We are already in the aftershock recession...

The real estate market in Southeastern Michigan has slowed as rising prices and lack of available inventory sent many would-be buyers to the sidelines as the year winds down. See the attached report from our broker, Dan Elsea -

http://reofamilymarketing.com/wp-content/uploads/2018/10/Bro_HousingReport_Q3_2018_REO_Dynamic.pdf

There is an inclination to just attribute this slowdown to a normal seasonal pattern; however, I believe that we actually seeing the leading edge of the next recession. There are other subtle indicators in the retail markets and elsewhere that reinforce my "gut feel" that what we are seeing right now is the quiet before the storm of another recessionary period.

The Wall Street gang would like us to believe that the recent volubility and drop in the market is just an "adjustment"; but I think it is more of a pullback by people made cautious by the last recession. Many people are starting to hunker down in anticipation of a few years of the pain of this recession.

I would compare this recession to an aftershock following a major earthquake. We had the major quake in the so-called "Great Recession" of  December 2007 to June 2009. At the end of that period there was an attempt to "return to normal", fueled by a Wall Street Rally that was based largely on great expectations. Stocks rallied and there was an expectation that wages would soon follow them up. That did not happen. Employment when up, but the jobs were mainly part time and lower paying that before the Great Recession.

In fact, the Great Recession was the final death knell of the Middle Class working man - the union workers who, with overtime, could afford the bigger houses and the toys that went with the Middle Class lifestyle. Wall Street used the downturn and the changes in political power that occurred in Washington at about the same time to emasculate the unions and decimate the working Middle Class. The rich got richer at the upper end and more of the middle class was pushed down to join the poor at the bottom.

So this "aftershock" recession is actually the a reflection of the reality of people's lives finally matching their circumstances, rather than being fueled by the credit-driven optimism that Wall Street was pushing. The Wall Street band was playing "Happy Days are Here Again" and encouraging people to spend, spend, spend with credit in the hope that wages would rise and allow that credit to be paid off. Didn't happen! Not going to happen. The realization that a raise is not forthcoming is settling in and the valves of the credit-fueled recovery are being cranked shut.

Add to that the likely mid-term shift in the political environment in Washington and you have the classic ingredients for a recession. The good news is that the credit overhang in the general population (especially in real estate) is not quite as bad this time and the measures taken after the Great Recession have strengthened our financial system and positioned it better to ride this one out without bailouts.

That recession also took America down a notch in the order of things in the world. At the same time China was on the rise and India was awakening as an economic power. America is still the only "great power"; just maybe not as great in relative terms as before. That s another new reality that most have not yet figured out how to deal with for the future.

So, remember that you read it here. We have already entered the "aftershock recession" of 2018. How long this will last and how deep the "adjustment" will be are yet to be determined. I don't think it will be as long or as bad as the Great Recession; which I believe should be renamed "The Great Reset", because it did cause a wholesale reset of the economic and social structure of America.

I'll see you on the other side.

A nation hunkered down...

In today’s Bloomberg News there is a story about homebuyers “hunkering down” in today’s economy instead of buying homes. The story used the definition of hunkering down as hiding in fear. The reporter sited instances where buyers even pulled back offers, based upon the turmoil in the stock market and the resulting uncertainty overall with the economy. People are hunkering rather than buying.


I guess the news is bad. NAR reported that July sales fell to the lowest point this year and Karl Case of the Case-Shiller report even was quoted in the Bloomberg article as stating that another recession may happen if the housing segment continues its swoon.

Indications of the malaise included the fact that applications for mortgages to buy homes dropped to a 13-month low in the week ended Aug. 12, even with rates at historic low levels, according to the Mortgage Bankers Association. The article reported that Bloomberg Consumer Comfort Index sank to the lowest since the official recession. In addition the stock market has been down for 4-5 weeks, so many people have seen their down payment nest eggs disappear. Even with low mortgage rates there has also been a huge increase in cancelled deals due to low appraisals according to the story.

The result of all of this gloomy news is a nation hunkered down, doing nothing until this all blows over. However, this is one of those chicken or egg situations. In the past, the economy has always been led out of recessions by the housing industry. Improvements n home buying led to increases in building which led to better employment and on and on. This time no one is buying, so few builders are building and the whole mess is feeding upon itself.

Even attempts by the government to encourage home buying by keeping rates low and promoting program after program to encourage lenders to loosen up have not worked. The encouraging news that foreclosures were down the last couple of months was driven as much as anything by the lenders’ reaction to the various robo-signing investigations into foreclosure irregularities, not by shifts in the fundamentals of the housing market.

