Some good things are happening in Detroit. The New York Times and The Washington Post separately listed Detroit as a “must see” destination for travelers in 2008. The casino, Book Cadillac and Detroit Institute of Art restorations (see our separate blog on the DIA). Of course, The Henry Ford, Greenfield Village, and the Rouge River Plant Tours should rank right up there, tooIn Bloomfield Hills, the Cranbrook Institute offers top flight educational programs as well as exhibits and so much more. Check out their site: http://www.cranbrook.edu/
The price of airfare is more reasonable out of Detroit compared to other large airports. Always a bonus in the winter when we Detroiters go in search of sun!
Detroit has so many suburbs that are like small towns within themselves. We will continue to feature some of these towns on future blogs.
Now for the “not so sunny” news. The housing market is down 6.4% nationwide! But housing (being a non-moveable commodity) is still up in some areas and down far more than the national average in others. Michigan is in the “down more” category, although the figures vary widely from suburb to suburb. One interesting statistic is that 25.5% more homes were sold in the city of Detroit last year. Prices, however, had dropped significantly and foreclosure sales were way up.
Many predicted the “housing bubble burst” years ago. When the average price home is out of reach financially for families making the average salary, the market is out of balance and will correct itself eventually. The good news for Michiganders is that if you take a loss on a home here, you’ll make it up on the home you buy elsewhere.
The sub-prime collapse and slowing real estate sales are pulling the entire country into a slump. Other segments of the economy are holding steady and haven’t shown much change, so Wall Street should rebound. Confidence is the key, and people do not expect to “ever” lose money on a house. So confidence is in short supply, because man’s castle may no longer be his home.
BUT there is some good news…Our Relocation America almost set a record last year with 937 sales. Many of those families were relocating out of Michigan but certainly not all of them!
Our Websites continue to grow! We attracted a million unique visitors last year. Surf the net for properties in other cities. Dealing with other Web sites makes ours look that much greater! On ours, you don’t have to register to look. Our Customer Care department runs a Live Chat and also spends the day on the phone calling back people with questions or interests in some of the properties. Most other cities, you have to register before you can view properties; and you have to sift through a ton of Web sites before you find one that is fairly comprehensive.
Thursday, January 24, 2008
Tuesday, January 15, 2008
Just How Bad Is The Detroit Real Estate Market?
Everyone is asking this question along with the follow-up- “What will happen in 2008?” The first question has two levels; the raw numbers and the underlying activity and energy behind those numbers. The raw numbers do not look that bad, showing our markets down overall by 5-11% in terms of unit sales. And in fact the market shows somewhat better in terms of units if you add leases into the count. In many markets, with leases added in, there were actually more unit sales in 2007 vs. 2006.
It is the energy it took to put those sales together and the home value shift which generates the second part to the “just how bad is the market” question. This downturn is the most significant in the past 30 years, not because the market is off so much (the unit drops were as big or bigger in 1991 and 1981) but that homeowners are in a different position. With higher leverage and less equity, negotiations become tighter and foreclosures more frequent, which cause home values to fall more, resulting in a downward value cycle we have not seen before. In spite of this downward value pressure, there are more buyers than in prior downturns (but more listings as well) and the buying opportunities are also at a level most of us have never seen before.
Another core reason for the feeling that the market is way off is the draw of bank owned homes. We are still running over 30% of pending sales from bank owned listings (but only 15% or so of total listings). The result is the non-bank owned home market is actually off 30% or more. Combine that with the number of unmarketable homes for sale (sllers are unable or unwilling to move to the price point required to sell their home),and you can get a lonely feeling some days.
The market has also supercharged the significance of the internet in home marketing. It has become the ultimate sorting process to help buyers through the inventory choices. Curb Appeal has to a major degree been replaced by Web Appeal.
What about 2008? The positive trends are, 1) after nearly three years, sellers do understand the market and either are pricing for the market or in many cases taking their home off the market,)2)we are all much better at working with the market, handling short sales, using the web to display our properties and setting an effective pricing strategy, 3) the word is getting out that, if you can find a way, buy a home now.
There are two main negative trends; our economic climate and home values. Our economy will not change dramatically in 2008, but beyond it will move from being a drag to a positive influence (abeit a slow growing one). Prices will continue to fall this year and most likely into 2009. Does this mean as a buyer you should wait until 2010 to buy? Attempting to time the market has never worked well in stocks or real estate. In spite of the choices, houses are not like stocks and bonds. Each is unique so there is no guarantee that perfect home will be there when the market is “perfect”.
