Real Estate Information

The price of real property tends to go up and down based upon current market conditions and a host of other factors. Whenever there are market fluctuations, some sellers begin to worry that their Home may not sell quickly, and some people may avoid listing their property altogether. It’s important to note that fluctuations in the real estate market are normal, and are actually nothing to worry about.

Home prices rise whenever there is a shortage of properties and an abundance of buyers. Likewise, they’ll decrease if the number of available homes is higher than average. That doesn’t necessarily mean a seller should lower their asking price, as homes that are in prime condition tend to fetch top dollar no matter what the market is currently like. Not only that, but buyers in slow markets tend to know exactly what they want, and are willing to pay more to get a home that meets their requirements.

The fact that buyers know what they want also means that they will easily recognize when a home is overpriced. This means that no matter what the current market fluctuations are, an overpriced home will almost always take longer to sell than one that is priced according to current market trends.

Buyers and sellers alike can benefit from contacting a professional real estate agent before taking any other action. A real estate agent can advise sellers as to current market conditions in order to help them price their homes accordingly. This agent can compare recently sold homes in a given area in order to come up with a price that will attract potential buyers and still net the homeowners a reasonable amount of money left over.

Real estate agents benefit buyers because these professionals can help them put together a list of “must have” items in order to find properties that fit their needs precisely. In many cases, the best advice a real estate agent can give a potential buyer is to become pre-approved so that he or she will know what price range to begin looking.

To follow up from my previous post about FHA mortgage limit changes this year, there are some additional mortgage changes to know in 2014. Buyers who are looking to purchase a new Home need to be aware of current changes in mortgage rules in order to choose the loan that is best for them.

One of the biggest changes involves FHA loan limits. The maximum amount of an FHA loan decreased from $729,750 to $625,000 beginning January 1, 2014. A number of counties across the country saw significant decreases, as the loan limits are based upon median home prices in a given area. The expiration of credits given by the Housing and Economic Reform Act of 2008 has resulted in the agency now approving 115% of the median Home Price in a given area as opposed to 125% previously.

The Consumer Financial Protection Bureau (CFPB) now requires lenders to follow an “ability to repay” mandate when approving loans. This new regulation requires that lenders follow a precise set of guidelines when it comes to calculating income, debt and assets. In doing so, they are granting what the government deems to be a “qualified mortgage” in an effort to reduce the number of foreclosures that take place in the future.

Self-employed workers face even more difficulty when it comes to obtaining a “qualified mortgage” than others will. That’s because the new rules make it more difficult for people without a W-2 form to prove their debt-to-income ratio than it is for others. This is true even for those who have extremely high credit scores and a high net worth. It seems that the government is concerned that tax write-offs will reduce the amount of taxable income a person earns, thereby making income statements less accurate than W2 forms.

Some positive mortgage changes stem with new caps placed on loan origination fees. Those who obtain a qualified mortgage are limited to no more than three percent of the loan amount for points and fees charged by the lenders. Unfortunately, there is no cap on origination fees for consumers who do not obtain a qualified mortgage.

As always, buyers should check with their lender to find out about specific changes that are mandatory by a particular institution.

The fact that days are shorter and colder in winter often means that selling a Home during this time of year is especially challenging. That doesn’t mean it has to be impossible, as there are some tips for winter home selling people can do in order to increase their odds of securing an offer.

Keeping driveways and walkways clear ensures that real estate agents and potential buyers are able to get to a property. If they can’t get to a particular home, they will bypass it and head to another one instead. Those who cannot clear snow and ice themselves should consider hiring a professional service to help them with this.

Outdoor lighting should be bright enough to illuminate a home’s best features, while also making it safe to enter. Adding new lighting or replacing burned out bulbs can ensure the property’s best features are highlighted, and which guests feel comfortable coming and going.

The inside temperature of a home should feel nice and toasty. When people enter, they don’t want to feel cold, as this will make them wonder whether or not the heating system works efficiently. If a home is vacant, installing a programmable thermostat that is operable by smart phone will allow homeowners to turn the temperature up just before visitors arrive.

Just as in the summertime, everything inside the home needs to be clean, tidy and well-staged. Plastic mats near the doorway will contain snow and mud, thereby helping carpets to stay clean. The angle of the sun during winter also makes streaks and grime more noticeable, which is why washing windows inside and out is highly recommended.

Doing some little things to make a home seem warm and inviting will go a long way toward enticing buyers. Simple things, such as flameless candles burning on an end table or warm cider simmering on the stove, can make a house feel more welcoming. Homeowners may not want to burn a wood fire in their fireplaces if they are not home, but simply staging some fire logs in front of the fireplace could still lend a cozy feeling to the home.

Many market reports show that sellers have fewer homes to compete with during the winter. This means that those who follow these tips for winter home selling are likely to make a sale despite there being inclement weather.

The rules governing mortgages are continuously changing, and it is important for anyone who is considering a new Home purchase to be aware of them. This year, FHA mortgage limit changes in 2014 top the list of new rules, and an overview of the changes are listed below.