So, what’s a Realtor to do in this hunkered down world? In my area at least, there are still sales happening – they are just low-end sales to investors and first time buyers. So I focus upon them. There are few move-up buyers (those in the move-up sweet spot in this market of $200-400K) out looking, but I do get an occasional one or two. They are usually very finicky and are really looking to steal a move-in ready house at “destroyed foreclosure” prices. It’s just the nature of the market.

Many of the buyers in the move-up price range in this area aren’t the classic move-up buyer with a house to sell or who just sold; they are the people who lost their own homes to foreclosure 3-4 years ago and now have repaired their credit enough to start looking top buy a home again. They have to be vetted carefully with a good mortgage person, so that I don’t waste a lot of time with wishful thinkers instead of real buyers. More than once my mortgage person has had to tell them that they still have work to do on their credit before they should be out looking.

I guess that Realtors need to use the other definition of “hunkered down” that I found on-line in the Urban Dictionary – “to get to work, to focus on the job at hand.” We have to hunker down to the basics and work harder at sales that return less in order to get through this mess. If there is any good news to come out of all of this it’s the exit from the real estate business of the marginal, would-be Realtors and part-timers. That has concentrated what little business there is out there to the Realtors who have hunkered down to ride this thing out. So, hunker down fellow Realtors and let’s work our way through this recession. And for all of you would be home buyers, I'd say, "Get out there and do the patriotic thing - buy a house and help America get out of this recession."

Everyboby's talkin about it...

And not one knows what they're talkin about...

We're talkin about the housing bust. Is it over? Have we reached bottom? Is the recovery under way? Are the banks about to loose a tsunami of foreclosed "shadow inventory"? Are short sales the way to go? Are short sales dead? Should you sell now or wait? Should you buy now or wait? What the heck is going on?

The truth is that no one knows. Pundits in various parts of the country look at what they can see in their area and make calls about the market. National pundits make national calls and then back off with local caveats. In our area the local market was up significantly in March and April, but the pundits are saying - watch out, it was all an illusion, caused by people rushing to beat the tax rebate deadline. Michigan is still a depressed market with hoe values that continue to fall...unless of course you happen to be in one of the areas where they have stared to rise again.

It's all quite maddening, sort of like watching a Tim Burton movie. This index is up, but that one is down. Consumers are more confident, but not about housing. Mortgage rates are at historic lows, but you can't get a mortgage. Somebody tell Joseph Heller about this Catch-22 market. Maybe he is in Washington these days, writing new HARP/HAFA/HAHA rules...or maybe it just seems that way.

In any event, should you get stuck with someone at a cocktail party (do they still have those these days...maybe a wine tasting party) who asks if you think the housing market is recovering or still going down...just say YES. Whichever view that person holds has at least a 50% chance to be wrong and you can easy provide proof of the opposite point of view. I don't play that game anymore. My stock answer these days is that "it's too early to tell." if pressed for when we'll know for sure if this was the turning point year in the housing crisis, I reply, "In about 4-5 years."

When your house is underwater…

That was the Detroit Free Press Front Page headline this morning, superimposed over a house sinking into the surf and the shadowy figure of what one presumes is he homeowner walking away. The sub-head was “More homeowners are just walking away.”

On the front page statistics told of the 532, 774 homes in Michigan that have mortgages that are greater than their current values, which was estimated at 38.5% of all mortgages in Michigan right now. The article detailed the growth of so-called “strategic defaults” from 5,100 in 2005 to 17,250 in 2008 (the numbers for 2009 are apparently not in yet).

There was also advice from a Southfield real estate attorney that, “When things are that bad (referring to the huge loss of value and the economic hardships that many in Michigan face), your moral compass and the obligation to make payments that most people feel, has got to give. He opined that, “the stigma of defaulting on a mortgage, even if one can still pay, is disappearing.”

Yet inside the paper the article took a nasty turn and focused upon the ability and the growing tendency for the banks to go after the defaulters for deficiency judgments and collection of the shortfall, if they have to sell the house as a foreclosure. Articles by Greta Guest, a Free Press Business writer and well known columnist Susan Tompor both gave examples of how the lenders could pursue ex-homeowners for years.

