First Time Home Buyers Assistance

MSHDA (Michigan State Housing Development Authority) has officially kicked off the First TIme Home Buyers Assistance program here in Michigan.
$15 million has been allocated to assist first time homebuyer with purchasing a principle residence. First time homebuyers are defined as persons that have not owned a home as their principle residence for three years prior to the date of purchase. Non military homebuyers are eligible for grants up to $3,000 and active duty military and veterans are eligible for grants up to $5,000. Neither grant can exceed 25% of the purchase price. You can read more about it at the MSHDA web site where forms can also be found.
http://www.mich.gov/mshda

Greater Kalamazoo Area Real Estate Market

In the Greater Kalamazoo Area the real estate market is showing good signs. The average days on market are down to 75 days on average, and the sale price to list price is up to 96%! Those are signs that our market is doing well. I mentioned months ago about how it was a good time to buy. Well it is still a good time to buy and still a good time to sell, however, the other information states that there are 10% fewer homes for sale vs one year ago and the same number of homes selling. This directly effects the sale price to list price ratio and is a good indicator that we are moving towards a sellers market.  

Greater Kalamazoo Area 

A New Housing Boom Is Looming

NEW YORK (CNNMoney) -- The long-battered housing market is finally starting to get back on its feet. But some experts believe it could soon become another housing boom.

Signs of recovery have been evident in the recent pick ups in home prices, home sales and construction. Foreclosures are also down and the Federal Reserve has acted to push mortgage rates near record lows.

Barclays Capital put out a report recently forecasting that home prices, which fell by more than a third after the housing bubble burst in 2007, could be back to peak levels as soon as 2015.But while many economists believe this emerging housing recoverywill produce only slow and modest improvement in home prices, construction and jobs, others believe the rebound will be much stronger.

"In our view, the housing market had undergone a dramatic over-correction during the prior five years, resulting in pent-up demand for housing purchases that would spark a rapid rise in housing starts," said Stephen Kim, an analyst with Barclays, in a note to clients.

In addition to what Kim sees as a big rebound in building, he's bullish on home prices, expecting rises of 5% to 7.5% a year.

Construction is expected to be even stronger, with numerous experts forecasting home construction to grow by at least 20% a year for each of the next two years. Some believe building could be back near the pre-bubble average of about 1.5 million new homes a year by 2016, about double the 750,000 homes expected this year.

"We think the recovery is for real this time around," said Rick Palacios, senior analyst with John Burns Real Estate Consulting. "If you look across the U.S. economy right now, there are only a handful of industries looking at 20-30% growth over the next 4-5 years, and housing is one of those."

Home builder stocks are up 162% in the last 12 months, led by a 250% jump at PulteGroup (PHM). Other leading builders including DR Horton(DHI), Toll Brothers (TOL), KB Home (KBH) and Lennar (LEN)have all seen their stocks more than double over that time. New orders at publicly-traded builders are up 30% since January, according to Kim.

Palacios said stocks in other sectors, from manufacturers of drywall to flooring to kitchen and bath fixtures, have all more than doubled as well this year.

The housing rebound can have a ripple effect that could help get the entire economy growing at a much stronger pace, which will add to more demand for housing.

"That turn in the [housing] market is occurring now and it should become a boom by 2015. It will be powerful enough ... to lift the entire U.S. economy," said Roger Altman, chairman of Evercore Partners and former deputy Treasury secretary, in a column for the Financial Times.
Altman said he expects housing will add 4 million jobs to the economy over the next five years, as pent-up demand for home purchases drives building and and home prices higher. 

It Is Time To Buy.... Here Are 8 Signs That Housing Is On The Mend

8 Signs Housing Is on the Mend

DAILY REAL ESTATE NEWS | MONDAY, AUGUST 06, 2012

Some Americans are still jittery over the housing market, but here are eight positive signs that should quell some of their fears. 

