Fourth Quarter Market Update for Southeast Michigan

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It’s time for another market update. To help illustrate what’s been going on, I’d like to go over a few statistics from Realcomp—the largest multiple listing service in Michigan.

First of all, prices are up year over year by 3.4% from $159,500 to $165,000. Also, inventory levels are down by 26%. This has caused sales to decrease by about 2%.

Days on market are also down, decreasing by nine days since last year.

One interesting factor I found is that distressed sales currently make up 4.1% of the market. This a much healthier percentage than we saw during the recession, when that number was between 40% and 45%.

Finally, let’s take a look at the average showings for listings per month by county.

In Macomb County, the average number of showings per month is 5.2. The average in Oakland is 4.8. The third highest number of showings per month is in Wayne County, where the average is 4.2. 

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A decrease in inventory has caused a decrease in sales year over year.

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Next, Washtenaw County is seeing an average of 3.9 showings per listing, Livingston County is seeing 3.3 showings, Genesee County has an average of 3.0 showings, and St. Clair County has an average of 2.7. Finally, Lapeer County and Monroe County have averages of 2.6 and 2.5 showings, respectively.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

One Last Call for Free Pie

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We just wanted to send out a quick, final reminder about our upcoming pie giveaway for our raving fans. If you haven’t RSVP’d yet, please give us a call at (734) 315-0555 and let us know whether you’d like a free apple or pumpkin pie this year. 

We’ll have everything ready for you to pick up on November 21 at Laurel Manor from 4 p.m. to 7 p.m. The address is 39000 Schoolcraft Road, Livonia, MI.

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Let us know by November 14 if you want one.

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If you have any questions for us in the meantime, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon and we hope to see you on the 21st!

Our Annual Pie Giveaway Is Coming Soon

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Thanksgiving is coming up soon. Do you know what that means? Our annual client appreciation pie party giveaway is coming up soon as well.

On Tuesday, November 21st (two days before Thanksgiving), we’ll have pies ready to go for all of you who have supported and continue to support our business. This is just one way we want to say thanks and give back.

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Join us on November 21st from 4 p.m. to 7 p.m.

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Come out to Laurel Manor (39000 Schookraft Rd) in Livonia from 4 p.m. to 7 p.m. on Tuesday, November 21st to get your pie. To reserve your pie, just give us a call at (734) 315-0555 by November 14th and we’ll get you on the list.

If you have any questions in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon and I can’t wait to see you on November 21st!

Should You Rent a Home or Own a Home?

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Renting might work better for some people but from a financial standpoint, it’s definitely better to own than to rent.

According to the National Association of Realtors, a homeowner’s net worth is 45 times greater than a renter’s.

Another reason to consider buying instead of renting is that home values are on the rise. According to CoreLogic, home prices are up 7.2% over the last year here in Michigan. Going forward, home prices are predicted to increase by 6.4% over the next year. The national average is 5.2%, so Michigan is outperforming the national numbers.

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Home prices will only continue to go up, increasing homeowners’ net worth.

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According to ATTOM Data Solutions, homeowners who sold in the second quarter realized an average price gain of $51,000 since buying their home. That is the highest average price gain for home sellers since the second quarter of 2007, when it was $57,000.

In other words, homeowners in the second quarter of 2017 got an average return of 26% on the previous purchase price of the home. That is the highest average return on investment for home sellers since the third quarter of 2007, when it was 27%.

ATTOM’s report also shows that homeowners who sold in the second quarter had owned the home for an average of 8.05 years.

So, as a homeowner, your net worth is higher and, when you move, you have the opportunity to get a good return on your investment. You can’t get that when you rent a home.

If you have any other questions about owning versus renting or if you’re interested in making a move, just give me a call or send me an email. I would be happy to help you!

What’s Driving Home Prices in Southeastern Michigan?

Low inventory and high demand have led to a 7.7% appreciation in home values in our region.

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What’s happening with home prices right now in Southeastern Michigan? Let’s look at some national statistics and see how home prices are changing.  

First, our national average for days on market is 28 days. I’ve never seen a number that low in my 24-year career, and we’re certainly seeing a trickle-down effect in our market—some of our listings are selling in less than a week or even a day or two.

