By Donna Levos, Coldwell Banker Weir Manuel
Our clients often ask us: Are we in a buyers’ or sellers’ market? Sometimes it is clearly one or the other. But other markets are harder to call. Ultimately, inventory (or lack thereof) plays a large role in determining whether the market favors buyers or sellers.
Understanding the inventory:
Inventory is the supply of residential homes and condominiums for sale on the market.
For the current 12 month period, there were 26,317 homes for sale in our local markets (Metro Detroit) as opposed to 32,317 listed the previous 12 months. So inventory is down about 19%.
Other factors consider:
Sales figures also impact the market landscape. The total number of sales for the current 12 months (both bank-owned and traditional) is up 2,879 units from the previous 12 months, or roughly 5%.
Of these sales, traditional home sales are up 18%.
So what does this mean to our clients? At first glance, one might think that these figures favor sellers.
But consider that currently there is a 4.9 month’s supply of homes on the market. This is a normal, balanced market which is good for both sellers and buyers. Of this supply, approximately __% is bank-owned properties.
Taking it a step further, if we look specifically at bank-owned properties, we have a 3.9 month supply.
In such times, it is best to remind sellers to price their homes at or slightly above market value.
Whom does the market favor?
The Southeastern Michigan housing market has stabilized, and both buyers and sellers can claim the market as their own.
For more city-specific information, you can provide your clients with an inventory report found in a link featured in every RE Weekly.
After all, It is up to us to educate the consumer that what is happening nationally (not necessarily what’s being reported in the national media) is not what they will experience in our market. All real estate is local.
One final thought: these numbers may eventually be influenced by the release of the much-discussed “shadow inventory” of REO homes, that may or may not be released within the year. Shadow inventory is the term used to describe the “Pending Supply” of distressed properties not currently listed on multiple listing services (MLSs) that are seriously delinquent, in foreclosure, or those that are bank-owned.
Archive for the ‘housing’ Category
Whose Market Is It Anyway? Checking the Inventory.
Thursday, April 26th, 2012Show & Tell: Tips for showing a home where kids live
Wednesday, March 21st, 2012Show & Tell: Tips for showing a home where kids live
By Donna Levos, Coldwell Banker Weir Manuel
Showing a home can create stress for any client, but even more so for those with small children. Sellers with kids do the best they can to keep up with the spilled Cheerios, scattered toys and sticky handprints. Help them out by sharing these tips for before and after you list the home:
De-Clutter and Donate:
The most important thing to do before listing a home is de-clutter. This is especially true for those with children whose toys and baby gear have taken over the house. Suggest that your clients remove excess toys and out-of-season clothing from kids’ closets and bedrooms. Store or donate these items. This will help maximize bedroom space and get a jump start on packing.
Bunk Up:
Suggest that children temporarily share a bathroom and/or bedroom to save time on tidying up and cleaning before a showing. If the home is large and has several bathrooms, it may make sense to have an “off limits” bathroom that won’t need to be cleaned in advance.
Once the showings begin, here are a few thoughts to help things go smoothly:
Making a Getaway:
For a busy family with children, it may be reasonable to have a 24 hour notice policy on showings. However, suggest that the family have a bag packed with small toys, books and snacks to make a quick getaway if there are any last minute showings.
I Can Help!
Kids are actually a great help when they want to be. Perhaps suggest that your sellers assign pre-showing “chores” to their children such as vacuuming, picking up clutter or emptying wastebaskets.
Secret Stash:
Another great trick is to have laundry baskets throughout the house that are meant to gather loose items quickly. These baskets can be quickly stashed inside of the washing machine, dryer or car. Unlike closets, potential buyers are unlikely to look inside these places.
Above all else, remind your sellers that in general, people understand the fact that children live in the home. Chances are other families with small kids are looking at the home as well. But it is still very important to present a clean and well-maintained home. So using fewer rooms, stashing clutter and having a plan for quick getaways will make showings easier to manage. After all, this next showing might be the one that seals the deal!
Michigan population stabilizes
Thursday, March 1st, 2012Michigan population stabilizes
By Donna Levos, Coldwell Banker Weir Manuel
For the first time in six years, Michigan’s outbound and inbound populations have equalized. A recent study by Atlas Van lines, one of the nation’s largest moving companies, reported its findings about 2011 migration patterns:
“Our annual migration patterns study is an interesting gauge of the economy, where economic development is taking place and trends to follow throughout the upcoming year,” said Jack Griffin, president and COO of Atlas World Group, which reviews moving patterns annually. “These new findings are especially promising, as we saw the number of moves increase yet again across North America.”
The study went on to say:
“The Midwest region only has three balanced states – Iowa, South Dakota and Michigan. Despite uncertain economic conditions, Michigan became a balanced state following a six-year streak as an outbound state.”
This migration trend should provide continued stimulus to the local housing market. As a matter of fact, in 2011, our own CBWM relocation services department recently saw a 25% increase in customers who were relocating to Michigan.
