The headline of this article from the Traverse Business News “Ticker” today says “Local Real Estate’s Obituary was Premature“Â and is a great, brief summary of what’s happening in our local real estate market.
The headline first brought to mind the Mark Twain quote “Rumors of my death have been greatly exaggerated”, and then, perhaps even a better metaphor for those of us whom have struggled through adjustments in the Northwest Michigan Real Estate market. Â From Monty Python and the Holy Grail:
Well… except for the the part where he gets offed.
It’s a beautiful morning on Mackinac Island, and it looks like the last of the clouds have moved off to the East. Â For those not familiar with Mackinac, it’s one of the most popular tourist destinations in the Midwest, and is an island in Lake Huron at the Straits of Mackinac. Â No motor vehicles are allowed on the island, so once you get off the ferry, your transport is by foot, bike or horse/horse and carriage.
I’m up here with fellow Directors for the Michigan Association of REALTORS(R), and have enjoyed some great conversation with leaders from around the state already. Â This morning Past NAR President Pat Vredevoogd Combs will be sharing some of her insight with us. Â Pat and I are meeting over coffee this morning to talk about the role and potential of social media in association activities. Â Pat’s a fantastic example of what you’d like to see in a leader: passionate about her industry, an active listener, eager learner, empowering of others, and fantastically bright. Â I take special pride that she’s a part of the Coldwell Banker Schmidt organization as well.
While we’re here to discuss association matters and work to develop a vision for the future of our association, the dinner table conversations are a great opportunity to get a sense of what’s happening in markets all over the state. Â The sense I’ve gotten so far is that there is a lot more optimism, and better levels of business are being done by most. Â Deals are still full of hurdles and pitfalls, and financing remains a challenge. Â Short sales still are a great source of frustration, and while the handling of these by the banks may be improving, it has a long way to go and still is an impediment to successful transactions, especially with large national banks.
Summer’s here, and it’s time to get outside. If you’re wishing your home had more curb appeal, are looking to maximize it’s value, or just want to make your outdoor living space more attractive, here is a great resource.
Yep, it’s happened again.  An appraiser working out of his area (only slightly) has confounded me with an appraisal.  This on a bank owned property I have listed.  The seller had it appraised on September 25 2009 (what, 4.5 months ago?) and it came it at $47,000.  I thought that was a bit high, and since the seller wanted to be aggressive, we took it on the market at $34,000.
New appraisal? Â $28,000.
The appraiser discounted listings that sold 3 months ago by 5%, indicating he believes the market to be declining at an annual rate of around 20%. Â That may be in his market area, but in the TAAR MLS, the 4 month average sale price trend is 3.07% to the positive.
Just realized that Friday isn’t a big deal to me any more.
When I had a “regular” job I looked forward to this day and the end of the work week.
Why am I not as excited about Fridays? Â The answer is two sides to the same coin:
Because now my work week doesn’t end, meaning I don’t check out, disengage and take enough time away from work.
Because now my work week doesn’t end, meaning  I love and believe in the value of my work
Are there times when I long for the simpler days when I could walk away from my job at the end of the day? Â Of course. Â But each choice has trade offs, and so far I’m ahead in this bargain.
This is, in my opinion, one heck of a deal. 3 BR cozy cottage style home in Beulah, creek in the back yard, fireplace, walk to Crystal Lake. Once was my Grandpa’s house, last I was in it was in good condition. At $65,000, it’s less than half the price of when it last sold in 2006.
I somewhat regularly post the best deals I come across in my Unreal Deals Blog. Â My latest find looked great on paper and I was excited to feature it:
“My newest UnReal Deal is all about the acreage.
2 Bedrooms, 1 bath, 1232 square feet, plus a 58x 60 horse barn and 66.9 acres. That’s right SIXTY SIX acres. How much would you pay for all this? For a limited time, it’s yours for only $145,000.
Average price per acre for parcels 5 acres or larger is $3261, indicating a land value alone well in excess of $200,000. This proprety was just listed, by Tim Reid, RE/Max Bayshore properties, and while I haven’t toured it yet, it hit my radar and caught my attention.