According to the latest report from Freddie Mac, the number of homes sales increased from 632,000 in June 2016 to 656,000 this past June. In our Midwestern region, the number of pending home sales decreased year over year by 3.4%. The main reason for this is the low inventory levels we have.

Our low level of inventory has lead to an appreciation in home values.

Low inventory leads to an appreciation in home values, and many listings are getting multiple offers because there are more buyers out looking for homes than there are homes available. Another factor driving appreciation is the fact that distressed properties have dwindled down to 4% of the market, which is great. Between 2008 and 2012, 35% to 40% of the market was either a short sale or foreclosure, but 4% is a much healthier number.  

In the Midwest, all of these factors have led to a 7.7% appreciation in home values.

If you have any questions about these figures and what they mean for our market or you’re interested in having an equity evaluation done on your home, feel free to give us a call or shoot us an email. We’d be happy to help.

Consumer Confidence Is Soaring in the Real Estate Market

Today I wanted to give you a bit of an update on how consumer confidence has grown within the real estate market.

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Today we’re going to be talking about consumer confidence in terms of the real estate market.

According to a recent Gallup poll, 34% of those polled believe that the best long-term investment choice is real estate—ahead of stocks and mutual funds at 26%.

85% of Americans now believe that purchasing a home is a good financial decision. That’s a great number to see, as it’s the highest percentage since 2007, before the Great Recession. According to Sean Becketti, Freddie Mac's chief economist, “A decade after the Great Recession, the housing market is rebounding.”

Lawrence Yun, the NAR Chief Economist, had this to say about the current real estate market: “Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.” 

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If you’re thinking about putting your home on the market, now is the time to do so.

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So, if you’re thinking about putting your home on the market, now is the time to do so. Give us a call if you would like to list your home, as the majority of our listings are selling in less than 30 days and in many cases, for higher than list price if we price them correctly.

If you have any additional questions about this topic or you want to list your home for sale, give us a call. We’d be happy to help!

An Easier Way to Search for Homes

Our home search website is one of the best out there. Here are the advantages of using it.

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If you’re in the market to buy a home, our website offers a unique home search feature that we think you should be aware of.

There’s a widget located on the right side of this page. It’s a quick portal to our home search website, located right underneath the market snapshot.

All you need to do is type in the area you’re looking in, the number of bedrooms and bathrooms you want, add your price range, and click “search.”

The widget will lead you directly to our live feed of listings, which are pulled directly from the MLS constantly. If there is a property that you want to take a better look at, simply click the address and you will find photos, specs, and other information about the home.

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The widget will lead you directly to a live feed of listings.

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This is a really useful tool that many of our clients have used successfully in the past. If you’re searching for a home, we hope it helps you too.

If you have any questions for us at all, don’t hesitate to reach out. I look forward to hearing from you soon.

The Winner of Our Zillow Review Contest Is…

The winners of our Zillow review contest have been announced. Find out who the lucky winners are below.

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We are excited to finally announce the winner of our Zillow review contest. First, we wanted to thank everyone who entered the contest by writing about your experiences working with our team online. Your support means the world to us, and we truly appreciate each and every one of you.

However, there can be only one winner. Those winners are…Kim and Chris Callison! 

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Congratulations to Kim and Chris Callison!

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Congratulations to Kim and Chris! We enjoyed working with you on selling your home and buying a new one, and we are happy to present you with the grand prize.

If you have any questions for us in the meantime or you or someone you know is looking to buy or sell a home, give us a call or send us an email. We look forward to hearing from you soon.

Our Client Appreciation Dinner Was a Huge Success

We value our clients as much as we value our business. Without them, the business wouldn’t exist.

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We would be nothing without our clients and all the other people who support us. It’s because of you that we have been able to grow a successful business. We take pride in our customer service, and we’re always looking for ways to give back to all of our clients.

Our third annual client appreciation dinner was a huge success. The night was full of food, fun, and great conversation. We gave some awesome prizes and were touched by the kind words that many people had for us (which are in the video above).

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There’s nothing more rewarding than giving back to you.