What is the best advice for a Seller for 2008? Foreclosures are your competition. Be aware of those that compete with yours and remember you have an advantage. In general, foreclosures do not compare on condition and “user friendliness” in terms of offers and negotiations. However you will still need to price within the same range as the competing foreclosure homes. Overall, regardless of condition, you should be pricing your home as one of the five lowest in your competing market.
What is the best advice for a Buyer in 2008? Don’t forget about the other 80% of the market. Foreclosures may offer the best price, but a non-foreclosure may offer the best value in terms of condition and price. Look for those homes with recent price reductions, they indicate a flexible seller. Also, with mortgage credit issues still lingering, make sure you have a solid pre-approval before you start shopping.
Keep in mind that there has never been time when our clients needed our services more. Transactions today can be more emotionally draining, but they are also more rewarding, either helping buyers achieve a once in a life time opportunity or helping a seller out of a significant crisis or in many cases both in the same sale.
Here are our numbers for the year, again for over 40 years more than any other broker in the state of Michigan.
Full Year 2007
Sales Volume for 2007 (Closed Transactions): $2.45 Billion
Number of Homes Sold/Leased: 14,025
Number of Unique Visitors to our Web Sites: 1.15 Million
Number of Buyers visiting our Open Houses: 48,498
Number of Showing Appointments for our Listings: 169,710
Number of Mortgage, Title and Insurance Policies closed: 6,725
Our agents did a remarkable job adjusting to our market. We gained market share at a time when most of our competition did not. Our company successfully shifted the approach to selling real estate and is poised to have some great success in the upcoming year.
It is the energy it took to put those sales together and the home value shift which generates the second part to the “just how bad is the market” question. This downturn is the most significant in the past 30 years, not because the market is off so much (the unit drops were as big or bigger in 1991 and 1981) but that homeowners are in a different position. With higher leverage and less equity, negotiations become tighter and foreclosures more frequent, which cause home values to fall more, resulting in a downward value cycle we have not seen before. In spite of this downward value pressure, there are more buyers than in prior downturns (but more listings as well) and the buying opportunities are also at a level most of us have never seen before.
Another core reason for the feeling that the market is way off is the draw of bank owned homes. We are still running over 30% of pending sales from bank owned listings (but only 15% or so of total listings). The result is the non-bank owned home market is actually off 30% or more. Combine that with the number of unmarketable homes for sale (sllers are unable or unwilling to move to the price point required to sell their home),and you can get a lonely feeling some days.
The market has also supercharged the significance of the internet in home marketing. It has become the ultimate sorting process to help buyers through the inventory choices. Curb Appeal has to a major degree been replaced by Web Appeal.
What about 2008? The positive trends are, 1) after nearly three years, sellers do understand the market and either are pricing for the market or in many cases taking their home off the market,)2)we are all much better at working with the market, handling short sales, using the web to display our properties and setting an effective pricing strategy, 3) the word is getting out that, if you can find a way, buy a home now.
There are two main negative trends; our economic climate and home values. Our economy will not change dramatically in 2008, but beyond it will move from being a drag to a positive influence (abeit a slow growing one). Prices will continue to fall this year and most likely into 2009. Does this mean as a buyer you should wait until 2010 to buy? Attempting to time the market has never worked well in stocks or real estate. In spite of the choices, houses are not like stocks and bonds. Each is unique so there is no guarantee that perfect home will be there when the market is “perfect”.
What is the best advice for a Seller for 2008? Foreclosures are your competition. Be aware of those that compete with yours and remember you have an advantage. In general, foreclosures do not compare on condition and “user friendliness” in terms of offers and negotiations. However you will still need to price within the same range as the competing foreclosure homes. Overall, regardless of condition, you should be pricing your home as one of the five lowest in your competing market.
What is the best advice for a Buyer in 2008? Don’t forget about the other 80% of the market. Foreclosures may offer the best price, but a non-foreclosure may offer the best value in terms of condition and price. Look for those homes with recent price reductions, they indicate a flexible seller. Also, with mortgage credit issues still lingering, make sure you have a solid pre-approval before you start shopping.
Keep in mind that there has never been time when our clients needed our services more. Transactions today can be more emotionally draining, but they are also more rewarding, either helping buyers achieve a once in a life time opportunity or helping a seller out of a significant crisis or in many cases both in the same sale.
Here are our numbers for the year, again for over 40 years more than any other broker in the state of Michigan.
