes perfect sense and normally elicits the perfect storm of protest from the elderly homeowner. There are certainly lots of reinforcing arguments that go along with the logical path – the upkeep of the yard, the general maintenance and upkeep of the house itself and the inevitable point at which it will all become a moot. The logical thinker side of me finds that argument to be strong, too.

So, don’t ask me what to do. I haven’t figured that out for myself yet. You can ask me what the impact on the market value of the house might be if the various age-related projects are done and I will try to answer that question. With an aging Baby Boomer population about to enter this phase of life, it will be interesting to see if the person who has already made the changes to the home to accommodate the safety, mobility and health needs of the elderly might have stumbled upon a positive selling feature instead of a negative. Only time will tell. Stay tuned.

Market Overview for Southeastern Michigan

Ed. - The report below is from our broker - Dan Elsea - who sees things from a different vantage point that I do or than any individual agent would.

In the last two months we have seen the first sign that the market may be moving towards normal. Even though sales continue at a fast pace, new listings entering the market in May were higher than last May, the first year-over-year increase in nearly two years. Although most all indicators show a market heating up (the Months’ Supply of Inventory (MSI) hit a record low of 1.8 months in Southeast Michigan and three year low of 6.5 in Northwest Michigan), underneath those numbers are some signs that Sellers, who have been waiting for years to sell, have noticed the price jumps and are testing the waters.

 

If this trend continues it will lead to a smoother market with more listings and appreciation rates in sustainable single digits. Increasing interest rates will cool some buyer demand as well. Even with a more normal market it will still lean towards a Sellers’ Market, with Buyers outnumbering Sellers because of the buildup of Gen X and Y’s entering the housing market.

 

Home values are continuing to rise in Southeast Michigan at double-digit levels and high single-digits in Northwest Michigan. All markets are improving quickly but some are moving faster than others. By price segment, the under $500,000 market is rising the fastest at over 12%, while the over $500,000 market is moving at around 7%. Within specific submarkets the numbers are even higher.

 

Most all MSI’s are at their low points, ranging from a low of 36 days (Redford) to a high of 3.8 months (Ann Arbor), with most markets under 60 days. In the last two months the most active markets in Southeast Michigan have been Plymouth, Troy, Northville, Redford and Southfield. In the most active segment (under 90 days listing category) for each of those markets, the Months’ Supply of Inventory has actually been zero (i.e. at the current sales pace all listings under 90 days will sell). Washtenaw County is the only market where the MSI is higher compared to last year as a result of both a slowing sales pace and an increased pace of new listings. However, Washtenaw was the first market to move into hyper activity, so it is not surprising it might be the first to settle back to a more normal pace as more Sellers react to the improving market.

Ed. – This report is good for buyers who might now be starting to see more homes to choose from in the market. For seller’s it’s not really bad news; however, it does portend a shift back to more normal sales scenarios and away from the wild, multiple-offer situation that we’ve recently experienced in the market. Sellers also need to refocus back on the basics of keeping the house ready to show and not getting too greedy with buyers.

When you need/want to know...

Which Township that I track started off June without any home sales in the first week of June? Which Townships that I track currently are above $100/Sq Ft in average home sale values and which are lagging behind? Were there more home sales in Brighton Township or Green Oak Township during the first week in June? How does Brighton Township compare to Milford in terms of cost per square foot on sold homes? What SEV multiplier makes sense to use to get a ballpark on the possible sale price for your home in the areas that I track? How is the market doing through May in my area that you track?

The answers to these questions and more are at www.movetomilford.com under the choice - "What have homes in this area sold for?" Visit today to get up-to-date information about your market, if you live in one of the nine areas that I track each week - Milford, Highland, Commerce, White Lake, Lyon, West Bloomfield, Green Oak, Brighton and Hartland.

Of course you can also keep up to date there about what's going on in the Huron Valley area and get information or links to all of the important information sites in the area.

Up, up and away, my beautiful home price…

Report after report continues to show home prices climbing at double digit rates so far this year – 10% a month ago, 12 % this month and projected at 13% next month. IS this cause for concern that another value bubble is forming in the housing market? Not really. This run-up in prices is driven by a single factor – the huge shortfall in inventory, when compared to the demand. It is also being tempered by conservative appraisals that are lagging a bit behind the market prices. Also, even though lenders are back to offering products like the old 10-10-80 mortgages (10% down, a 10% equity loan and an 80% mortgage) they are certainly not offering no-doc loans or lending to people with marginal credit scores.

