May, 2012
President of Brokerage Services
Real Estate One – Max Broock
After watching the market numbers over the past 12 months, a solid (positive) pattern has been set that appears to be spreading across the nation. The housing market, for all practical purposes, has shifted from a Buyers Market to a Sellers Market. In the five-countySoutheast Michigan market, 84% of all sales are homes that have been on the market less than 90 days. These homes are well priced and in the best condition, but also only represent 30% of the homes for sale, which means 84% of all buyers are bunched together chasing 30% of the available listings. With a limited supply of desirable homes and increasing buyer demand, good things are starting to happen for sellers, the most important of which is appreciation. (The Northwest Michigan market is about 6-8 months behind SE Michigan so the inventory numbers are not as dramatic, but the same improving patterns are still evident.)
The “average” market statistics hide the true strength of the current market. Overall, the average Months Supply of Inventory (MSI) is 4.1 months (for SE Michigan), but in reality, 84% of the market is operating with a MSI of 1.5 months while the rest of the market (70% of the homes for sale) is operating with a MSI of 18.5 months. The result is a strange world where 70% of all sellers complain about a slow market with few offers while 84% of all buyers complain about a wild market with no saleable homes to purchase. Both are correct! The reality is those 70% of the homes that are in the 18-month MSI ”slow zone” are not really relevant to the market since they are not attracting much market attention.
The chart below outlines the “true” MSI for the majority of the market as well as the hidden MSI for those homes that are not priced in a saleable range.
What does that mean for a buyer? It means over bidding on list prices, sight unseen offers, waiving appraisal contingencies and pricing wars above the asking price. Most importantly, it means make your best, strongest offer the first time since we are approaching 50% of all transactions with multiple offers.
So buyers have two choices: jump in and play by the new rules of a Sellers Market – move fast, be aggressive and patient since you will most likely lose out on a few before you get one, or go after the other 70% of the listings that are sitting quietly and find that diamond in the rough.
For sellers, throw your line in the water. Don’t be crazy about the price. You might be surprised what the market will give you, but be prepared to be honest about the condition and features of your house. Buyers are willing to pay a larger premium for a home that is updated, without deferred maintenance, and with a design consistent with the neighborhood (i.e. points off for a contemporary in a Colonial neighborhood, etc.). It may be worth the time and money for some basic updates before putting your home on the market.
April of 2011 was really the start of our heated up market, but even so we still showed growth over our previous year, which was strong, and buyer demand continues to grow.
Filed under: Clarkston Real Estate, Clarkston Realtor, Michigan Market Updates, Oakland County Economy, Real Estate News | Tags: Home Prices in Michigan on the Rise
APRIL SALES STATISTICS SHOW MEDIAN PRICES UP FOR MOST MLS AREAS
- The median sale price for the entire MLS coverage area rose by 20% as compared to last year.
Filed under: Clarkston Condo for Sale, Clarkston Condos, Clarkston Home for Sale, Clarkston Home Sales, Clarkston Market Report, Clarkston Real Estate, Clarkston Realtor, Michigan Market Updates, Real Estate News
The Wall Street Journal – Friday, April 27, 2012 As of 10:01 AM
Home Buyers are Stunned! A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back…..Read the Article
The Pearson Group has seen “Bidding Wars” with numerous offers on the houses they recently listed.
Recently Sold!
9073 Bavarian Court - “Pending” Robin listed this Clarkston Condo for $79,900 on April 20th. There were 6 showings within the first 4 days. ”This Bidding War” included 3 offers.
View the Flyer 9073 Bavarian Court, Clarkston MI 48348
Just Listed!