Overview

The Federal Housing Administration sets loan limits based upon county. Beginning January 1, 2014, the maximum amount of a loan decreased in 652 counties nationwide, while subsequently increasing in 89 others. There are no FHA mortgage limit changes in 2014 in the remaining 2,493 counties across the country, and loans insured by either Fannie Mae or Freddie Mac will also not be affected.

Nationwide, the maximum FHA loan amount is now $625,500, as compared with $729,750 that the agency allowed in 2013. The amount allowed will depend on the cost of living in a given area. Previously, the FHA allowed loans that were up to 125% of the local area median Home Price, but the decrease now means that lenders can grant only 115% of that amount instead.

Unequally Affected

The decrease is affecting some counties across the country harder than others. The National Association of Realtors® reports that 146 counties have experienced a 20% or greater reduction in loan amounts. U.S. Finance Post states that buyers in cities such as San Francisco, Los Angeles or New York City are more likely to see FHA rates remain higher than those who live in rural areas.

Ann Arbor's historic Kerrytown District plays host to the 90-plus-year-old Ann Arbor Farmer's Market. This market is a year-round market featuring locally grown food, plants, hand-made crafts and freshly prepared food.

More than 160 vendors display and serve up an incredibly diverse assortment of producers and artisans. Ann Arbor’s local restaurants and stores have even started to shop the market themselves, forging mutually beneficial relationships and bringing fresh, local food to happy residents and visitors of this eclectic Michigan community.

Educational events, such as canning exhibitions and cooking demonstrations by local experts and an autumn harvest celebration for kids, provide food for thought and entertainment at the market.

The City of Ann Arbor's Parks and Recreation Department manages the market. A Public Market Advisory Commission, made up of market vendors, regular market customers and local community members, holds public meetings each month to discuss and debate market operations.

Address: 315 Detroit Street, Ann Arbor (directions)

Winter Hours: Sat. 8 a.m. - 3 p.m. January 4^th through April 26^th

Payment Options: Credit Cards, SNAP, WIC Vouchers

Web: a2gov.org/market; www.facebook.com/a2market; www.twitter.com/a2market

Contact: Sarah DeWitt 734.794.6255 - [email protected]

The rate of sales slowed in November as it has for the prior three months. It is still strong, but not as strong as this time last year. Inventories continue to fall as a result of an increasing number of listings that are expiring. New listings entering the market have been up for the past six months. Many of those are expired listings reentering the market, which are not enough to raise inventories. For buyers, there is still a significant shortage of available homes for sale with inventories remaining at 10-year lows. At the end of November, Southeast Michigan inventories dropped below 10,000 properties (this is compared to the peak of over 65,000 properties for sale in 2008). Values are up about 8% and new listings entering the market continue to rise. This shows that sellers are seeing some light at the end of the value tunnel and are putting their homes on the market at an increasing rate.

There are more than a few people predicting a flat to declining real estate year for 2014. Certainly with the possibility of tougher mortgage standards, rising interest rates, pent up demand having been released and a relatively flat economic growth, it is reasonable to predict a slow down. After all, we can’t expect to have record years every year (in terms of unit sales) and three years in a row is a pretty good run. We do think 2014 will not be as strong as 2013, but I am more optimistic than most, mainly because there is still quite a bit of Buying power left in the market. 

The housing affordability index is a good measure of that buying power. Historically, an index in the 120 range (the median family income can buy 120% of the median priced Home) is the good spot for a balanced and healthy housing market. In Michigan, we might move that range up to 140 since our values tend to be lower. We are still over 200 in Michigan, so there is still some buyer “slack” that will be capable of pushing up prices and creating multiple offers into 2014/15 (but not at the same pace as 2012/13). The chart below gives an example of what the index would look like given reasonable assumptions for the next few years.

If these assumptions hold, the market will settle to a balance around 2016. There is a positive wild card and that is household income. Income growth has been flat, which does not help home values. But as jobs grow and second income opportunities increase, this supercharges a household’s buying power. Although the median income may not be rising quickly, every job that creates a strong second income, also creates powerful homebuyers who can buy/outbid a significantly higher priced home.

A Short Spotlight on the City of Detroit: The city certainly suffered more than most in the downturn, but its rise has also led the way up. Since 2011, the median price has risen 89% and the average price 69%. Sales are still dominated by investors at the lower end of the market causing the median price to hover around $13,000. Looking behind those numbers we see some strong trends comparing 2013 to 2011. Sales of homes in excess of $40,000 have risen 20% and homes in excess of $100,000 have risen 61%. This shows that with more higher value sales, owners are moving in to replace investors. Midtown and Downtown have a housing shortage as well as key neighborhoods such as Rosedale, University, East English and many more.

As prices and interest rates rise, watch for some of the lower priced areas to heat up even more (Livonia, Redford, East Ferndale, Warren, Detroit, Taylor, Westland, etc.) as buyers move down in value, rather than leave the market altogether.