1. Housing prices are on the rise across the country.
2. Foreclosures have slowed. Analysts suggest that as the supply of distressed homes slows, buyers will be forced into higher-price properties too.
3. Inventories of for-sale homes on the market are decreasing. In fact, inventories of for-sale homes have dropped 24 percent from a year ago.
4. Mortgage rates are at ultra record level lows, for those who can qualify
5. Housing starts rose 6.9 percent in June. Also, existing-home sales were up 4.5 percent higher in June compared to one year ago. 
6. Home building stocks are on the rise.
7. For investors who are buying homes, rents are soaring, allowing them to cash in on their investments. Rental prices are at a 10-year high as median units rent for $710 a month.
8. Home affordability is at record highs for the median income family, due to falling home values and super low mortgage rates. In fact, a recent study found that it is cheaper to buy a home than rent in basically ever major city in the U.S. For those who buy, you can save the cost of renting by owning the home for five years or less.

But while the signs point to a housing market on the mend, some Americans still remain hesitant. Many Americans are still underwater on their mortgage, owing more on their home than it is currently worth. Also, the economy continues to weigh on the recovery, particularly a dampening employment outlook, which analysts see as tied to housing. 

Still, The Wall Street Journal concludes in a recent article that if you take into account all the positive signs lately in the housing market, “housing presents an attractive long-term investment that should hold steady or even have upside surprise in the short term.”

The Nature of the Beast..... aka The Market?

I get asked this one question all the time. "How is the market?" There really is only one correct answer, that depends on what neighborhood you live in.

 At a recent open house the conversation went as such:
 "So Fred.... how is the market really doing?"
 "Well Steve, That's a good question, what neighborhood do you live in?"
" I live in Kalamazoo. So how is the market in Kalamazoo?"
 "That's to broad an area no one has an accurate enough answer for that. I need to know what neighborhood you live in to accurately answer that."
" I live in Winchell."
"Well.... I just ran a report for that neighborhood yesterday for someone. Your market is good. The average home sale price is around 150K which is roughly were it was in 2004."
"So that is good! Well then isn't it like that for all of Kalamazoo then?"
"No. As an example lets take Milwood. The average home price there is 70K. In 2004 it was 110K. So as you can see, that neighborhood doesn't have as strong of a market as yours. At it's peak Milwood was around 115K now it's 70K. Winchell was at 170K at the peak and today is 150K."
"I didn't realize it varied so much by neighborhood."
"Yes it does and it can vary drastically. Such as Arcadia. At it's peak it was 160K and today it is about 90K."

That is the nature of the beast. Markets vary by neighborhood and location has a lot to do with it.

The Open House Manifesto

   One thing I have learned, is that for every 30 open houses, you will get one client to work with. How did I come up with that number? Easy.... after 60 open houses, I had two clients that I had helped to buy properties. One came during the first 30, and the other during the second 30. I am on track to do 32 open houses from the start of July through the end of August, so if all holds true, I will have a new client from an open house by then. One of those clients, I met at an open house on a lake during the 12-1:30 time slot, and they came to the other lake open house for the 2:30-4 time slot. They wrote an offer right there and bought the second house.

   Some agents will have snacks out at the open houses. I have tried cookies and hershey kisses before. The cookies where a hit (thanks Kim), and the kisses left me a mess to clean up. Kids are great, but when they grab a dozen kisses and toss the wrappers throughout the house as they walk around, not so much. I don't put anything out right now but I am debating the matter still. I am working on a plan and I am trying to determine the best way to bring that plan together. You see, I want people to come to my open houses, and when they leave, I want them to talk about how great that open house was. Whether they like the house or want to buy the house or not, I want them to say "That Fred just hosted the best damn open house I have ever been to!" I want them talking about that open house with their friends, family and co-workers. That's right, on Monday morning when they get to work I want them to tell people about it, because it was that good.