7079 Snowapple This Clarkston Colonial was just listed on May 7th for $169,900. There have been 6 showings scheduled already. Based on this activity, the seller’s of this Beautiful Clarkston Home can anticipate the positive outcome caused by another Bidding War
View the flyer 7079 Snowapple, Clarkston, MI 48346
Filed under: Clarkston Market Report, Clarkston Real Estate, Clarkston Realtor, Michigan Market Updates, Real Estate News, Uncategorized
As the market recovers, there will be fewer months where we beat the prior year. Such is the case with March 2012. In terms of new contracts written, numbers continued to show improvement over March of last year. Across all of our markets Closed Sales were down just a bit from last year. This is not a cause for concern (it would be if there were three months of decline). March 2011 was an unusually strong month, so it is not surprising that we did not top it this year. As the percentage of short sales grows, pending sales will outpace actual closings since there is a higher fall-through rate for short sales. The more significant number from this point forward is the average/median sale price, since much of the market gain will be in rising values. If available home inventories remain tight, in ensuing months we may even see a slight decline in the number of homes sold as we simply run out of homes to sell. That trend, however, should not last long because it will cause values to rise thus more homes will be released to the market.
Southeast Michigan as well as both Southwest (Grand Rapids area) and Northwest (Grand Traverse) Michigan, the Months Supply of Inventory (MSI) hit another two-year low. (Southeast Michigan had the largest positive movement.) This is a very good thing because each month with a falling MSI moves us closer to a sustainable appreciation rate. For bank-owned, the MSI fell below 3 months, with non-bank owned at 4.8 months. Most of that fall was a result of an increase in contracts written in March. Available bank-owned inventories fell, but non-bank owned remained about the same.
The rest of the nation appears to be joining us in the market upturn. Brokers across the country are reporting strong buyer demand and a lack of home inventories, similar to where we where in mid 2011. With the rest of the country joining our party, housing is beginning to move from an economic anchor to one of the key pieces fueling the recovery.
For those looking to move, a common question is… should I buy/sell now or wait for the market to improve a bit? The chart below shows the cost of waiting to buy versus buying this year in terms of total cost of ownership. The chart used the anticipated mortgage and appreciation rates over the next few years to project the cost of waiting to buy versus buying this year (2012).
By waiting, buyers face both a higher interest rate as well as a higher purchase price on the home they buy. Each year a buyer waits it will costs them more (blue line), yet reduce their future appreciation gain (green line). For many homeowners, their mortgage gap is too wide to sell; however, that gap is closing every month, so it is more important than ever for sellers to ask their Realtors to track values.
If you’d like more information on the market, like to list your property, or want information on any property from any broker, you may call or email at anytime.
Thank you,
Robin Cutler and Kay Pearson
PearsonGroup@MaxBroock.com
248-860-0366
Market Summary for Southeastern Michigan
Dan Elsea, President of Brokerage Services for Real Estate One
April 25, 2012
The first quarter County Market Reports are further proof of what we are seeing every day: Sales are picking up and inventory is getting scarce. Seven of the eight markets tracked showed sales unit gains over last year. Declining home inventories are moving all areas closer to a Seller’s Market, with many of the lower priced areas already crossing the Seller’s Market barrier (under three months of inventory). The vast majority of areas are sitting in a neutral market. When we examine those neutral markets, we see about one-third of the market in a solid Seller’s Market with multiple bids and two-thirds still sitting at a Buyer’s Market, typically because of price or condition. Even in the upper-end markets, where we still see inventories in excess of 12 months, the one-third/two-thirds pattern still follows and is even more pronounced since overpricing tends to be more prominent in the over $400,000 price ranges.
Wayne County : MSI improved 14%, sales 4% and inventories fell 11%. Excluding Detroit, Wayne MSI for under $75,000 was actually under three months. For the first time in a while, the City of Detroit did not fare as well as the rest of the county in terms of sales activity.
Oakland County : MSI improved 21%, sales 5% and inventories fell 16%. Under $100,000 moved to a Seller’s market with the balance of the county in neutral territory. Oakland County 600k+
Macomb County: MSI improved 50%, sales 16% and inventories fell 40%. Macomb made the most significant improvement over last year and is the first county to move into a Seller’s Market overall.
Livingston County: MSI improved 18%, sales 13% and inventories fell 7%. Under $100,00 moved to a Seller’s Market with 75% of the market at Seller’s or Neutral.
Washtenaw County : MSI improved over 25% for combined condo and single family sales, sales fell 8% and inventories fell 30%. Although sales did not match last year, Washtenaw has been the strongest market in SE Michigan, so quarter-over-quarter gains will be more difficult. Inventories continued to fall, improving the strength of the market, even without an increase in sales.