Guest wrote about Michigan laws that would allow the lender to turn the deficiency judgment over to collection agencies and have up to 36 years (if it was a 30-year mortgage) to harass the ex-creditor for fulfillment of the original contracted amount, including any back taxes owed on the place at the time that bank took it over. She wrote that mortgage recovery actions were up 26% in 2008 and some 187 since 2006. She sites data from First American Core Logic which shows Nevada to be the worst state for underwater mortgages at 70%, with Arizona second at 51% and Florida third at 48%. Michigan was fourth on that list, followed by California with 35% underwater mortgages.

Topor focused more on how long it might take to recover the value that has been lost in this recession and opined, as I have several times, that it will be decades before we get back to 2006 levels, if ever. Her example was a $200,000 home that the buyer bought in 2006 with a 5% down payment and a mortgage for the rest. In our area that home has dropped in value by 30%, so it is now worth about $140,000. The original mortgage for $190,000 is probably still in the high $180,000’s. Topor uses an appreciation rate of 3% per year once a recovery starts and positive appreciation returns and figures that it will be 2022 before this owner gets back to his original purchase price.

There was comment made in the Guest article on the very slow progress of any of the Federal programs to help in this situation, especially the mortgage modification programs. The banks complained that the whole process is too complicated and that borrowers are reluctant to go through the whole financial disclosure process that get eh modifications. They also sited the state’s high unemployment as a primary factor that they can’t do anything about. One foreclosed ex-homeowner was quoted, “Everything that I’ve worked for for the last 20 years is gone. Now I’m a dirtball. I can’t even go and get a used car.”

In a related story, the Free Press reported on a local Catholic nun who has lived in the same four-plex apartment for 22 years, who is now facing eviction because the landlord is in foreclosure. The foreclosure happened before the current moratorium on evictions went into effect in Michigan. That is going ot be more and more of an issue as more owners of apartment buildings and commercial building get into trouble.

I tried hard to find any positive news in all of these articles, but couldn’t. In the main article by Guest a local Realtor was quoted as saying, “When you’re living in a $200,000 house and can go buy the same house for $70,000 cash, why not just walk away?” He went on to state, “If there has ever been a time that you can let your credit go and it’s acceptable, it is now.” That’s a sad, but probably true, commentary on our times.

One in Four Borrowers Are Underwater

As reported in a Realtor News article from their Source: The Wall Street Journal, Ruth Simon and James R. Hagerty (11/24/2009), more than 23 percent of people with mortgages owe more on their properties than they are worth, according to a report released Tuesday by research firm First American CoreLogic.

Another 2.3 million homeowners are within 5 percent of being underwater, bringing the total of those who are upside down or close to it to about 28 percent.

About 5.3 million U.S. households have mortgages that are at least 20 percent higher than their home's value, the First American report says. Borrowers owing more than 120 percent of their home's value are the most likely to default, First American calculates.

The majority of underwater mortgages are in the following states:

Nevada: 65 percent of homeowners are underwater
Arizona: 48 percent
Florida: 45 percent
Michigan: 37 percent
California: 35 percent

The report also notes that most U.S. homeowners have home equity, and nearly 24 million owner-occupied homes don't have any mortgage at all, according to the U.S. Census Bureau.

I can certainly add my own anecdotal take on these numbers. I do 2-3 CMA’s a week for clients who request market analyses on their homes thru a Web-based service that subscribe to. Over the last 12-18 months almost every request that I received resulted in current market price numbers that are lower than what the public records show is owed on the property. Most of these underwater homeowners bought within the last 5 years, but many are long term owners who took out home equity lines of credit for whatever reason and now find themselves upside down on the debt vs. value of their homes.

It is tough and sometimes sad to have to tell owners that they can’t get out of their homes to move for a job or retirement because it’s now worth so much less than when they bought. For many the value of their home was a big part of their retirement nest egg, an egg now gone bad. For some the home they loved is now a ball and chain preventing them from making that move South for retirement or maybe closer to family. For others it is the thing holding them back from seeking work elsewhere, where jobs may be more plentiful than in Michigan. For many sellers these last 2-3 years that has meant bringing money to the table to sell their homes, so that they could move on. For some that has meant just walking away and losing everything that they had worked so hard to get. It’s not a pretty picture.

One might think that the Federal programs, like the Making Homes Affordable program, would help; however, the lenders have not jumped on board that program and would seem to prefer foreclosure to doing loan modifications and workouts with strapped owners. So. While Wall Street and the big banks give themselves obscene bonuses, Main Street America continues to see hopes and dreams go down the foreclosure drain. It’s got to stop somewhere, sometime and it may take a severe backlash and uprising of the borrowers to spur the changes that are needed.

