Some significant trends starting to show up in the data…

I track sales in 9 local real estate markets that surround (or are near)  Milford – Milford (Village and Township), Commerce Township (to include Walled Lake and Wolverine Lake), Highland Township, White Lake Township, West Bloomfield Township and Lyon Township and South Lyon in Oakland County;  plus Green Oak, Brighton (Township and City), and Hartland Township (and Village) in Livingston County. I’ve been tracking these same nine markets for a about three years and five of the nine for several years longer.

Basically I show the sales data every week and report the following statistics – Whether the sale was a distressed sale (a foreclosure or short sale), the listed price, the sold price, the percentage of sold verses listed prices, the SEV for the home as recorded in the Public Record Database at the time of the sale, the SEV multiplier that the sale price represents (SEV is supposed to be ½ of the market value, but these days homes are selling for 2.2 to 2.5 times the SEV, which indicates that the assessors overshot in the down direction), The number of days that the home was on the market (DOM), the Square Footage of the home as reported in the MLS and the listed value per Sq. Ft. and the Sold value per Sq. Ft. For each market I show the Averages for those values and the Median value for the data.

As I looked at the data yesterday when I posted it for last week, several things jumped out at me. One is that this is one of the few times in the last few years that distressed sales as a percentage of all sales has been below 50% for all nine markets. There are still some hovering at  mid- to high-40% levels, but there is also one that has remained at 0% all month, so far (Milford). The days on market (DOM) numbers are down on average across the board, indicating that properties are selling faster. Perhaps the most important is that four of the nine markets have broken back through the $100/Sq Ft Average barrier. To me that’s a significant figure, sort of like the Dow has “barriers” at 12,000 or 14,000.

In housing in this area, when the bottom dropped out of the markets we dropped from sale values in the $124-144/Sq Ft ranges during the peak in the markets that I track down to markets that were averaging $70 - $80/ Sq Ft. Admittedly much of that severe drop was due to the high percentage of foreclosed houses in the sales mix during that period; however, it did impact the market values of all houses on the market.  So we are not back to peak levels and may not get back to that level for a decade or more (if ever); however, we are getting closer to market values that will allow many who have been sitting on the sidelines to consider listing their homes.

Not everyone bought or refinanced and took out equity during the bubble years; however, even those who were financially conservative and may have had a big down payment when they bought found themselves under water when homes values fell as far as they did in the recent recession. I see articles that the housing market is back to the value levels of this year or that and I’d say that we regressed back into the mid 1980’s somewhere, so far as lost value went. A few of our local markets lost 30-40% of their 2006 values and a very few actually lost more than 50%.

Now things are trending back up. If we get back on the historic home appreciation curve of 3-4% per year it will take us a decade to get back. I suspect that the lack of inventory in the market will drive a faster recovery, at least until the market reaches a new supply and demand equilibrium.  The data that I look at each week certainly seems to indicate that.  If you want to see for yourself, go to http://www.movetomilford.com and click on the choice “ What have homes in this area sold for?” There is data there for all nine markets going back three years and for some of the markets going back further. The data that I collected has changed a bit in format over the years, but you should still be able to compare some key metrics.

 

And if you’re ready to see what your home is worth on the market today give me a call. I don’t charge to do a Market Analysis for you and you might just be surprised that you can take your plans off hold and move on with life by selling now and moving to take that new job or moving to that retirement home or that place closer to the kids. Maybe it’s time to look at that move-up house that you’ve been dreaming about but felt that you couldn’t afford. You just won’t know until you see where you are on your current place.

Getting prepared...studying the numbers...

How many times have I heard, “My house is worth what?”, when I delivered the bad news about the current value of someone’s home? Some of these were homes that I helped the owners buy back in the early 2000’s. Even with all of the press and TV news coverage locally, many people just cannot deal with the 30-40% loss in what they thought was the value of their homes or at least what it was when they bought.

I’m doing some research this weekend, in preparation for publishing yet another post on the impact of the recession locally and to use in listing meetings I’ve decided to look at three typical sub-markets within the market that makes up the little Village where I live. I will take a look at some typical starter homes, some typical mid-market move-up homes and then some of our luxury homes. I’m fortunate to have 3-4 examples of fairly homogeneous starter home neighborhoods, 2-3 mid-market developments and a couple of luxury neighborhoods. I might also look at the historic home segment, since they make up the core of the Village housing stock.

What I want to analyze are a few different cuts at these markets. I want to use sold data to find the averages and medians for each market among homes that have sold over the last year or two. Then I want to strip out the homes in that sold group that were bank owned or short sales and see what the numbers are for non-distressed homes. I know that the distressed sales had an impact, but when you take their artificially low sold prices out of the CMA numbers one should get a better idea of what a typical, non-distressed seller might expect.

Next I want to look at these neighborhoods fro the taxman’s perspective – the assessed values – and see how they have declined in value for tax purposes and how close that matches the market decline. A cursory view of that gap in the past has indicated that the assessors are lagging far behind the downward market price drift, maybe as much as 1/3 to ½ of the decline behind. The local assessors made big cuts last year, but assessed values are still well above market values. I hope to determine by how much.

Why go to all of that trouble? Well, we are looked at by the general public as being the experts on all things about real estate with current home value perhaps being one of the biggest areas of expected expertise. I think it is important to have data about the local market available, not just a few comps; and to know what that data indicates about value trends in that market.

If I’m going to look a potential seller in the eye and tell him that the house that he bought in 2006 for $400,000 is worth $275,000 on today’s market, I’d better have proof. Further, if I’m going to ask for a 1 year listing because the average DOM for that price band in running 12-15 months, I better be able to back that up. At least that’s the way that I feel about it. The data is all there in the databases that are run by the local MLS’s. It’s really a matter of taking the time to find it and analyze it. I’ll let you know how my little study comes out.