Michigan Monthly Market Report – April 2013
Michigan Monthly Market Report – April 2013
For the first quarter of 2013, Michigan is still a leader in the housing recovery but a number of states have caught up, extending the housing recovery across the nation. Throughout the state we are seeing inventory shortages and rising values. Southeast Michigan remains the most active with the lowest inventory and strongest buyer demand. A new term is being used in the industry: the Shadow Demand. Like the Shadow Inventory which represented the potential bank-owned homes that could go on the market, the Shadow Demand represents the pent-up Buyers who have been holding back for the past 5 years. While the release of the shadow bank inventory has been slow and steady, the Shadow Demand seems to be jumping in all at once.
We expect a shortage of homes for sale throughout 2013 and 2014 with inventories rising and demand slowing down a bit in 2015 as interest rates increase and the Shadow Demand is dissipated. How quickly home inventories will raise depends on two factors: the pace of appreciation, and more importantly, how quickly Sellers realize that home values are improving. For many Sellers, values have risen enough that it makes sense to sell now, particularly if you are also buying.
For anyone who has purchased a home in the past four years, particularly investors, it is a great time to test the market. You should be pleasantly surprised on the potential return on your investment. The same holds for those who leased their homes, waiting for the values to rise.
Historically, with low For Sale inventories, home builders fill the gap. So far, local home builders, which traditionally make up the majority of new construction, have had difficulty obtaining financing so they have not been able to supply any inventory relief.
Following the market trends over the past three years, you can see values have been moving off the bottom since the spring of 2011 and gaining speed these last three quarters.
Charts: Average Cost per Square Feet
The next two charts show both the decline in the number of new home listings entering the market as well as the increase in the number of homes being placed under contract. It is interesting to note the declining bank-owned share of the market.
Charts: Home Listings Entering the Market & Home Listings Placed Under Contract
The result is a big increase in Sales Absorption, which is the percent of the available homes being sold each quarter. Considering that about a third of homes for sale are not really saleable because of condition, motivation or price, a 44% rate this past quarter represents a true absorption of closer to 70%, which is the driving force behind the double digit appreciation rates.
As a company we continue to gain a bigger piece of the pie, and most importantly, we are gaining market share in the number of new listings taken. We are working hard to reach out to you, our clients, and show you the opportunities in this market.
It is important to note in this improving market that a decline in the number of sales reflects the shortage of inventory, not a market slowdown.
If you would like more information on the market, like to list your property, or want information on any property with any broker, you may call or email at anytime.
Thank You,
Dennis L Hubbard
Integrity, Discipline and Common Sense
P: (248) 633-6636
dennis@dlrealestateteam.com
http://www.DennisLHubbard.com
Sept 2012 Monthly Stats
The Real Estate One family of companies have sold/leased over 22k homes YTD as of Sept 30, 2012.
CTiVP and HHS Team Up to Present Candidate Debate
As a member of the Committee to Increase Voter Participation (CTiVP), I was fortunate enough to have the honor of working with Farmington Hills City Councilman Richard Lerner (City Council Liaison to the CTiVP) in putting together the recent debate held at Harrison High School (HHS). Attendees included Congressman Gary Peters (D-9th Congressional), Vicki Barnett (D- 37th District), Bruce Lilley (R- 37th District candidate) Cathy Webb who represented Bill Dwyer (R- Oakland County Commission 14th District) and Todd Stearn (D- Oakland County Commission 14th District candidate) The debate moderator was Harrison student Connor Rubin, who did an amazing job organizing and presenting student questions for each of the candidates. Connor previously represented Harrison High School as one of two Michigan students at the United States Senate Youth Program held in March 2012. The student submitted questions were insightful and covered a wide range of topics from jobs and college costs/funding to serious social issues such as gay marriage and medical marijuana. Overall the event was considered a success by everyone involved.
On behalf of the CTiVP, I’d like to thank Richard Lerner, Angela Leach (Academic Dean at Harrison High School) and each and every candidate who graciously took time out of their busy schedules to attend this important student event. Click here to view photos from the debate.
