NormsMilfordBlog

There was an old 1960’s song that had the line “nowhere to run to, nowhere to hide…” It was done by Martha Reeves and the Vandelas (click here to hear and see the song on YouTube). I thought of that song as I was thinking about the current tight real estate market. There’s almost literally nowhere to go if you are forced out of your home through foreclosure or because of a short sale. The rental market is extremely tight right now; or at least it looks that way.

As a Realtor®, I get calls all the time from people looking for a place to lease or rent. Usually these are people who’ve just gone through an event that forces them to rent for a few years, which they repair their credit. I try to help, but often I have to advise them to get in the car and start driving the streets. That’s because, with the market so tight, landlords are just throwing a “for rent” sign in the yard or window. The landlord avoids having to pay any commission on those rentals; however, renters who deal directly with the landlord take a risk by not having the advice and negotiating help of a Realtor.

One issue that would-be renters don’t realize is that they will need to provide financial information, including a credit check, to the landlord, so that he/she can make a decision on whether to rent to them or not. Landlords are looking for good renters whom they can count on to be there with the rent every month. They don’t want deadbeats in the place that they later have to evict.

Quite often I will have the would-be renters write a letter to the landlord explaining the situation that brought them to this point and also explaining why they are now a good rental risk. This usually applies to someone who may have had a temporary setback in life that caused them to lose their house, but who still has steady employment and a reasonable current debt load.

Things that landlords generally don’t like to see include bankruptcies, someone with temporary or part-time employment only or people whose current debt load is more than 50% of their monthly take-home pay. Those are red flags for a landlord and may point towards problems ahead. People with those things in their lives may be best off in an apartment setting for a while.

If you find yourself in the unfortunate situation where you need a place to live for a couple of years as you get your life back on track you can’t be too picky in the current market. You may also have to make some hard choices, especially as far as pets are concerned. Trying to find a place that will accept your 100lb Great Dane along with you is a BIG challenge.  Some landlords will also accept small to medium dogs but not cats. You just have to live with that, it’s their right to refuse to rent to you on that basis alone.

So, it’s not that there’s absolutely nowhere to run to, but temporary places are harder to find. Call me and let me know what area you need to be in and I’ll look for you. In the meantime, get your credit report ready and write that letter to the landlord explaining why you’re a good risk for him/her to take. I’ll find you a place to hide, but you’ll need to help me convince the landlord that you are not a risk to run.

I track sales in 9 local real estate markets that surround (or are near)  Milford – Milford (Village and Township), Commerce Township (to include Walled Lake and Wolverine Lake), Highland Township, White Lake Township, West Bloomfield Township and Lyon Township and South Lyon in Oakland County;  plus Green Oak, Brighton (Township and City), and Hartland Township (and Village) in Livingston County. I’ve been tracking these same nine markets for a about three years and five of the nine for several years longer.

Basically I show the sales data every week and report the following statistics – Whether the sale was a distressed sale (a foreclosure or short sale), the listed price, the sold price, the percentage of sold verses listed prices, the SEV for the home as recorded in the Public Record Database at the time of the sale, the SEV multiplier that the sale price represents (SEV is supposed to be ½ of the market value, but these days homes are selling for 2.2 to 2.5 times the SEV, which indicates that the assessors overshot in the down direction), The number of days that the home was on the market (DOM), the Square Footage of the home as reported in the MLS and the listed value per Sq. Ft. and the Sold value per Sq. Ft. For each market I show the Averages for those values and the Median value for the data.

In housing in this area, when the bottom dropped out of the markets we dropped from sale values in the $124-144/Sq Ft ranges during the peak in the markets that I track down to markets that were averaging $70 – $80/ Sq Ft. Admittedly much of that severe drop was due to the high percentage of foreclosed houses in the sales mix during that period; however, it did impact the market values of all houses on the market. So we are not back to peak levels and may not get back to that level for a decade or more (if ever); however, we are getting closer to market values that will allow many who have been sitting on the sidelines to consider listing their homes.

I’ve just completed updating the sold real estate stats for the markets that I track locally – Milford, Highland Commerce, White Lake, Lyon &; West Bloomfield in Oakland County; and Green Oak, Brighton and Hartland in Livingston County. So how are we doing so far in 2012?