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There’s nothing more rewarding than being able to give back to those who have been so thoughtful and generous toward us. It’s only fair. We look forward to continuing to serve you at the highest level in the future. If you weren’t able to make the dinner, we would love to see you at our next event. To see what you missed out on, just watch the video above.

In the meantime, if you have any questions for us or you or someone you know is thinking about buying or selling a home, give us a call or send us an email. We would love to hear from you.

Why All Types of Homes Aren’t Selling Quickly

By now everyone has heard that the market is strong and homes are selling quickly, but is that true for all price points?

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We know that the real estate market is doing well and homes are selling quickly. However, are homes selling quickly at every price point?

In the chart above, put together by Trulia, starter homes, trade-up homes, and premium homes are shown and separated by the percentage of buyers searching for each type and the percentage of homes listed of each type. If you subtract the homes listed from buyers searching, we can see if there are enough homes available to meet the demand for each type.

For starter homes, we have a -5.7, which means there is not enough inventory and prices will go up. For trade-up homes, we have a -5.3, which also means there is not enough inventory and prices will go up. Both starter and trade-up homes are below demand. 

However, for premium homes, we have a +11, which means the supply is greater than the demand. The upper end of our market is just not seeing the type of demand that the other two price points are. This doesn’t mean premium homes won't sell, it just means we have to price strategically and communicate on a weekly basis regarding foot traffic versus days on market.

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The demand for lower priced to moderately priced homes is much greater than the demand for higher priced homes.

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The next graph in the video above, provided by CoreLogic, shows the price appreciation by price category for last year. It shows very similar data compared to the Trulia report. We see that the demand in the lower priced to moderately priced homes, or starter to trade-up homes, is much greater than the higher priced or premium homes.

Sellers at the upper end of our market need to realize that their properties will sell, but they won’t move as quickly as the more affordable homes. For example, if your home is priced at $500,000 and there is more than six months of inventory in that price range, you won’t see value appreciate because your home would be in a balanced market.

If you have any questions about this topic or you are looking to buy or sell a home, please don’t hesitate to give me a call or send me an email. I look forward to hearing from you.

Arati Shares Her Opinion About Kime Realty

Arati- "It was really good. My agent was really helpful and showed us houses around. I would refer them, definitely!"

Are Foreclosures Making a Comeback?

Foreclosures were a dime a dozen after the market crash in 2007. It’s a completely different story today.

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A few years back, foreclosures were a popular option for homebuyers, simply because there were so many of them. Although this was the case back in 2007 and 2010, it’s not the same story today.

Here, you can see a chart from CoreLogic that shows the total number of foreclosures between 2007 and 2016 broken down nationally and by state. The chart shows the number of foreclosures in thousands, so we actually saw 7.8 million total foreclosures during this time period.

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We will stay on top of the data in case anything changes.

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With interest rates about to rise, should there be worry of foreclosures coming back in a big way? The answer is no. Although foreclosures skyrocketed between 2007 and 2010, they have been falling steadily since. There are more loan modifications being done, and the types of mortgages being secured by buyers today are much more stable and secure than the adjustable-prime rate mortgages we saw just before the market crash.

We will stay on top of the data, as always, but we don’t think foreclosures will be quite so important in the market as they were a few years back. It shouldn’t be of much concern to you.

According to the Chief Economist of CoreLogic, Dr. Frank Nothaft, we can’t ignore the connection between jobs and homeownership. A healthy economy is driven by jobs coupled with consumer confidence that usually leads to homeownership. In our opinion, the economy is much different than it was in 2008. It’s an economy that is conducive to more homeownership, not less.

If you have any questions, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.

How Will Rising Interest Rates Affect Our Housing Market?

Although interest rates are rising, there is no evidence that housing prices will slow down in the near future.

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Selling in Southeast Michigan? Get a free Home Price Evaluation

As you might be aware by now, mortgage rates are increasing in 2017 compared to 2016. Many of our clients have been asking us how these increases will affect the real estate market, so today I’m going to answer that question for you.