I’m not necessarily a fan of bigger government, but the big players on Wall Street have proven over and over that they cannot police themselves and that greed always wins over common sense. The pendulum needs to swing back from the almost totally unregulated markets of the Bush years to something that allows for innovation and entrepreneurship without encouraging excess. I’m not sure that either of the political parties that we are stuck with have the intelligence or political will to find that middle ground. We shall see.

Are we there yet? Are we there yet?

Anyone who has traveled with small children is certainly familiar with that impatient refrain - Are we there yet? We are also seeing and hearing it about a recovery from the current recession. There are stories every few days in the papers or on the TV news about hopeful signs of a recovery, ort at least signs that people hope are pointing to the recovery. Those are almost always followed by more reports of increased foreclosures or looming ARM resets or other dreary news that portends a longer down period.

We have certainly seen an up tick in sales of existing homes across the country, as first- time buyer rush to beat the deadline to qualify for the first-time buyer tax credit of up to $8,000. There has also been an increase in the sales of lower end homes, most of them foreclosures or short-sales, as investors and others take advantage of the misfortunes of others. I’ve also noted the increase in sales of owner-occupied homes above $200,000, albeit a small increase. Even that small increase is a welcome sign that things are loosening up a bit. But are these signs enough to say that we are there – that we have reached the bottom of this recession and started back? Not yet.

Prices are still declining across the board, although not at as precarious a rate as has been the case the last two years or so. We’ve seen drops in value in this area of southeastern Michigan between 12 – 18% for two years running. Last year we actually dropped 18,5% in Milford. We seem to be down somewhere between .5 and .75% per month loss in value right now, which would put us at 6-9% for the year. I hope that is the case. That would indicate that we are approaching the bottom of this thing.

One fear I have is of an overshoot on the part of appraisers, as far as devaluation goes. Appraisers have been very conservative and have baked a few months of continued value decline into most appraisals lately (actually for the last year or so). Depending upon when they believe we have bottomed out and turned back to positive appreciation, they may overshoot on the downside with their appraisals and cause us even more problems. Homes that don’t appraise are one of our biggest problems right now, along side dealing with lenders taking too long on short sales and foreclosures. In a pure, free market a home should be worth whatever the buyer agrees to pay for it that the seller is willing to take. In our market it’s more about what the lender is willing to lend on it and that often has lots of risk baggage baked in.

The whole lender issue is a major contributor to the lackluster owner-occupied market. In many areas it is almost impossible to get a non-FHA loan – a conventional loan – and don’t even try to talk to the lenders about jumbo loans (any loan over $417,000 in our area). It’s as if the mortgage industry just put a “Closed” sign in the window for conventional loans. That will have to change in order for us to get out of this mess and we’re not there yet. The other biggie for us in Michigan is the uncertainty in our job market. We are not yet half way through the fall out from the bankruptcies of GM and Chrysler. We are now seeing the ripple affect through our automotive supplier base and that has to trickle down through the next 2 tiers.

I’m of the opinion that the economists who predicted things would bottom out and turn around in 2010 are probably right. Although the turnaround will take place at different times for different parts of the country, by sometime in 2010 we ought to all be headed in the right direction again. Then we’ll see if there is really pent-up demand for housing, like some have forecast. There should be a positive rebound affect sometime in 2011 to 2012 as the people who lost houses during this recession and have had to rent will finally be able to get back into the mortgage market and buy a home again.

For now, the first-time buyer tax credit is helping at least get something moving, as did the "cash for clunkers" program for automobiles. Both were short-term programs however, so they really had little lasting impact; but they did help clear out some inventory. The car companies had to add shifts to rebuild inventory and homebuilders will likely start building new homes again (that’s already happening in some parts of the country). In both cases what is built will need to be smaller, more efficient and cost less to buy and operate. Are we there yet? No, but we’re on our way.

The housing market in the Twilight Zone…

The old TV series by Rod Serling called “The Twilight Zone” used to present a lot of episodes based upon irony. Serling liked to use dramatic techniques, like not showing the faces of the actors or lighting them from behind, so that you couldn’t quite make them out . One episode that I remember involved a group of people who spent the entire ½-hour episode discussing in horror how ugly another person, who was never shown during the bulk of the show, was and how she was so different than them and should be cast out of the society. You could never quite see the speakers or the subject that they were discussing, but the disgust of the “regular” people was apparent. At the end, of course, Serling through us a curve ball when he finally allowed the subject girl to be seen. She was stunningly beautiful (by our standards). The Serling allowed the speakers during the episode to be seen and, of course, they were horribly deformed and ugly.