   Regardless of what MSN has posted in their article section, an open house is in fact meant to help sell the house that is open. However, if 10 people show up, not all 10 will like the house or even be able to buy the house. They will still have a need or want to buy a house though. So an honest and sincere impression does help the agent. And you never know if one of those visitors has a friend or family member that may be looking for a home. They will often tell others about it and sometimes that is in fact a key ingredient that gets the house sold.

   I like doing open houses, but open house preparation is a LOT of work. It's not like you slap up a sign as you pull in the driveway and then hang out for a few hours reading a book. I have an entire eight hour day dedicated to open house prep, and it's called Thursday. I hold two open houses on Sunday, one Wednesday and sometimes one on Saturday. So every Thursday, for the upcoming three to four open houses, I create and print high quality quick facts flyers to hand out as quests enter the home, print out the MLS data sheets, sign up the open houses for the following Sunday then go place signs. I also stock my open house kit with sign in sheets, shoe covers and free magazines. The only time I think an open house sucks is when no one shows. Sometimes you only get one person, but that is better than none at all. When no one shows you feel like you just wasted a lot of time and money. Yes $$. Not just the gas to get there but the gas to put out the signs and the cost to print the flyers and other sheets. So when someone invites you to an open house, show up.
   I may be doing a couple of open houses that are four hours long and involve beer tasting. I am sure that will bring someone in to hang out with me for the day. Maybe that's how I will get to the point that I have the best, most talked about open houses in Southwest Michigan.

Widgets and Gadgets

I added some new widgets from Zillow to the sidebar. I am trying something for a few months with them for business, and so far it looks like it might be working, so check them out! ----->

As for gadgets, the iPad is an amazing tool. I may be a little biased since I am an all out Apple Junky, but hey, if all of your products work flawlessly together to form a solid unit of cohesion, why wouldn't that make you happy? I use the calendar on my iPad a LOT and it syncs with my MacBook, iPhone and Mac Mini, so that no matter where I am, my calendar is always up to date. I can create a flyer for a clients home on my iPad and edit it on my MacBook later if I need to.

One of the best things right now for a realtor is Zip Logix Zip Form 6 Digital Signature. So let's say I'm showing a house and a client wants to make an offer right now. I can pull out my iPad, log into Zip Logix, write up an offer and hand them the iPad where they can then use either a finger tip or stylus and sign it. Zip Logix then emails them a copy of the contract so that there is a record of it for them, and then I email it to the seller's agent. So the offer is in and no trees had to be cut down to do it!

I am currently using Keynote on the iPad to help with listing presentations too. It's like PowerPoint for Windows, but far easier to use and it really adds a little something to a presentation. It also gives a seller a good idea of how their home will be marketed across the world on the web. That's right... When I list a home, it isn't just marketed in the Southwest Michigan area, it's global. Someone looking to move to the area from Canada, Australia, Japan, England, Alaska or Seattle, can view the listing on one of the more than 1,100 web sites that it will be on.

Just go to Homes.com and search Kalamazoo, Portage or Scotts, Mi, and the first property or properties starting in the left corner are my listings. You might be wondering what this has to do with gadgets? Well, when I am doing a presentation, I can hand someone the iPad and they can search right then and there to see where their home will be in less than 48hrs.

It's hard to imagine what could be on the horizon that would make smart phones and tablets become obsolete, but surely there is something that we haven't dreamt of that will do so. I can hardly wait!

DETROIT!.....DETROIT is on fire!...Let the vacant houses burn!

A series of arson fires in Detroit is setting dozens of vacant buildings and homes ablaze. Firefighters, meanwhile, have a controversial proposal on the table: Let the vacant homes and buildings burn to help trim city costs, MSNBC.com reports.

“We are in no way looking to 'let the city' burn, this is about saving lives and money,” Donald Austin, Detroit’s executive fire commissioner, told WDIV-NBC in Detroit. “My department is strapped, the budget is strapped, and it’s time to look at a new way of doing things.” 

That new way, according to Austin, would mean allowing vacant buildings to burn that were more than 50 percent on fire and when they do not pose a risk to nearby structures.  The proposal still needs to win approval from city officials.