Here are some local news articles covering this event.
Renovations on a small budget!
With a small budget to update the Sugar Shack, we had to decide what was crucial to change to make it aesthetically habitable for a few years. We realize that there may be some things we want to do later, especially if we are here longer than a couple of years, but this was a good start. Besides painting, here are the three things we did:
Median Home Prices by Zip Code
The following is a breakdown by zip code of some key information regarding home sales activity in FFHILLS.
January through June: Number of Homes Sold 
48331 - 2011 / 2012: 109 / 108
48334 – 2011 / 2012: 129 / 108
48335 – 2011 / 2012: 92 / 76
48336 - 2011 / 2012: 159 / 216
January through June: Median Home Prices 
48331 - 2011 / 2012: $148,000 / $239,900
48334 – 2011 / 2012: $157,450 / $135,000
48335 – 2011 / 2012: $215,000 / $165,450
48336 - 2011 / 2012: $60,000 / $92,000
Two of the four zip codes experienced a meaningful decrease in the number of homes sold in 2012 over the same period in 2011. Interestingly, those two zip codes have also suffered a decrease in median sale price. Of the two remaining zip codes, one was nearly identical to 2011 while the other saw a significant increase in the number of sales. Let’s examine two key concepts affecting these numbers.
Value is relative. Any item offered for sale is truly worth only what another is willing to pay for it. Unlike stocks on the New York Stock Exchange, homes are not sold in a liquid market populated with millions of buyers and sellers defining the relative value in real time. Homes are unique in that every home has an unlimited combination of features, floor plans, updates, etc that will exactly match no other home. Add to this the overwhelming indicator of value, which is location, and you could have a difficult time estimating value. Areas with more sales activity provides a more predictable assessment of value than an area with fewer recent home sales. Fewer recent sales means fewer possible properties that accurately compare to the subject property. Without the benefit of comparable sales a prospective buyer will understandably offer as little as he or she believes the homeowner would consider. This could explain why the areas of FFHILLS that have have seen a decrease in sales have also seen a decrease in prices.
Supply and Demand reigns. The theme of the 2012 real estate market has been low inventory resulting in some sellers receiving multiple offers. Multiple offers typically come with an upward push in prices, especially on non-distressed properties. Investors of distressed properties typically have a fairly accurate assessment of the cost of repairs and will move on from a property if their desired profit margin is in question. Once the property is renovated it is often sold at a higher price which certainly has had some affect on the numbers. There are, however, plenty of prospective buyers who plan to live in the home they purchase. The vast majority of these buyers are looking for “move-in” ready homes and finding very little inventory to choose from. So when they find “The One”, they are more willing to pay a perceived premium to secure the one home they spent weeks searching for. Low inventory of “move-in” ready homes is largely due to the fact that many homeowners still owe more than their home is worth, despite the recent upward movement in median sales price. There is no way of knowing what percentage of homes sold had multiple offers to choose from, but it is reasonable to expect the homes with multiple offers were sold at or above list price much more often. The key is getting multiple offers, a topic for another time. Inventory or lack there-of is certainly an additional component that leads to the numbers presented here.
The next time a for sale sign pops up in your neighborhood, remember this: you will be armed with that much more information when the time comes for you to make a decision regarding the sale of your own home!
Police Activity in Westlake Sub
One of the Oakland Cty Sherriff vehicles assisted by helicopters SE of 10 Mile and Orchard Lake in #FFHILLS
One of the helicopters assisting police on the ground SE of 10 Mile and Orchard Lake in #FFHILLS
While police search my neighborhood for 2 armed gunman, this is what my kids decide to do inside the safety of their home! Parenting is about more than keeping the bad guys out of their home, but out of their mind as well!
Greeene’s Hamburgers in Farmington Hills earns BAG-IT Certificate
Established in 1957, Greene’s Hamburgers is a family owned business open 24 hours a day, 7 days a week.
There are many who have taken sides in the Bates vs Greene’s debate. A creative and fun group of people created a Committee in support of the two local businesses. Both the employees and the customers have enjoyed this certificate and the spirit of friendly competition it represents. To “Like” Greene’s on Facebook, Click Here.