So we aren’t really seeing another bubble, which was the result of the combination of bad lending practices and an over exuberant market; rather we are seeing a classic example of the supply-demand curve in action. Once the market reaches a point of recovery in values that will allow more people to put their homes on the market, we’ll likely also see a re-balancing of the market back to one where neither the sellers nor the buyers have the advantage.

Like any system that is springing back and forth between too much and too little, this market will eventually find that equilibrium point. In the meantime, hold on and enjoy the ride!

Play it out on your one string...

 “The only thing we can do is play on the one string we have, and that is our attitude.” (Chuck Swindoll) Swindoll went on to say, “Life is 10% what happens to me and 90% how I react to it.” Today’s saying from my favorite local blog – Jack’s Winning Words.

I used to spend an inordinate amount of time worrying about things that I just couldn’t change anyway. I still have occasional fits of anxiety-driven worry; however, I’ve tried to adopt the attitude that I’ll just let the scenario play itself out instead of worrying about all possible outcomes, especially the bad one that one’s imagination can conjure up.

Do you spend time worrying about what might be, instead of going on about the business of actually doing what will be? I saved another saying that appeared in one of Jack’s blogs that seems appropriate to that situation - “Prediction is very difficult, especially if it’s about the future.” (Niels Bohr)

Remember that “What will be will be” eventually turns into “It is what it is” and you really have little control over any of it, except how you act and react to the situation. So, don’t worry, be happy and play on the one string that you have.

Great causes supported by great citizens...

The warmer months in Michigan gets people outdoors and many of them are out soliciting funds for their favorite causes. Some literally stand in the street with buckets collecting for this cause or that. Many host fund raising events, with golf outings being a big favorite at this time of the year. I’m signed up to play golf in the Huron Valley Chamber of Commerce

Golf Outing this month. At the end of last month my wife and I attended the prelude event for the AMP project, which is being sponsored by the Milford Rotary Club, the Huron Valley Chamber of Commerce and the Milford DDA, to build an amphitheater in Milford’s Central Park.

 

My wife and I also regularly give food and clothing items to the Community Sharing group in the Huron Valley, as well as to Purple Heart and the Salvation Army. Community Sharing runs a wonderful service for people in need of temporary help with food for themselves and for their pets, as well as offering other services to those same people. Community Sharing has a golf outing coming up, too, on June 28. Click here to read the Community Sharing Golf Outing flyer.  You can get the details about many of the upcoming charity events at my web site www.movetomilford.com.

 

One event that I wanted to highlight is the upcoming kick-off fund-raiser for the Village Fine Arts Association (VFAA), which will be held from 6 – 8 pm on June 15 at 210 Main St. The VFAA is raising money to fund the creation of a center for artists to use which they call the SHAC. That acronym stands for the Susan Haskew Art Center. You can read about what this art center is envisioned to be by clicking here. If you want to know more about the event itself, click here. Appreciation of, and support for, the arts is a hallmark of a vibrant community. Certainly the AMP and SHAC projects show that the commitment to the arts is strong in the Huron Valley.

 

Much of what used to be funded by grants or direct funding by governmental organizations now depends upon volunteer organizations. Milford and the surrounding Huron Valley area are blessed to have so many volunteer groups doing so much good work to make this area a better place to live. So, check out the various upcoming fund-raising events on my web site and decide upon which you can support this year. I’ll probably see you at a few of them.

 “Sometimes you’ve got to jump off cliffs and grow wings on the way down.” (Ray Bradbury)

Life is full of opportunities to use Bradbury’s saying. We all face things that we’ve never done before or challenges that we have no idea how to overcome. The timid just back away from such things, while the adventuresome take Bradbury’s advice to heart and jump off the cliff of uncertainty and figure things out (grow their wings) on the way down.

I’ve always tended to initially be cautious, perhaps overly so; however, I’ve also found that whenever I do just jump off the cliff the results have been exciting and fun. 

 

Are you the adventuresome type or do you steer clear of taking chances on unknown things? You’ll never grow your wings if you don’t try to fly.