Proponents of the plan say the vacant buildings are going to be torn down eventually anyway, and argue that letting them burn will save costs. Critics, on the other hand, say the vacant homes shouldn’t be allowed to burn unless they are on a predetermined demolition list. 

Detroit has been plagued by vacant structures in recent years, with an estimated 80,000 vacant homes and buildings, according to a new documentary, titled “Burn,” about Detroit firefighters that includes the controversial new proposal. What’s more, the fire department says that 40 to 60 percent of the city’s fires are in vacant structures.

Arson fires in Detroit have increased dramatically over the last few years. In 2010, arson fires rose to 1,082 incidents, which is 636 more than a year prior, according to FBI data. 

According to the film “Burn,” filmmakers cite several reasons for the increase of arson fires on vacant structures, including arson for profit, home owners who are underwater, and fires caused from scrapping. Scrapping is when thieves strip vacant buildings of materials, such as metal piping. If gas line is left exposed, this can lead to a fire.  

Source: “Detroit May Let Abandoned Buildings Burn,” MSNBC.com (April 24, 2012)

Inventory of "For Sale" Homes Posts Big Drop

What does this mean? It means that there are fewer houses for sale which will in turn cause prices to rise. Less inventory + more buyers = sellers market.  


From the Daily Real Estate News 4/17/12  "The nationwide inventory of residential homes for-sale dropped 21 percent in March compared to a year ago, according to newly released housing data from Realtor.com, tracking 146 metro markets. 

In fact, all 146 markets posted a drop in their inventory, except for two — Hartford, Conn., and Philadelphia. 

The nationwide median list price in March also saw improvement, increasing more than 5 percent last month compared to last year at this time. 

The housing picture is much different than last year at this time, when inventory was up 26 percent and list prices were down 4.81 percent. 

“If the market continues to hold its own, 2012 could well mark the beginning of a broad-based housing recovery,” according to Realtor.com. "

Warren Buffet...."Housing Will Come Back...You Can Be Sure Of That"

This is an excerpt from Realtor Magazine in regards to Warren Buffets annual letter to shareholders.

Buffett: 'I'd Buy Up a Couple Hundred Thousand' Homes

02/29/2012

Warren Buffett, the billionaire investor and Berkshire Hathaway CEO, said on CNBC's "Squawk Box" recently that he'd "buy up a couple hundred thousand" single-family homes if it was practical. 

Buffett said that's because he believes purchasing a home with ultra-low mortgage rates and holding it for the long-term has become a better investment than stocks right now. 

"Housing will come back, you can be sure of that," Buffett wrote in his annual letter to shareholders recently.

7 Things You Need To Do To Prepare Your House For Selling

1.) Disassociate yourself from your home. For many home sellers this is easy to do but for others it is not. You need to look at your home like a product that you want to sell. Say goodbye to it and envision yourself handing over the keys to someone else.

2.) Organize and clean. Pare down clutter and pack up your least used items, such as large blenders and other kitchen tools, out-of-season clothes, toys, and exercise equipment. Store items off-site or in boxes neatly arranged in the garage or basement. Maybe even hire a professional cleaner to clean the house. You can get this done for under $300 and for as little as $75.

3.) Get replacement estimates. Do you have items that are worn our or will need to be replaced soon, such as your roof or carpeting? Get estimates on how much it would cost to replace them. The figures will be handy when negotiations begin.

4.) Find your warranties. Gather up the warranties, guarantees, and user manuals for the furnace, washer, dryer, dishwasher, refrigerator, stove, air conditioner, water softener, and anything else that may be staying with the home.

5.) Spruce up the curb appeal. Have a friend or family member stand outside your home. Ask them to critique your home as they approach the front door. What is their impression of the property? Do the lawn and bushes look neatly manicured? Is the address clearly visible? Are flowers or plants framing the entrance? Feedback from others may point out things you just don't notice. Especially if you do most of your entering from the garage.