Grand Traverse Market Area: MSI improved 26%, sales 8% and inventories fell 16%. The NW Michigan markets are about six months behind SE Michigan, but continue to see improvements in sales, and MSI for waterfront and non-waterfront properties at all price points. Under $100,000 has moved to a Seller’s Market.
St. Clair County: MSI improved 43%, sales 48% and inventories fell 14%. Like Macomb, St Clair County jumped over last year, with 92% of the market in neutral territory.
Genesee County: MSI improved 25%, sales 19% and inventories fell 11%. Neutral markets make up 96% of Genesee. Both Genesee and St. Clair are particularly hard hit in terms of economic growth, but great pricing seems to be taking hold and drawing activity to both markets.
We’ll be looking forward to second quarter market reports where the upward trends will possibly grow even stronger. All signs point to a Seller’s Market in the near future.
The latest Case-Shiller Report shows further improvement for both Michigan and Florida. Case-Shiller is still showing most markets are still finding their bottom, in terms of value. From what we are hearing from brokers across the country the value bottom was set late last year. Also most brokers have seen the same shortage of salable inventory, thus rising prices. As stated by Dan Elsea, President of Brokerage services for Real Estate One, Case-Shiller is 4-8 months behind current market momentum.
In Michigan, Comerica’s Economic Index follows a combination of economic factors to project the overall health of the local economy. The index, like home values, has some room to go to get back to pre-recession levels, but it also showing some strong signs of growth.
Have a great weekend.
Filed under: Clarkston Realtor, Michigan Market Updates, Uncategorized | Tags: clarkston MI realtors, Clarkston Real Estate, michigan real, michigan real estate update
A new month reveals that the market continues to improve. Pending sales were up and there continues to be a significant number of sales with multiple offers. It is the best time in the last six years for sellers to test the market: values are up over last year and many sellers will be surprised at how far up the market has moved.
The overall 90-day trend for our leading indicators has been either positive or neutral. Pending home sales are steady, home values are stable, and available inventory is down. In all cases, residential real estate values have improved since the same time last year. As the lower quality homes carrying a discounted value are sold or removed from the market, appraisals values and appreciation rates will begin to rise enough to draw more sellers into the market, increasing the pace of recovery.
The Months Supply of Inventory (the time it takes to sell off the current home inventories) is at its lowest point for bank-owned properties in the past two years (3.1 months) as well as the lowest point for non-bank in 22 months (6.1 months). The market remains divided between the 30% of homes that sell quickly and the 70% that sit on the market for months.
For the typical home in almost any market, if there is not strong market activity and multiple potential offer interest in the first 30 days on the market, the home is not priced correctly to fit its condition and features. Currently, if a home has been on the market for over 90 days without a price adjustment, there is a less than 25% chance it will sell. A home on the market for over 180 days has less than 3% chance of selling without a price adjustment.
In order to push up the pace of appreciation, the older, less saleable inventory needs to be either sold or removed from the market. This less-than-perfect inventory is the key to market recovery. It’s also a great opportunity. With rental rates strong, there has never been a better time to invest in single-family rentals. Annual returns can exceed 10%, leaving room for rehabbing and renting. These historically high returns work for a buyer who fixes up to live in the property or to hold it as an investment. For those who need help with the fix-up costs, a common challenge for many, the FHA 203K program is ideal.
This update is brought to you from our President of Brokerage services, Dan Elsea. Real Estate One is the largest Independent owned real estate company in the state of Michigan. ”The Pearson Group” licensed with Real Estate One since 1988 works with buyers and sellers in Southeastern Michigan and Northeastern Michigan.
Filed under: Clarkston Real Estate, Clarkston Realtor, Michigan Market Updates
No surprise to “The Pearson Group” …. The up tick has been happening for months now in certain price points and locations. Now may be the best time for seller’s who have been waiting for a brighter market to make their move.
Filed under: Absorption Rates, Clarkston Market Report, Clarkston Real Estate, Clarkston Realtor, Michigan Market Updates, Waterford Market Report
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Foreclosure, Deed in Lieu, Bankruptcy , and Short Sales caused many people to rent homes while they repair their credit scores to an acceptable score that will qualify them for a mortgage.
Filed under: Michigan Market Updates
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