Thank you for your support in 2013. I look forward to working with you in 2014.

tom stachler, market, update, ann arbor, 2014, real estate, for sale, condos, homes, commercial, properties, listings, agent, broker, new, property, saline, michigan

Many prospective Home buyers, at one time or another, fall victim to the "kid-in-a-candy-store" mentality when they find the home of their dreams is available but happens to be priced just a little outside their price range. If you find yourself in this situation, there are some things to contemplate.

Sometimes financial stretches for buyers make sense. This is especially true when you consider that each additional thousand dollars on the overall Home Price equates to a mere $100 - $200 extra on the monthly mortgage payment.  Not only that, but Buying a nicer, larger home will often save you time and money in upgrades in the following years. This means that you can spend your years living in your home instead of working on it.

For a vast majority of people, the purchase of a new home is a long-term financial investment. So if you plan to be in the home for many years to come, then stretching financially may be a great buying strategy for you. 

However, everyone's financial situation is different and sometimes financial stretches for buyers are not a good idea.  For instance, if you are not planning on being in the home for more than 5 years, then you could lose a lot of money in the up and down cycles of the housing market. Also, if you do not have much job security for one reason or another, then you may not want to stretch to a more expensive home.

Financial stretches for buyers can be a calculated risk that pays off well over time. But if you’re a buyer with financial uncertainty, then you’re probably better off not pushing yourself to your financial limit. Talking with an experienced real estate agent is your best step for working out a buying strategy that works well for you.

As the 2013-14 NCAA men's basketball season tips off, the University of Michigan Wolverines find themselves in an enviable, albeit challenging, situation.

The team is coming off a season in which they:

• Finished the regular season with a record of 13-5
• Split the season series with two of their biggest rivals, Ohio State and Michigan State
• Earned their first Big Ten championship (sharing the honors with the Buckeyes and Spartans) in 27 years (1986)
• Made program history by opening with a 21-2 record
• Reached the NCAA tournament's prestigious Final Four (last accomplished in 1992-93)
• Gave Louisville a run for their money in the National Championship game, losing 82-76

So expectations are pretty high for head coach John Beilein's relatively young Wolverines' 2013-14 squad. And they will have to try and meet or even exceed those expectations without the services of point guard Trey Burke and shooting guard Tim Hardaway Jr., both of whom chose to seek fame and fortune on the NBA's hard court.

Look for Beilein to lean heavily on freshman point guard Derrick Walton Jr. and sophomore shooting guard, Nik Stauskas, to try and fill the Burke-Hardaway Jr. void.

Winterizing your Home is as crucial to your comfort and peace of mind over the long, cold months of the year as is winterizing your wardrobe for the change of seasons. You most likely don't wear the same clothes over the winter as you do during the spring, summer or fall. So, it would behoove you to treat your home as a second skin, so to speak, and cover it accordingly.

There are also a variety of practical, prudent and proactive reasons why home winterization is in your best interest, not the least of which is to reduce your heating costs, as well as save yourself from preventable property damage.

Here are some simple suggestions to prepare your home for Old Man Winter:

• Cover drafty baseboard cracks with caulk
• Make sure doors and windows seal tightly to prevent air leakage
• Install sweeps to exterior, basement and attic entries
• Cover edges of windows with weather-stripping tape
• Remove window-mounted air-conditioning units
• Check heating system and change the filter
• Insure water pipes are properly insulated
• Clear gutters of clogs to prevent water damage to shingles

And finally, while the addition of insulation to your attic and the underside of your home can be an expensive project, it can also be incredibly rewarding over the winter.

It doesn't take a Black Friday horde to tell you that the holidays are a busy time for merchandisers, retailers and shoppers. However, what you might not know about this festive time of year is that potential Home buyers who are looking now are serious about purchasing your home.

This is one of the reasons why you, as the seller, should be as flexible as you can during this time when it comes to showing your home. It stands to reason that the more flexible you are for showings, including short-notice appointments, the more chances you'll have of selling your home fast.

In addition, sellers show consider how many decorations are put up for this time of year. Decorations are nice and can make the home more inviting. However, too many decorations inside or outside the home can be distracting. Certainly be willing to garnish your home in holiday cheer, but it would be wise to keep it to a minimum.

On the other side of the coin, if you are a potential buyer searching for a home over the holidays, remember that sellers may not have the ability to be as flexible during these often hectic months due to travel plans, hosting commitments, or any number of other valid reasons. In a word, don’t be discouraged if a seller cannot accommodate a home showing on a moment’s notice.

Both buyers and sellers can capitalize on the increased sense of urgency that is typically ratcheted up over the holidays. This is especially true for homebuyers since the vast majority of each group would prefer to close on a home purchase or sale prior to the close of the year.

To best facilitate these transactions in a timely fashion, buyers and sellers alike would benefit from the knowledge and experience of a real estate agent.