Turns out on paper isn’t real life. Â Yep, it’s got all those acres, and the house, and the barn, but the house is as bad as the agent let on in his comments, or worse. Â The deck has…let’s call it debris… an inch thick on it. Â The former owner sold all the top soil off of the land, and allowed contractors to dump old concrete and road construction debris out back.
Don’t take this to mean the agent was dishonest in describing the property. Â By no means did he sugar coat it, but by getting caught up in the specifications of the property, I rushed to judgement. Â This might still be an OK deal for the right buyer, but it’s not as UnReal as I had thought.
This is similar to the realization that many buyers face when looking at foreclosed properties- they compete on price alone. Â Condition and history are unknown. Â Nobody is loving them, keeping them feeling like a home. Â The good news for buyers is that more and more sellers are taking competitive stances on pricing, bringing well cared for homes into the mix with foreclosures.
If you’re in the market, don’t limit yourself by telling your agent you’re only interested in foreclosures. Â Just because the bank owns it, doesn’t mean it’s the best deal.
The passing of the $4500 “Cash for Clunkers” tax credit out of the House got me thinking. First, let’s not fool ourselves into thinking that this is serious efficiency legislation- yes, it puts an incentive on deciding upon a fuel efficient vehicle, and that’s certainly more palatable than forcing higher efficiencies and limiting consumer choice. But this is about getting auto sales moving more than anything. And as an old car guy (I grew up around my father’s Chrysler dealership) I cringe when I hear that the “clunkers” traded in would be “recycled”- it’s a certainty that some very serviceable vehicles are going to be taken out of circulation. That means they won’t be available for resale to those who can’t afford a new car.
Let’s compare this incentive to the $8000 first time buyer tax credit, shall we?
Average new-car transaction price has dropped to $27,941, according to The Wall Street Journal. This means that the credit given is 16% of the average price- a pretty healthy incentive, and no restriction on who can buy, other than you have to move up in efficiency.
Compare this with the 2008 US Median Sale Price of $198,100 (per this NAR report) and the $8000 First Time Buyer Tax Credit, and we’re looking at an incentive of 4%. Still very nice, thank you, but think what a bump in the tax credit, to say $15,000 could do. Especially if it were paired with revisions making the credit applicable to all buyers of primary residences!
Danielle Hale, a research economist with the National Association of REALTORS(R) put together this analysis that shows each home sale at the median generating $63,101 in economic impact. That’s an enormous number, and one that drives activity in all sectors of the economy.
My opinion: The current home buyer tax credit is a good thing, but it would be a much more significant force in helping clear inventory and stabilize values with the changes noted above.
Governor Signs Important REALTOR® Legislation:
Public Act 96 Provides Significant Tax Relief for Sellers;
Governor Granholm signed 3 significant pieces of REALTOR® supported legislation. First, legislation enabling home sellers to retain 2 principal resident exemptions for property still on the market after the seller has moved elsewhere in the state. The signing of this legislation is a huge step in aiding struggling sellers who have had homes on the market for over a year and have lost their principal residence status on that property.
House Bill 4215, now Public Act 96 of 2008 sponsored by Representative Ed Gaffney (R-Grosse Pointe Farms) enacts that the seller can retain an additional exemption for up to three years on property previously exempt as the owner’s principal residence if the following circumstances are met:
the property is not occupied,
the property is for sale
the property is not leased or available for lease
the property is not used for any business or commercial purpose
The Michigan Association of REALTORS® (MAR) was active in pointing out to lawmakers that the struggling economy in Michigan has forced several home sellers to relocate to other areas of the state, in some instances continuing to market a home that they have not lived in for over a year. As a result, the home was no longer treated as a principle residence and the homeowner lost the principal residence exemption. Retention of an existing homestead credit for an unoccupied home that is currently for sale would offer relief to sellers who have had to relocate for whatever reason. The MAR is grateful to Representative Gaffney for being receptive and following through on this very important piece of property tax relief.