Does a Website Elevate a REALTORS Success?
The National Association of REALTORS (NAR) recently found that nearly two-thirds of REALTORS report having a web-site for at least five years. Does having a website elevate their level of success? According to the same 2012 survey of 58,823 NAR members, the REALTOR’s website typically brought in just four inquiries and only three percent of their business came from their website. Sounds like a resounding “No, it doesn’t elevate their level of success”, right?
Allow me to walk you through a quick exercise. The median gross income of a REALTOR was $34,900 in 2011, which means $1,047 of their income (3%) came from their website. REALTORS spent a median of $200 to maintain a website last year. So mathematically it makes sense to invest in something returning over 500% of the investment. But if you think like I do, then you wonder… with the power if the internet at their disposal, why aren’t REALTORS earning anymore than the overall national median adjusted gross income? The answer lies in whether or not these websites provide any value to you, the consumer.
More than half of REALTORS are using social media sites such as Facebook, Google+ or Twitter, yet only one in ten have a real estate blog. Having a social media site is very different than using a social media site. The online community is continuously evolving. The “Set it and Forget it” website strategy of the 1990′s is long gone. Without consistent engagement with their online community, a REALTOR will be forgotten quicker than the long lost high school bully who just sent a “Friend Request”. As critical as engagement is, content is the new king. The most commonly found information on websites, among commercial and residential REALTORS, is the REALTORS own listings.
Posting the listing alone ,which is usually automated, is a bare minimum attempt to harness the power of the internet. Considering the vast majority of home-buyers now begin their search online before contacting any real estate agent, there is strong evidence to suggest that 500% return on investment is the default return for minimal effort. Imagine how much more value could be realized when a REALTOR puts forth an honest effort to provide you with content that is relevant, helpful, and even (at least occasionally) entertaining!
What do you think, does a REALTOR having a website impress you? What type of content would capture your attention?
From No A/C to Working A/C in One Hour
The temperatures are mild so there is no need to turn on the A/C just yet. Why spend the money cooling a home when mother nature will do it for you? All you have to do is open your windows. When the temperature rises to a point the A/C is an absolute must, you’ll turn on the air and enjoy the man-made cool air coming from your vents. That is, unless there is a problem with the A/C! It happens every year, the weather warms up and you open your windows. It would be a good idea to also give your A/C a test run before the weather warms up too much.
Don’t wait until you NEED the A/C to test it.
Yesterday I gave my cooling system a test run and to my disappointment, discovered my A/C unit was not working. I just bought this home less than a year ago. It was a bank owned home which means I have very little information regarding the history of maintenance. I could troubleshoot a few items on my own, but decided to call in the experts to look at my system thoroughly to bring me up to speed on where my cooling system is at in it’s lifespan. The last thing I want is to get my system working now, then on the first 100 degree day have a failure. At 1:47pm I called AJDanboise on Grand River here in FFHILLS. My hope was to get an appointment to have a technician come out later in the week. I was shocked to hear there could be a tech out the same afternoon. I was told to expect a phone call from a tech when one was available and ready to come to my home. At 1:57pm I received a call from Noah, a HVAC technician. Five minutes later, he was in my driveway ready to work!
AJDanboise Heating and Cooling
Noah was clearly knowledgeable, professional, and eager to solve my cooling problem. As it turns out, my problem was in the connectors of the thermostat. It’s an easy simple fix. Rather than cutting out early having solved the problem, Noah continued to go through the entire system.
Noah S: HVAC Technician with AJDanboise
Everything from the capacitor to the filter was examined. Evey step of the way, Noah was informative, providing maintenance and troubleshooting tips. He never tried to sell me a new unit. He was a trustworthy professional HVAC Technician. In today’s business environment, you do not always get what you want or expect. I am happy to say, in this case, I received more than I expected.
In just under one hour, I went from initial phone call to working A/C and more knowledge than I can retain. I would recommend AJDanboise to anyone in FFHILLS.
