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 ‘sell a home’ 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.
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
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.
Multiple Offers: Multiple Points of View
Friday, January 6th, 2012Our local market has a low supply of move-in ready homes, and many serious buyers with pent-up desire to purchase. These conditions are the perfect storm for a seller to receive multiple bids. How well you weather that storm as a buyer’s or seller’s agent depends on how well you communicate and set your clients’ expectations.
Let’s take a look at multiple bids from both the buyer’s and seller’s points of view:
The Seller’s Agent:
Your seller is excited that there are multiple offers on his home. You offer suggestions such as negotiating with the other agents to make the weaker offers stronger, or asking all of the buyers to bring back their ‘highest and best’ offers. But in the end, your role is to communicate the potential risks and rewards involved in accepting any of the offers, and leave the decision to your seller. You may also want to caution the seller that while he sits in the driver’s seat, dragging out the process may alienate his buyers.
The Buyer’s Agent:
This is probably the more emotional end of the deal. Your buyer has fallen in love with a house and has written an offer, only to find that the seller is entertaining multiple bids. Your buyer needs to be patient, have a thick skin and set limits about how high he is prepared to bid based on his budget. Good communication and a solid strategy can help alleviate emotions and keep everyone focused on the goal: getting the house.
Cash Is King:
Buyers that can bring cash into a multiple bidding situation have a serious leg up on the competition. In December, a CBWM agent showed a $445,000 house to his clients on a Saturday, knowing that all offers had to be in by the following Monday. His clients immediately wrote an offer for $458,000 with 40% down. They were dismayed when another buyer won the house by offering less, but paying with cash. A cash offer is often more attractive to the seller because it poses the least amount of risk.
Some strategies to help your buyer make a competitive offer:
- Present your client’s pre-approval letter and make sure it includes a verification of income, credit and assets
- Encourage flexibility about occupancy (many buyers are offering 30 days occupancy)
- Suggest that your buyer put down an earnest money deposit (at least 3%)
- As a last resort, a buyer can appeal to a seller by writing a letter explaining how interested he is in the home.
Time is of the essence:
While time is always of the essence in real estate, it is especially true in today’s market. As real estate professionals, we would be remised if we did not instill the proper sense of urgency in our clients. This sense of urgency is important whether your client is the one making or accepting an offer.
Consider this quote when advising your clients: “The house you saw today that you want to think about tonight and make an offer on tomorrow, was seen by someone yesterday who is writing an offer on it today.”
Kelly M. Sweeney is the Chief Executive Office of Michigan-based Coldwell Banker Weir Manuel.