Several companies including Carhartt, Sherwin Williams, Lear and Johnson Controls have been actively hiring. This has created buying demand in our local housing market, especially in Oakland, Washtenaw, North Livingston, Wayne and Macomb counties.
These trends signal recovery of our local job and housing markets and confirm that Michigan is among the states that are leading the nation out of the recession.
Last year for HAFA program
Thursday, March 1st, 2012Last Year for HAFA Program
By Donna Levos, Coldwell Banker Weir Manuel
First introduced in 2010, the HAFA program is set to expire at the end of this year. As you know, it a government program to help homeowners avoid foreclosure. This is accomplished by allowing the homeowner to sell the home either by short sale or deed in lieu.
From the Home Affordable Modification Program website:
“The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to avoid costly foreclosures and offers incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures. HAFA alternatives are available to all HAMP-eligible borrowers who: 1) do not qualify for a Trial Period Plan; 2) do not successfully complete a Trial Period Plan; 3) miss at least two consecutive payment during a HAMP modification; or, 4) request a short sale or DIL.
In a short sale, the servicer allows the borrower to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. Generally, if the borrower makes a good faith effort to sell the property but is not successful, a servicer may consider a DIL. With a DIL, the borrower voluntarily transfers ownership of the property to the servicer – provided the title is free and clear of mortgages, liens and encumbrances. With either the HAFA short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower. “
Basically, HAFA simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation. But time is running out. If your clients would like to explore eligibility for HAFA, please contact Nick Wuest at Bankers Home Loan: 248-816-7145.
Condo Certification Forms: Avoid Surprises
Tuesday, February 7th, 2012By Donna Levos, Coldwell Banker Weir Manuel
Many condominium purchase agreements are now subject to a Homeowner’s Association Certification (HOA) being presented within seven days for the buyer’s review. Both conventional and FHA loans are being affected by this condition. By making sure your seller/buyer has a current condo certification form from the start, you can prevent unpleasant surprises that can come up after the appraisal and just prior to close.
Several factors can affect your buyer’s loan approval when purchasing a condo:
- One entity owning more than 10% of units within the project
- Over 15% in delinquent assessments of total units
- HOA litigation
- Commercial space greater than 20% within the projects
- Insufficient reserves (must be 10% of annual budget)
- Lender liable for 6+ month HOA dues
If any of these factors exist, the transaction will have to be a cash purchase unless the lender is able to have an underwriting exception approved.
Another thing to keep in mind is that if buyers intend to pay cash for the unit and then later flip or re-sell it, they will still want to make sure to get the certification to ensure that it can be re-sold.
Ideally, an HOA Certification should be ordered prior to the property inspection. Contact the association or property manager for instructions on how to order it. Many times you will find that associations have contracted a third party such as Condocerts.com. The cost to get the certification is about $65. Other documents including Master Deed and Bylaws may also be available at additional costs.
If your seller wants to be proactive and if you want to be sure your listing is marketable with mortgage financing it is a good idea to follow the same process.
The following are the three types of certification forms:
- 921 HOA Certification
- High Balance Conforming Certification
- 2 – 4 Unit HOA
Most of the time, you will just need the 921 form. Once it is obtained, it is good for 90 days.
If you are confused or want advice on which form would be the most effective for your transaction, contact the lender. If you have questions about the condo certification process, contact Lisa Pevac at Bankers Home Loan at 248-283-8461.
Pulse System Streamlines Buying and Selling Experience
Thursday, January 19th, 2012By Donna Levos Coldwell Banker Weir Manuel
This past year, Coldwell Banker Weir Manuel recognized an opportunity to upgrade our customer service experience by implementing Pulse, an exciting technology tool that tracks real estate transactions, one milestone at a time.
As many of you who have already used Pulse know, it is the first system to fully engage both agents and clients via an online account that provides up-to-the-minute information on our listings, 24 hours a day.
Your sellers can view marketing information on the home, see agent activity such as scheduled showings, and have access to real time MLS data about competitive homes for sale in that market. Pulse is also helping these clients keep track of documents, offers and price adjustments.
A new feature recently added to Pulse allows your buyers to view active listings, or to request a showing. Buyers can also log into their account at any time to side-by-side comparison shop the homes you’ve showed them.
Our CEO, Kelly Sweeney recently explained why we adopted this particular system: “Pulse is the best transaction management system I’ve seen because it is so much more than what the industry has always considered transaction management. We use Pulse to enforce internal business rules, to improve affiliate business compliance, eliminate duplicate data entry, and to consolidate data from many systems that previously did not work together. In the end it enables customer reporting that our agents use to redefine the consumer experience.”
Finally, while Coldwell Banker Weir Manuel is the largest of twenty-five brokerages nationwide who currently utilize Pulse, we are the only brokerage in Michigan currently offering this service to our agents and customers.
For more information on using the Pulse system visit www.pulserealtysoftware.com
Kelly M. Sweeney is the Chief Executive Office of Michigan-based Coldwell Banker Weir Manuel.