Did more homes sell in Highland or Milford in July? How about year-to-date? Is the median home price higher in Commerce or Lyon? How about the cost per square foot? Which market had the most New-Build sales in July? Is Brighton on average more or less expensive than West Bloomfield in terms of average cost per sq ft for a home? If I was looking for a lower cost (average sale price) home market, would I look in White Lake or Highland? Which market had the shortest days-on-market for July? How about year-to-date? Which market had the least amount (%) of distressed sales – short sales and foreclosed sales – during July? How did July compare to June in those markets?

You can find the answers to those questions and more at my site www.movetomilford.com under the choice “What have homes in this area sold for?” While you’re there you can also check out what events are coming up in the Milford/Highland area or find a referral to a local business. If you want to know lots more about Milford, just choose the “Click on Milford” button at the top of the page for everything about Milford.

I live and work in Milford, Michigan and think it’s the greatest place in Michigan to live. There’s always something to do in the area for the whole family and lots of great restaurants to visit. The shops downtown are still useful for shopping for more than knick-knacks (although we have those, too). Soon we will be hosting Milford Memories, one of the largest Street festivals in Michigan; followed by the Milford Home Tour and the Milford Car show and the Tractor Show on the third weekend in September.

So study the real estate stats and learn more about Milford and when you’re ready to Move To Milford give me a call, I can help with that.

From the Jack’s Winning Words blog comes this gem – “Don’t wait. The time will never be just right.” (Napoleon Hill) Hill was one of the original writers of the value of positive thinking. “Believe it, and you can achieve it.”

If there was ever a saying that we, as Realtors, need to get across to potential sellers it is that one. Too many seem to be frozen by the wait for just the right time. For a long while it was waiting until the value decline stopped. Well, it has stopped in most areas and values are now inching back up. So, now, too many are waiting for the value to come back to where it was. That will be a long wait – at least a decade or more in most areas.

We Realtors tend to think that people aren’t listing because they are underwater on their mortgages. Many would-be seller aren’t underwater at all; they just can’t let go of the “value” that they thought they had at the peak of the market. So my advice is “Let it go.” You need to get real and let go of the mental picture that you are clinging to of the value of the place at the peak of the real estate bubble. Your house has lost 25-40% (depending upon the area) of its peak value. It is what it is today. Right now there are buyers out looking. If you’ve been sitting on the sidelines waiting for things to be just right, this is as close as it’s going to get in quite a while. Take to heat the message of Napoleon Hill – “The time will never be just right.”

In fact, the time is as right as it can get, right now in many areas. The foreclosure inventory has been depleted in many market areas, with fewer new foreclosures happening currently. We have flipped over to a seller’s market here in my area, with too many buyers chasing too few listed homes. Multiple offers and offers above asking price are the norm now. Sellers are selling faster and getting market price for their homes right now; they just won’t get 2006 market price. So, if you’ve been delaying your plans to make that retirement move or that move to downsize your life, now is the time to take action. Call your local Realtor and explore the market value of your home with him/her. The time is right to take action.

We  are at the halfway point in the real estate year in this area and so far things have shown improvement. Foreclosure sales are down, as are short sales. Home values have stabilized and even started to rise a bit in some of the local markets. Low inventory is still an issue for the local market, but even that seems to be getting better.

I’m seeing many sales with sale price to SEV ratios well above the 2.0 level. That says two things – prices are coming back and the assessors have overshot assessment adjustments ont he low side. You can be sure that they will adjust that as quickly as they are allowed under the Headley Amendment.

Low appraisals are still an issue, too. Appraisers are still using too many distressed sales as comps, but hopefully that will self-adjust as the distressed sales decline as a percentage of overall sales. We are also still seeing too many cases of out-of-area appraisers being assigned to appraisal jobs by appraisal management companies. The lenders are getting better about challenging that practice, so hopefully that too will self-adjust.

Of course the overall slowness of the recovery from the “Great Recession” has impacted real estate, too; however, the pent-up demand that has been building in the market is starting to assert itself, especially in the move-up segment of the market. Because of the lack of inventory, the demand in this segment is helping the new-build segment as more and more stalled out developments are re-energized. The combination of low home prices and low mortgage rates is also propping up the low-end of the market.

So, while we are not out of the woods yet, maybe we can see the edge of the forest. We have flipped over to a seller’s market with the low inventory and are seeing many areas with less than a 6 month supply on houses at the low to mid-pricing points. That’s good news for sellers but a bit frustrating for buyers. The rest of 2012 should be good also as the economy continues to improve and the market seeks a more state.