That Twilight Zone episode is a great match to today’s real estate market. The sometimes ugly and many times horrible neglected and, one might say, deformed (deteriorated at least) foreclosed houses are setting the standards by which buyers are judging the market, at least on price. We are truly in a Twilight Zone in housing right now. Decrepit, run-down foreclose or short sale houses are setting the market price standards and getting lots of traffic and sales, while truly beautiful owner-occupied house are being shunned. It is a market that Serling might have found worthy of an episode or two.

So, what are we to do as Realtors to recapture our market and bring it back into the real world? Can we afford to ignore the foreclosed and short sale segment of the market? No! That would be tantamount to suicide. But what we can do is to better educate our clients (especially the amateur investors) and better counsel them about the risks of buying a foreclosed or short sale house that go along with what they see as the obvious rewards.

There are really very few truly professional investors in the market these days – people who really know what they are doing when they buy a run-down foreclosed house. That’s one reason that there are so many “boomerang houses” in the market – those that were bought by naïve “investors”, only to return to the foreclosure market 3-6 months later. As Realtors, we’re probably not doing enough to prevent that from happening. We should be giving better and stronger advice to amateur investors, when we encounter them. Many times that advice should be “Don’t do it.”

What else? I certainly try to advise sellers on how to do the best that they can to sell before bailing out on a property. But, in reality, the economy has taken so much value out of the market that almost a third of the people that I run into are underwater on their homes – they owe more than the home is now worth. They can get relief by refinancing because the banks just won’t talk to them, even with all of the Federal rescue and refi programs. I sometimes feel like I’m also caught in the Twilight Zone as a Realtor. I’m at a loss here, so feel free to jump in and post your advice.

One in Six Home Owners Are Under Water

From a recent Wall Street Journal report comes this story. According to an analysis by Moody’s Economy.com, about 16 percent of U.S. home owners, or one in six, owe more on their mortgage than their home is worth. About 4 percent were under water in 2006 and 6 percent last year, Economy.com says.

An analysis by Zillow.com estimates that for people who bought their homes in the last five years, the situation is worse: 29 percent owe more than their homes are worth.

The majority of home owners still have equity, and even among those who don't, many continue to make their mortgage payments on time. The financial-bailout legislation could at least "keep things from getting much worse," says Celia Chen, director of housing economics at Economy.com.

Still, she expects mortgage money to remain tight and home prices to decline in much of the country for another year.

Locally I can attest to this trend. Of the last five houses that I’ve sold, four of the sales resulted in the seller having to bring money to the closing table and three of them had to be re-negotiated on price, because the appraisal came in for less than the agreed upon sale price. Prices have dropped so far, so fast that even real estate professionals are having a hard time advising their sellers on how quickly and low far to reduce prices.

Basically in our area the “values” of homes have plunged between 20-30% in the last five years. So if you bought a home for $200,000 in 2004, it is likely worth only $150,000 now. Even it you put 15-20% down on the home, you are likely underwater right now.

The foreclosure problems are many times caused by the ARM second mortgages that many buyers took out back then to get to the 20% level and avoid PMI. Those ARMs are resetting (or have already) and the homeowner who though that he would just refinance it when that happened now finds that he can get that refinance loan, because the house is now worth less than even his first mortgage alone. That leaves the homeowner trapped in a “toxic loan” that he now can’t afford.

What can you do? For now tread water and hope that government programs like Hope for Homeowners or some of the other bail-out programs provide an avenue for relief. Even the Hope for Homeowners program only provides for forgiving 10% of the principle amount of the primary loan and doesn’t deal with secondary loans at all.

Eventually some program is going to have to be invented that allows the homeowner off the hook for the original inflated value of the home and refinances the house at the current deflated values. Those will probably have to be 100% loans, since most distressed homeowners don’t have any money to put into the process. Stay afloat and stay tuned.

When not to bad is good…

Dr. Orawin Velz a top mortgage industry economist sees conditions in the market at the moment: It's all kind of "flat." He was referring to the latest big-picture, "macro" numbers on the U.S. economy that underpin the housing market: The gross domestic product or GDP -- all the goods and services generated in the national economy -- registered a zero point six (0.6) growth rate in the first quarter.