Most experts forecast prices to appreciate in the 4.5% to 5% range throughout this year. However, this increase isn’t expected to slow the housing market down. Here’s what FHFA Deputy Chief Economist Andrew Leventis has to say about it:

“Although interest rates rose sharply during the fourth quarter, our data shows no signs of a home price slowdown. Although it will certainly take more time for the full effects for the elevated interest rates to be felt, there is no evidence of a normalization in the unusually low inventories of homes available for sale, which has been the primary force behind the extraordinary price gains.”

In other words, there is no evidence that rising interest rates are slowing down pricing. What’s currently determining pricing is supply and demand.

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Rising interest rates aren’t expected to slow our housing market down.

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Fannie Mae, the National Association of Realtors, and the Mortgage Bankers Association all project another 0.5% increase in mortgage rates from now until the first quarter of 2018, which would put the average at 4.63%. From a historical perspective, those are still incredibly attractive mortgage rates.

According to a recent survey by Pulsenomics in which they asked experts what level they thought the 30-year fixed rate mortgage rate would have to rise to slow home value appreciation, most of them answered 5% and above. We probably won’t hit that mark until the fourth quarter of 2018.

In the meantime, prices and interest rates will both continue to rise. Whether you’re a buyer or a seller looking to move up to a bigger home, I would suggest taking action now. 

If you have any questions or you’re thinking about making a move in our market, please give us a call or shoot us an email. We’d be glad to help you.

Get a Free Market Report With Our Market Snapshot Tool

If you need a thorough local market report, our Market Snapshot tool can provide you one in no time at all. Here’s how.

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Today I want to tell you about a great online tool we offer all our clients called the Market Snapshot. You can check out the Market Snapshot tool here. Using it is easy, and it provides you with a quick and comprehensive report of your local market conditions.

To use it, all you have to do is fill in some of your information (phone number, email address, etc.) and declare whether you’re a buyer or seller. Most of our clients who are looking to sell their homes use this to get a sense of what’s selling in their current neighborhood. If that’s the case for you, your next step will be to fill in your home’s details and then click the ‘get free report’ button.

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This tool gives you a great sense of what’s happening in your area.

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You’ll then receive an email notification shortly afterward. This email provides you the link to your report. In that report, you can see the average asking price in your neighborhood, the average list-to-sale price, the average days on market, and the level of inventory. Below those statistics, you can browse other comparable properties that have sold in your area.

Another cool feature this report has is an overhead, satellite-image map that lets you see the locations of new listings, current inventory, sold properties, properties under contract, and expired listings. For your convenience, each category is color-coded. The map also lets you zoom in and out, and you can click on any of the colored properties for more details.

If you have any questions or are interested in getting a local market report and need assistance utilizing this tool, feel free to give me a shout. I’d be happy to help!

Where Are Home Prices Headed in the Next 5 Years?

We can look to the Home Price Expectation Survey to get an idea of where expert economists project home values to go in the next five years both locally and nationally.

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Where are home prices headed in the southeastern Michigan market? We can find out by taking a look at the latest Home Price Expectation Survey in which expert economists were asked what will happen with prices over the next five years.

Before the bubble burst between 1987 and 1999, the national annual appreciation was 3.6% and during the bubble, that nearly doubled. During the bust, prices fell 5.4% annually. During the recent recovery from 2012 to 2016, it has been about 5%. This all basically just means that the market has recovered. Home prices in most parts of the country have reached that 2008 number or will soon reach it. 

What does this all mean?

The experts predict that we'll be below 5% appreciation this year, which would be higher than the historical 3.6% but below the appreciation in recent years. Over the next few years, appreciation will slow as the market swings the other way. Real estate values will experience lower than 3.6% appreciation according to the experts. In the video above, you can see the projection that the acceleration of appreciation will slow. The good news is that no one projects prices to fall.

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It's safe to say that now is a great time to buy a home.

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In the video, you can also see cumulative house appreciation projections through 2021. By then, they project all prices to increase.

Now let's look at what happens with the equity of an example house based on appreciation. In this example, we can see that someone who bought a house in January of 2017 would see a gain of $42,898 in appreciation by January of 2022 if the projections hold true. I think it's safe to say that now is a great time to buy a home. Core Logic also projected year-over-year appreciation broken down by state, and Michigan (5.7%) is projected to outperform the national projection (4.7%).

