7th Annual Screen Door Open for Special Olympics

The 7^th annual Screen Door Open golf outing to support Special Olympics Michigan is fast approaching. We will be teeing off on Tuesday, June 14^th at Northville Hills Golf Club with dinner that evening. The event is always a great time, the weather is guaranteed to be wonderful and most of all, we will raise tons of funds for Special Olympics of Michigan.

The golf and dinner package is only $105 or dinner only for $40. We will have plenty of raffle prizes, silent auction items, course contest prizes and much more. We still have openings for both golf and/or dinner but we will likely sell out soon. If you would like to sign up online please go to:  www.golfdigestplanner.com/17781-ScreenDoor.

If you have any questions or would like more information, please contact either Jeff Keoleian keoleian@realestateone.com 248-208-2909 or Dave Foess dfoess@relocationamerica.com 248-208-2980.

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Michigan Real Estate Market Update

The first quarter of 2011 has been an interesting ride with home buyer activity at a pace not seen since 2004. Many indicators show that Michigan is actually leading the rest of the country out of the recession, boosting consumer confidence and housing interest.

Looking at the months supply of housing inventory (MSI) gives us a good indication of why the Michigan real estate market has felt so frenzied (MSI of 0-3 months = Sellers Market, 4-6 months = Neutral, over 6 months = Buyers Market). We have been in a Buyers Market for nearly 6 years but in a short period of time we have moved from 8.3 MSI in December to 4.6 months in March and under 3 months for bank-owned for Southeast Michigan!

Within those numbers is a growing housing quality issue. For a percentage of homes where the mortgage has exceeded the market value there has not been an incentive to update, upgrade or even maintain. The result is a higher percentage of homes for sale that are less desirable since they may be dated or require significant work, even if they are not bank owned. So when you factor in the quality of the current housing inventory, the overall market number of saleable homes may be closer to 3 months MSI.

The following chart shows how the market has shifted from 2009 to 2011 in terms of the number of homes for sale and the rate of sales.

It is not hard to see the forces of supply and demand at work over the past three years.





Increasing sales and decreasing inventories have created the multiple offer situations we have seen in the last 90 days. As strange as it sounds, we have a significant shortage of saleable homes for sale.

Does that mean prices are rising as well? Not really, conservative appraisal standards will still hold back values to some degree and at this point in the early stages of our recovery; increased activity translates into a faster sale, but not necessarily a higher price. So pricing still needs to be aggressive to attract attention. But it is clear that for sellers it is the best time in the past six years, with demand exceeding supply, to try the market.

The best advise for a buyer is to be very flexible and willing to act quickly, hesitation will be costly. As prices begin to firm up, buyers will need to shift their mindsets from making deep discount offers to working within the range of the asking prices.

So with all these good signs, what can slow things down again? There has been some conversation about a real estate double dip and in fact Detroit was named as a double dip market (we have not seen that in our data). Increasing gas prices and in general a slowing of consumer confidence will keep a lid on growth. Also the number of bank owned homes being released to the market could have a negative short term affect, but positive in the long term. There is also a large backlog of homes that have been leased because they were not able to sell which, if placed on the market in high numbers, could slow the recovery.

Any market that changes direction, in this case in a positive way, gives off confusing signs to both sellers and buyers, so remember the weirder it gets the better it is for home ownership and home values!



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January 2011 Michigan Real Estate Market Update

The 2011 Michigan real estate market was kicked off in January with the same positive momentum shown in November and December. The inventory of available homes for sale declined, with listings down in all price ranges and markets, furthering our move towards a stable real estate market. Even in this bitter cold month, buyers visiting Real Estate One, Johnstone and Johnstone and Max Broock REALTORS' open houses were up by 50% and showing appointments were up by 25%, compared to December 2010.

So far it appears 2011 home inventories in Michigan will remain close to 2010 levels, with a decline more likely than a rise over 2010 based on an improving economy (an increase in bank inventories would be the only reason for a rise). The months supply of inventory in the under $100,000 range is below the 6 month mark, moving towards a normal market. It is a bit too early in the year to truly claim a normal market, but we should know by the end of the first quarter of 2011. In the over $100,000 price range, the move to a normal market has been slower, but still moving in a positive direction.

The successful formula for this year so far looks like low interest rates + renters coming back into the market + homes getting priced right + banks moving faster = homes selling faster and possibly for more money. A large factor will be the renters who have repaired their credit from as far back as 2006 and still want to own a home. In fact, a National Association of REALTORS (NAR) study showed that 95 percent of owners and 72 percent of renters still believe that it makes more sense to own a home; which further supports consumer confidence going into 2011. NAR economists expect 2011 to be the third best year on record for housing affordability.

All of this good news does not mean values are going to jump or sales will skyrocket, after all, 2010 was a pretty good year in terms of the number of Michigan homes that were sold. But all are clear signs we have moved off the bottom and have enough market momentum that, at least for Michigan housing, we will be able to handle any economic “double dips” that some economists have predicted.

See our how your local real estate market performed in January 2011:
Oakland County, Macomb County, Livingston County, Washtenaw County, Wayne County, City of Detroit, Grosse Pointe and Northwest Michigan!

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November Michigan Real Estate Market Update by Dan Elsea

The November Michigan Real Estate market followed the same pattern as September and October, down from the frantic activity of last fall, but up over the market bottom of 2008. I have included a couple of charts below that give a good representation of how our market has moved over the past two years. Values have stabilized (price per square foot) in the past six months and available homes for sale have continued to fall, which are both positive signs towards a more stable market. Overall the number of months inventory (MSI) is still in the Buyer's market range, but at 5.1 months, it is getting close to balanced.









It is interesting to see the average days on market (DOM) for homes sold has remained about the same over the past two years (the blue line on the chart). This sounds counter intuitive; it would seem the days on market should fall as the market improves. The DOM is a good illustration of the "Tale of Two Markets" we are seeing. A small segment of the market is well priced and selling quickly while the majority remains priced out of the main stream, taking months or even years to sell. So even as available home inventories fall and sales rise, it is all "churning" within a smaller segment of the market. For Sellers, that means they need to be fully aware of the total market and focus on Solds over active listings. Be careful pricing against your current competition. Those still on the market after six months are priced out of the market and not relevant competition.

As expected, our current business mix has shifted even more towards Short Sales in the past few months, currently running at 33% of sales. Traditional sales have also risen to 29%, from a low of 10% in 2008/early 2009 and bank sales/foreclosures about 16%.

So what will next year look like for Michigan real estate? We would expect it to look and feel a lot like 2010, maybe down a bit in number of homes sold, but growing stability in pricing. Also a continued decline in available home inventories, but not falling as fast as 2010 (more bank properties and an improving market will bring out those sitting on the fence). If we simply match 2010, that would be a great success, since it would mean our core economic improvement has made up for the artificial market push this year from the tax credits.

Have a Safe and Happy Holiday!

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