No question that's pretty anemic. But it's better than the negative growth predictions that had been made by many Wall Street analysts. What’s that old joke about how good it’s going to feel when you stop banging your head against the door?In the latest month, manufacturing production was better than just about anybody expected -- factory orders jumped by 1.4 percent in March. No big deal you say? It was the first increase in factory orders we've seen in the last three months, even if it maybe did miss Michigan..

The employment picture was also better than projected. The US economy lost 20,000 jobs in the most recent month, which is not good. But Wall Street had forecast an 80,000 job loss number -- and the stock market took a nice bounce on the news of the smaller loss. Plus, the national unemployment rate dropped to 5 percent from 5.1 percent.

On top of all this, the Federal Reserve did precisely what most analysts expected -- cut the short-term federal funds rate by another quarter of a point. Now that doesn't translate into lower 30-year mortgage rates, but it is very welcome news for millions of people with home equity credit lines and adjustable-rate mortgages heading for payment resets.

The fed funds rate is now at 2 percent, and the prime bank rate is just 5 percent - which is outstanding -- and should eventually have a stimulative effect throughout the economy. Mortgage rates also fell slightly last week. Average thirty year rates inched downward to 6.01 percent, according to the Mortgage Bankers, and 15 year rates averaged 5.5 percent.

All in all, things could be worse. And they could be better. We are all paying horrendous gas and food prices and that psychology diminishes consumers' appetites to buy and sell houses. On the other hand, the underlying US economy is defying the pundits, hanging in there like a boxer who refuses to go down. Home prices and the cost of money are more affordable, and a number of local real estate markets are picking up on that combination -- and improving.

So: the economy may be flat. But, flat looks relatively favorable at the moment. It sure beats the alternatives. In Michigan, and in this area, we are still in decline, but perhaps starting to level out. Activity and sales are up a bit, mostly because the good weather has brought out the buyers. Foreclosures are still high and foreclosed properties still make up almost half of our local sales. But, hey; there's nothing wrong with getting a good deal on a foreclosed property, and many of the previous owners have likely left the state anyway.

The market velocity...

I take a lot of time up front, before I’ve even signed the home seller up to a listing contract to try to set realistic expectations for how long it might take to sell their house. I used quite a few statistics, some of which I generate from studying and accessing the data that is available on the local Multi-List Service (MLS). And some it it generated by my company or by other companies that specialize in real estate.

One helpful set of data and the charts that result from it is supplied to us by my company each quarter. It tracks the sales that have taken place in the last quarter and then looks at the current inventory and projects a time to clear that inventory. I call it the market velocity chart – how fast are things moving. In a crude way, you can forecast, based upon that chart, how long your house may be on the market if you put it on today.

The charts are done by county and are divided into $100K price bands. Within each County the townships and/or cities are shown as separate lines. Since I track mostly townships in the western part of Oakland County, I tend to track Milford, Highland, Commerce, White Lake and West Bloomfield Townships and usually have a feature on these statistics in my monthly newsletter. I keep all of the charts on my Web site – http://www.themilfordteam.com/market_stats.html – if you are interested in seeing them. Just chose your county.

These statistics are trailing indicators, since they are at best a couple of months old (it takes about a month to get the data compiled from the last quarter), but things aren’t moving that fast that they would be out of date. If anything the trends continue a slow decline, so these statistics might be a bit optimistic. What you can pick out of the charts are things like where to go to get the best selection of houses in a particular price band (if you’re a buyer) or which price bands have the most inventory and thus require the greatest level of aggressive pricing (if you’re a seller). They also should help sellers “get real” in their expectations of how long it might take to sell.

There are places (Milford is one) that show up in these charts with inventory in certain price bands in excess of 2 years. At one point the charts showed that Birmingham, Michigan had 5 years worth of houses in the $600K and above range. It’s still quite high there and in Milford the supply in that range is approaching 5 years worth. There are other places where the inventory in a price band may be 100-200 houses, but the velocity in that band and that location is such that they really only have 8-9 months of inventory.

These market statistics are just some of the things that your Realtor considers when he/she is working on pricing your home and on the marketing plan for it. If he/she comes back and tells you that it may take 9-12 months, don’t shot the messenger; they’re just trying to get your head on straight about the market; otherwise, it will drive you nuts. Remember the 3-P's of Real Estate (post of August 14). Two of the three - Patience and Persistence - are required in great quantities in this market. Of course, the third "P" - Price - has a lot to do with it, too.