With home prices going up, homeowners are gaining equity. Keep in mind that if you've been thinking about making a move, you probably have positive equity because of this. If you're interested in an equity evaluation on your home or you have any questions about buying or selling a home, just give us a call or send us an email. We'd be glad to help!

How Do Current Inventory Levels Affect Home Sellers?

Housing inventory levels are at historic lows in our market, which creates a unique opportunity for home sellers this year.

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Selling in Southeast Michigan? Get a free Home Price Evaluation

Housing inventory levels have continued to drop over the past 12 months. In fact, we have historically low inventory levels right now.

Five to seven months of inventory is considered a neutral or balanced market. For the past 60 days, we have had less than four months of inventory available on the market. 

If you compare the fourth quarter of 2016 to the fourth quarter of 2015, inventory is down across the board. We need as many home sellers as possible to enter the market now. Most homeowners want to wait another 60 to 90 days to put their homes on the market. However, if you want to wait until spring, you need to realize that your competition is waiting to do the same thing.

Every year, the second quarter gets the most listings on the market. If you wait until April, May, or June to list your house, then you will be on the market at the same time as everyone else.

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You should put your home on the market before the second quarter.

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Right now, homes are selling in an average of 55 days. The average for our team is 45 days. You can definitely sell your house now before the rest of the competition enters the market.

Even Jonathan Smoke, the chief economist at Realtor.com, says, “In most markets, most years, the optimal time to list is in the spring so that the maximum number of potential buyers view the home. This year, the conventional wisdom of buying and selling may need to change. Inventory levels at the beginning of 2017 are at multi-year lows. Sellers now face very little competition.”

If a chief economist says that you don’t want to wait until the second quarter, then you know that you should get your house on the market as quickly as possible.

If you have any other questions about housing inventory or if you are interested in selling your home, give us a call or send us an email. We would be happy to help you!

How Much Do You Really Need for a Down Payment?

How much do you really need to put down to buy a house? The majority of people falsely think you need a lot more than you really do.

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How much money do you need for a down payment when buying a home?

A recent article in the USA Today reported that 69% of consumers are afraid of not having enough cash for a down payment to buy a house. It's the same reason many people don't move from their apartment or rental home. The Aspiring Home Buyers Profile recently addressed this issue too, finding that 39% of consumers think they need at least 20% down to buy a house. Another 26% think you need at least 15% down.

You don't need that much, though, because you can get financing for as little as 3% down. If you qualify for a VA or USDA loan, you can buy a home for 0% down, but many consumers aren't aware.

The Aspiring Home Buyers Profile also proposed the same question in a survey to homeowners. How much of a down payment do they think is needed? You might be surprised to hear, but 30% of current homeowners think you need 20% down to buy a home. Another 35% believe you need at least 15% to 20% down. 

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More than half of all homeowners think you need at least 15% down to buy a home.

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If you've wondered why you haven't seen many 'for sale' signs in your neighborhood or why housing inventory is so low, it's simple. Many current homeowners don't know that they can move up and make the jump to their dream home without that 20% down payment. The same study found that the median down payment for first-time homebuyers was only 6% for three straight years. The median down payment for repeat buyers in that same time period was 14%.

Non-homeowners and homeowners alike thinking they do more than they actually need for a down payment is holding back listing inventory in southeastern Michigan. Last year at this time we had more than 27,000 homes on the market, and currently, we're down to 16,000. That's a 39% drop inventory, so if you're thinking about selling your house, now is a great time.

If you have any other questions about down payments or you're thinking about selling your house, give me a call or send me an email. I'd be glad to help.

Think You’re the Winner of Our iPad Giveaway?

Today we're excited to announce the winner of our third annual iPad giveaway. Think you might be a winner?

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Today we're thrilled to announce the winner of our third annual iPad giveaway!

Thanks to your support and referrals, our business was up 39.6% last year. Thank you so much for your support!

Without further ado, the winner is...

Melanie Hearsch!

Thanks for checking in today. If you weren't our lucky winner, stick around for another opportunity to win in the future.

As always, if you have any questions for us or you're thinking about buying or selling a home, you can give us a call or send us an email any time. We look forward to hearing from you!