Are things getting better in real estate? We see articles in the papers every day about the real estate market. One day it’s up the next it’s down. What are we to think? Well, many, if not most, of those articles are picked up by the local papers from national news services; so, at best, they reflect a national look at the market. In many cases they are actually stories about other parts of the country and in most cases they are stories based upon old data. It takes time to gather and analyze home sales data, so it isn’t unusual to see articles that are excitedly tell you about home sales one of two months ago. I saw one today (June 4, 2012) that was reporting the “News” about home sales in April.
What’s really important is what is happening in your market and what is happening now. I focus upon the little patch that I tend to list and sell homes in within Southeastern Michigan – Milford, Commerce, Highland, White Lake, Lyon and West Bloomfield Townships in Oakland County and Green Oak, Brighton and Hartland Townships in Livingston County. I track sales of all of the homes sold above $20,000 in those Townships every week. I realize that the $20K number is somewhat arbitrary, but I figure homes sold below that cut-off are probably tear-downs being sold for the land value.
Anyway, I gather data from the local MLS and then do some calculations of my own to allow me to report the data in a way that at least I think is meaningful for buyers and sellers. I show the home addresses, the asking and sold prices, whether the sale was a distressed sale (marked as S for a Short Sale and F for Foreclosures). I also calculate and show the sold price as a percentage of the asking price and then show the State Equalized Value (SEV), which is a number unique to Michigan that indicates ½ of the assessed value of the property, and calculate the ratio of sold price to SEV. I include the number of days that the home was on the market, the square footage of the home and then show the asking cost per Sq Ft and the sold cost per Sq Ft.
Those statistics when analyzed will give a either a buyer or a would-be seller lots to go on to understand the market that they are in right now. I also show the Y-T-D data for each market and have accumulated about 4 years of month-by-month history that is also accessible. Using this data, you can look at the market in a historical perspective, comparing a month’s sales over multiple years, like below. Or you can go look at a specific market Y-T-D to see how it is tracking this year.
Milford market year-over-year comparison for May 2012 thru May 2012 –
Sold in May 2012 – 22 homes at an average price of $200,487 and an average cost per Sq Ft of $94, with 45% of the sales being either foreclosures or short sales.
In 2011 the same stats were – 15 homes sold for an average price of $185,417 at an average cost per Sq Ft of $79, with 60% of the sales being distressed
In 2010 the stats for Milford were – 18 homes sold (56% of which were distressed sales) at an average price of $188,000 and an average cost per Sq Ft of $96.
Of course this is still all historical data, no matter how recent the history; and it is always difficult to spot trends when looking at very small amounts of data and when things are changing rapidly. One major mission ingredient of the market that I have no way of obtaining the data for is how the appraisals are trending. I can see what has happened to assessments over time in the data and I can now see that the assessors have, in fact, overshot the mark in this area with assessed values that are now too low, compared to the market prices. Since homes are selling for values that are higher than the assessed values, I assume that the appraisers have adjusted faster and better than the once a year assessments would indicate.
I started tracking and reporting sales in some of these markets as far back as 2007; however, the format of what I tracked and how I reported it has changed over time, so it takes a bit of work to do comparisons that far back.
Anyway, go to my Web site www.movetomilford.com to see all of the data and reports for the markets that I track. At a gross level they all appear to be doing better and the statistics that I keep about distressed sales show that there are less and less of them this year in most of the markets; however, the cost per square foot is still relatively low in all of the markets that I track, compared to where they were a few years back.