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 ‘real estate market’ Category
Whose Market Is It Anyway? Checking the Inventory.
Thursday, April 26th, 2012Michigan 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.
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
Legislature Considers Modifications to Principal Residence Exemption
Friday, January 6th, 2012by Kelly Sweeney, CEO, Coldwell Banker Weir Manuel
Due to the number of bank owned and other non-homestead properties being sold today, the May 1 deadline for filing for the Principal Residence Exemption (PRE) has become problematic. Many would be purchasers cannot qualify for a mortgage loan without the significant property tax reduction available under the PRE.
Currently, a purchaser must file for the PRE before May 1 to receive the tax reduction on the following July and December property tax bills. Purchasers closing a sale after May 1 must wait for an entire year to file and will pay much higher property taxes during their first year of ownership. Mortgage lenders must use this high property tax amount when calculating loan qualification ratios. The home lending industry reports that the May 1 filing deadline is preventing many first-time and repeat buyers from getting mortgage loans and, therefore, completing home purchases.
The Michigan Association of Realtors is supporting legislation which will eliminate the May 1 deadline and allow purchasers to file at anytime throughout the year. The legislation is known as House Bill 4446 and Senate Bill 349. Senate Bill 349 has passed the Senate Finance Committee and is on the Senate floor for consideration.
Although this legislation is being opposed by many local governments due to purported administrative problems, the economic benefit to our economy has been recognized by the state legislature and adoption is likely.
Homeownership and your retirement
Friday, January 6th, 2012By Donna Levos Coldwell Banker Weir Manuel
Recently our CEO Kelly Sweeney shared a quote in his sales meeting address about renting vs. buying:
“If you buy a home, you get to make mortgage payments for 30 years and then you get your money back through the asset you own. If you pay rent for thirty years you get to keep paying rent for the rest of your life!”
Have your clients considered homeownership as part of their retirement strategies?
Regardless of age, our clients should be thinking about retirement. Do they want to able to retire when and how they want? If so, they should consider the following factors:
Homeowners dodge rent inflation
Let’s talk about inflation. If rents increase annually at the typical 3.2%, a $1,500 rent payment will cost a renter $900,000 over 30 years. A homeowner paying that same amount in a fixed-rate mortgage payment would pay $540,000 and would be finite with the final mortgage payment.
Homeowners build equity over time
A renter will build no equity by writing that rent check for years. In contrast, a $300,000 home appreciating at a conservative 1% growth rate over 30 years will gain a $100,000 nest egg for the homeowner.
Homeowners get tax help
Consider the tax benefits involved in homeownership. By writing off your mortgage interest and property tax deductions, you are taking advantage of additional opportunities to save money.
Homeownership as a legacy
Finally, there are some things you can’t put a price tag on. For some people, the satisfaction of leaving their home to their loved ones is priceless. Additionally, unlike their renting counterparts, homeowners are able to customize, decorate and make improvements to their homes.
Just remember: long–term home ownership can provide retirement security through the growth of equity.
Kelly M. Sweeney is the Chief Executive Office of Michigan-based Coldwell Banker Weir Manuel.