NormsMilfordBlog

As of the end of April, the local MLS reported these stats –

Highlights and Analysis:

• · The median sale price for All MLS sales increased to $97,165 – up by 35%
• · All MLS sales were up by 6.8% for April compared to April 2012. Even with a 21.7% decrease in Inventory!
• · Of the 5,799 sales closed in April 8% (472) were identified as short sales.
• · Of the 5,799 sales closed in April 44% (2,522) were identified as CASH sales

Synopsis of Inventory:

• · Average Days On-Market decreased by 14 days, from 87 to 73.
• · The on-market inventory declined by 22%, from 26,896 to 21,054.
• · Approx. 14% of the on-market inventory is comprised of short sales.
• · Approx. 13% of the on-market inventory is comprised of foreclosures.

What does that mean for you? Well, if you’ve been waiting to see if the market would recover before listing your house, you’ve waited long enough; the market has recovered and taken off, due mainly to the low inventory. You can take advantage of that situation to sell quicker and for more than you would if we were in a more balanced market with normal inventory. Call me today to get an updated Market Analysis for your home to see if you can (and should) sell now.

If you’re a buyer – DARN, you missed the bottom and now will have to pay a bit more. Buyers may also be a bit frustrated by the lack of homes to choose from; however, the ones on the market today are generally in better condition than those at the same price points a year or so ago. The thing you need to be aware of is the need to be ready to act, and act decisively, should you find a home that you like. You will not have days or weeks to make up your mind. Multiple-offer situations and bidding wars are the order of the day now.

Buyers have to be ready to jump and you’ll have to bid at or maybe even above asking price to get a really good home. That also means you need to be all pre-approved for a mortgage, if you are going to use one. There’s no time to say you like a house and then go try to get pre-approved – that house will be gone by the time you get through the pre-approval process. It is also better in the current market to use a Conventional mortgage rather than an FHA or VA mortgage, if you can swing it. The rates are generally running lower on conventional mortgages right now and the sellers don’t have to worry about the FHA/VA appraisal/inspection.

Buyers should also note that foreclosures and short sales have shrunk as a percentage of listings and sales, so you may need a plan “B” if that’s what you were looking to buy. There are still some out there and the fixer-uppers are still around, but while they used to be more than 50% of the market, they are now less than 20% in most area Townships.

Go to my Web site – www.movetomilford.com to see all of the sold homes statistics for this area for April and year-to-date, along with historical data going back 4-5 years. I’ve already posted the sold homes data there for  first 2 weeks of May, too.

I read a blog recently that was based upon a story about an experiment that was done some time ago with fleas in a glass jar. When the fleas were initially put in the jar a lid was screwed on the jar to prevent them from getting out. At first the fleas would still climb up the jar walls and try to jump out. They would bang their heads on the jar lid and fall back down into the jar. After a few days the fleas stopped trying to get out because they had become conditioned that trying lead to a bump on the head and a fall. The lid was then removed fro the jar and none of the fleas tried to get out because they had been conditioned that trying that lead most certainly to failure and a sore head.

The real estate market has undergone similar conditioning that is keeping would-be sellers bottled up. The “lid” that was on our market – low property values caused by the recession – has been removed and yet too few have even tried to get out of the jar and put their homes on the market. Property values certainly aren’t all the way back to where they were at the peak of the bubble that burst and led to the recession; however, they are also not mired at the low point of the recession. Values have come back over 10% year-over-year in many areas and the low inventory in the market right now has led to bidding wars over the few homes that are available. Even appraisals have started coming back to support the price increases.

The point here is to shout out as loud as I can that THE LID IS OFF! TRY AGAIN! You may still bang your head on a market price that is too low to allow you to sell. People who bought at the peak or who took all their equity out at the peak are likely still underwater; however, most owners are probably better off that they know. You won’t know if you don’t have a current market analysis done by a real estate professional. Having a Realtor® give you an updated Comparative Market Analysis doesn’t usually cost you anything. It is quite likely that the recent uptick in the market will allow you to again consider listing your current home, so that you can get on with retirement or job-relocation plans. Call me and let me see what you house is worth on today’s market.

From a press release by the National Association of Home Builders –

WASHINGTON, March 26 – Sales of newly built, single-family homes declined 4.6 percent to a seasonally adjusted annual rate of 411,000 units in February from a strong pace of 431,000 units in the previous month, according to newly released figures from HUD and the U.S. Census Department. Despite the slight decline, this is the second highest monthly total since April 2010 when the federal home buyer tax credit expired.

“New-home sales have been running at a fairly steady pace the last few months, with February adjusting for the strong  sales we saw in January,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. “While the February pace  is encouraging, housing’s recovery is being significantly constrained by overly tight mortgage lending conditions, and policymaker discussions about changes to the mortgage interest deduction could cast a shadow on future housing demand.”

“The February decline is a readjustment to the unusually high numbers that we saw in January, and we are still in line with our forecast for 2013,” said NAHB Chief Economist David Crowe. “This is the kind of modest but steady growth we are expecting to see throughout the year as the economy and job market continue to improve, but constraints on borrower credit, higher building material prices and a limited supply of labor and buildable lots hold back a more robust recovery.”

Regionally, new-home sales activity was mixed in February, with the Midwest posting a gain of 13.7 percent, while the Northeast, South and West showed declines of 13.3 percent, 9.7 percent and 2.1, respectively.

The inventory of new homes increased to 152,000 units in February, which is a 4.4-month supply at the current sales pace. Although this is an increase over the previous month, it is still well below normal inventory trends.

We have certainly seen the strong recovery of new home building in this area, driven mainly by the very tight inventory of resale homes. Builders are selling new homes as fast as they can get them up pretty much in all price ranges. There are still many developments that went belly-up during “The Great Recession” which have not yet restarted. Some of them are likely still bogged down in litigation and some of that is caused by the fact that so many builders got out of the business or lost all of their workers. Combine that with the tight credit market that many smaller builders face and it’s tough to re-launch a building company these days.

With the advent of warmer weather, we should see more used homes come on the market, which will help re-balance the market a bit. Right now we are in a seller’s market, with multiple bids and biding wards not uncommon for really nice houses. Homes values have improved about 8% (year-over-year) so far this year. At the low end of the market, cash is king once again, with most sales under $150,000 going to cash buyers. Those investors are buying them up to rent out, if they are in decent shape; or to flip, if they need repairs.

Once the credit industry gets tired of shooting itself in its own foot by making borrowing so difficult things should improve quickly, too. There is just a lot of pent-up demand in the market right now, leading to frustrated buyers who either can’t find what they want or can’t bid enough for homes due to the difficult mortgage situation. Would-be renters are also having great difficulty finding places to lease. So many displaced people are in credit rebuilding mode after losing a house that there is little lease inventory available right now for middle-class income families. It is almost impossible to find good homes to lease for under $1,000/mo.

My advice for buyers is to be patient and be prepared. You must be ready to make a buying decision and you must be ready with your mortgage pre-approval. You may also have to put more money into the deal than you had hoped, especially if you hit a conservative appraiser who can’t see the value of the property like you do. The market is moving in a positive direction again, in terms of appreciation; so, the risk of the property’s value dropping after you buy is greatly reduced.