Full Year 2007
Sales Volume for 2007 (Closed Transactions): $2.45 Billion
Number of Homes Sold/Leased: 14,025
Number of Unique Visitors to our Web Sites: 1.15 Million
Number of Buyers visiting our Open Houses: 48,498
Number of Showing Appointments for our Listings: 169,710
Number of Mortgage, Title and Insurance Policies closed: 6,725
Our agents did a remarkable job adjusting to our market. We gained market share at a time when most of our competition did not. Our company successfully shifted the approach to selling real estate and is poised to have some great success in the upcoming year.
Sunday, January 13, 2008
Birmingham - A Walkable Community
Birmingham, Michigan (MI) has been selected as one of the most "Walkable Commnities" in the U.S.A.
If you get a chance to visit and see the quaint, upscale stores that line downtown Birminghamm, take a day and stroll. You will certainly have a memorable experience.
Homes match the rythmn and style of the community. Real Estate One and its "boutique brother" Max Broock Realtors currently have 272 homes listed in just the city of Birmingham.
Upscale homes like this line city streets, many built as far back as the early to mid 1800's. Many of the homes are within walking distance of the charming downtown Birmingham area. Luxe shops along with trendy restaurants, coffees bars, and theaters define downtown Birmingham. Residents love the mix of entertainment and home life the community offers.
But even now, with Michigan's challenging economy, Birmingham is not an inexpensive place to live.
The average home was listed at $690,000 and average sales were running at $325,000.
The median income for the city of Birmingham is $100,000 and their schools score high on national tests.
The population is just below 20,000 which gives this Detroit suburb a small town feel.
Oddly enough, the town was founded in 1818 by four men with a joint vision. Elijah Willets, Benjamin Pierce, John Hamilton, and John West Hunter named Birmingham after England's great industrial district. Instead of seeking rich farm land, they wanted to build a manufacturing based economy. By 1860 the industrial base was gone, and Birmingham was morphing into the residential/professional/retail community it is today.
The population tends to the young side; 35% are between the ages of 25-44; 26% between 45-65. They are also well educated. Over 38% hold bachelor's degrees and 25% have earned masters' degrees. Not surprisingly, Birmingham's public and private schools score high on standardized tests at all levels. Over 98% of high school graduate in this upscale town.
An active downtown draws residents and non-residents. With theaters, museums, and shopping, Birmingham, Michigan is a great place to spend a little time!
Currently Birmingham has a 23 month supply of homes for sale. Real estate there is similar to other communities in Michigan. Areas are carrying a higher listing inventory than usual, and prices are sliding. But if you are in the market for a home, never has choosing Birmingham cost you less.
For more information, visit their Web site at http://www.birmingham.mi.us/. For a list of downtown activities, check out http://www.enjoybirmingham.com/.
Wednesday, January 02, 2008
Why Detroit Is A Great Place to Live - DIA
Detroit offers a wealth of culture and entertainment. The newly renovated Detroit Institute of Arts (DIA) is a steal at $8 per person. You are greeted by radiant disks suspended from the ceiling; they look like thousands of twinkling lights. The museum itself is an architectural treasure. Its extensive collection offers a variety of art styles and artists and boasts many originals including Van Gogh's self portrait. Of course there is a "no touch" rule in place, but you can get up close and personal with the artwork; so you can admire each brush stroke or pen strike. (Did you know that some historians think Van Gogh had Meniere's Disease and cut off his ear in a vain attempt to stop the constant roaring in his ear?)The DIA hosts many special events, some free with admission and some with extra fees.Friday Night Live, the museum stays open to 10 p.m. So grab a bite, enjoy live entertainment, drop in workshops, or a tour of the fantastic museum. Recently, The Dance Project of Holland, Michigan performed a dance choreographed to represent the painting "The Garden of Earthly Delights."
Entertainment varies greatly as artists from all media perform.Target sponsors Family Sundays with art classes for all family members included in the price of admission. Brunch with Bach is another popular wintertime tradition.You can also buy year long memberships. There are a number of sponsor levels available, but an individual membership can be purchased for $65 or a companion membership for $80. There are discounts for students and senior citizens. What's not to like?
So if you are moving to Detroit, put a big smile on your face. The Detroit Institute of Arts is only one of many attractions that make the metro area a GREAT place to live!
Keep checking back in! There is more to come on sports, real estate, autos (of course), education, and music in the Motor City!
Keep checking back in! There is more to come on sports, real estate, autos (of course), education, and music in the Motor City!
(Photos used courtesy of Greg Smith and may not be reproduced.)
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