6.) De-Personalize. Yes.....take those personal photos down off the wall and put them into a box. You want a potential buyer to be able to envision themselves living in this house. With your photos spread out all over the house it is hard for people to do that. Instead they tend to get distracted and wonder what the people living here are like.

7.) Remove favorite items. Window treatments, light fixtures and built in appliances all stay. It's in the "boiler plate" portion of the contract. So if you have an antique chandelier or perhaps a dishwasher that you can't live without. Remove them before listing and replace them with something else.

Cost vs. Value: Which Remodeling Projects Pay Off The Most?

 If you search you will find a multitude of lists with cost vs. value. In these lists you will see that there are a couple of small projects that get near full or better returns. Such as replacing an entry door or garage door. But this can be misleading as they are also pretty minimal in cost, averaging $2,000. Where the average mid range full kitchen remodel is $58,367.
So what mid range high dollar remodeling projects get the best return on your investment? Here is a list of the top 5 based on the national average.

#1 Minor Kitchen Remodel. Cost $21,450 rate of return 72.8%
#2 Replacement Windows. Cost $12,027 rate of return 72.4%
#3 Siding Replacement, (Vinyl) Cost $11,357 rate of return 72.4%
#4 Attic to Bedroom Conversion With Bathroom. Cost $51,428 rate of return 72.2%
#5 Basement Remodel to Finished Space. Cost $64,519 rate of return 70.0%

You are probably wondering where the bathroom remodel is. That would be $16,600 with a return of 64.1% and a bathroom addition is $40,700 with a return of 53.3% However......if you have a 3 bedroom home with only one full bath you may find that a bathroom addition will give you a little higher return. The best thing a bathroom addition will do is add salability and buyer appeal.

Dismantling DETROIT...or.....Exporting Detroit to China?

For Your Protection.... Get A Home Inspection

If you are buying a home in Michigan... there is no law that you have to get a home inspection. However, some agencies will require you to sign a waiver if you choose not to get one. Why? That's simple... To protect themselves.
So why should you pay $300 for something that is not required? That's simple.....To protect yourself.
The home inspector can find things that need to be repaired or replaced and this gives you leverage that your agent will use when negotiating the price.

Some of the things that the inspector should inspect are:
Roof, Exterior, Structure, Plumbing, Electrical, Heating/Fireplace, Air Conditioning, Insulation, Lot grading and the Interior.
Your agent will have a few home inspectors that he/she can refer you to. However.... you are ultimately responsible for selecting the inspector that you use.
The inspector works for YOU, not the seller.
You should ask for references when selecting an inspector.
You should be present during the inspection and ask questions.
 Do your homework and read about what to look for when doing a home inspection. That way when you are following along you will be better educated on what the inspector is looking at.
Ask your agent for a copy of the "Sellers Disclosure Statement" if you do not already have it. (which you should)
 Take note of anything that has been disclosed and give a copy to the inspector. Even if it states that an issue was repaired you should make sure the home inspector is aware that there was at onetime an issue. They should at least be able to verify that any issue was in fact repaired correctly.

5 Reasons Why South Portage Real Estate is HOT!

According to SWMRIC's cumulative data South Portage is a HOT location.

#1) Sales data for 1 month shows that houses sold went up 22.2% and for 1 year houses sold went up 29.4%

#2) Average days on market has gone down 21.7% from 1 year ago with the current average being 94 days.

#3) List price to sold price is up 3.2% from a year ago with the current average being 97%

#4) The graph below shows For Sale/Sold/Pended and as you can see the number of homes for sale is down while the number sold and pended are up from 1 year ago.

#5) Bloomberg published that Portage has seen an 11.6% rise in home values since 2009. However, in South Portage the average sold price is up 19.9% from 15 months ago.

So.....if you are in South Portage and are thinking of selling, for whatever reason, now is a good time.

(if graph does not load, it is because SWMRIC is doing a data update)

Keep in mind the numbers can change from month to month and the numbers here show that the market has trended up from the same time a year ago.