October Market Update

It’s a bit too early to announce a definitive trend, but, historically-the combined October and September sales have been a reasonable indicator of the upcoming year (in this case a post tax credit market). Although less than last year, unit sales still showed a reasonable pace (close to 2006 levels), with sales values holding steady since the spring, down about 40% from 05' peak values. It is still a Buyers Market at over 5 month supply; yet, the number of homes available for sale continues to shrink, helping move us towards stability (Yay!)



Nationally, both NAR (National Association of Realtors) and the Mortgage Bankers project an increase in the number of homes sold in 2011 over 2010 based on continued low interest rates, affordable home prices as well as an improving economy. They also say that values will continue to settle downward and bottom out next year. With that said, remember that real estate is local, not national.



The various markets across the country will recover at different rates. In general, the Midwest, including Michigan, seems to be faring better than the South and the West. However, we must be more cautious about growth in the number of sales next year, considering we had a 10% boost this year from the tax credits. Our data indicates most markets have shown a stable and even slightly rising value trend however, even in markets that continue to settle downward, it may not be significant enough for Buyers to delay purchasing, since any rise in interest rates will off set any savings from a potential price decline.



Also on the positive side, the latest Comerica economic activity report continues to move in the right direction since bottoming out in January of last year. Economic activity and hiring is slow, but it is still moving in the right direction.



With generally better news about the direction of the market in the past nine months, should Sellers be expecting the same in terms of rising values and offers? We are not quite there yet, however there is a growing pent up demand from buyers. In many cases, aggressively priced homes in good, updated condition are getting multiple offers and selling quickly. These homes represent less than 30% of the market and for the most part are priced below their competition. The rest are typically priced or "conditioned" out of the current Buyer demand.



Feel free to pass this information on to anyone that is interested in our current market conditions



As always, please contact me if you have any questions or would like to discuss your specific needs.



Thank you and have a fun-family-friend & memory-filled Thanksgiving!



Conne





Conne Terova
Team Terova
Real Estate One
Top Agent
(248) 318-7342
(248) 684-4595 Ext. 400
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SEPTEMBER MARKET REPORT

Hi there~

The September market continued to follow the same post tax credit pattern with continued falling available home inventories and a relatively strong sales pace. In terms of historical numbers, sales dropped compared to 2009, but remember 2009 was getting near peak tax credit activity, so even coming close is pretty good. The more relevant comparison is pre tax credit 2008, which we were ahead of. Available home inventories for the Metro Detroit market remain at a 3 year low, another good sign. The rest of the state has not yet seen the same declines but their inventories did not rise as high either. In general, the Southeast Michigan market is the healthiest in the state and one of the most active in the country. The rest of the state should follow, since most depend on SE Michigan to some degree.

Foreclosure moratoriums by many of the major banks have been the hottest industry news. In general, the major banks have found enough issues with their foreclosure process that they have stopped taking possession of homes and in many cases are taking their homes off the market. It is too early to tell if this is a 30-day or 6 month issue. Their action will further shrink the available housing inventory so it may have a short term positive market effect, but the reality is the sooner the bank inventories are moved through the market, the faster we will get to a permanent improving market.

With fewer bank owned homes on the market to compete with, the moratorium does offer a short-term opportunity for sellers to get a value boost (not so much appreciation, but a price a bit closer to typical asking prices) by putting their homes on the market now.

August 2010 Market Report

The combination of the lowest interest rates in 50 years and the lowest number of available homes in five years would normally indicate a strong Seller's Market. In our case, the third leg of the real estate stool, employment growth, is still wobbly enough to offset some of the value of the first two. However, in spite of the economy, Michigan looks to be one of the strongest real estate markets in the country.

Low home inventories, incredible pricing and a general feeling that we are moving off our low point are combining to keep the market moving. Our post tax credit sales have not fallen to the same degree as most of the country and surprisingly, thanks to record low interest rates, August sales rebounded ahead of last August (we were expecting a 10-15% decline). Northwest Michigan did show a decline, but less than expected (and our own numbers were up!). In some price segments (mainly under $100,000) there are enough cases of multiple offers to say for the first time in five years, we are setting a foundation for value appreciation.

Current tough lending and appraisals standards continue to be one of our biggest stumbling blocks towards a stronger appreciation foothold. Appraisers are being held back, still focused on a declining market as opposed to an appreciating or even neutral market view. However, like any cycle, those standards will eventually move back towards a reasonable range (we hope sooner than later). In many instances, buyers have had to make a larger down payment to bridge the gap between the sale price and appraised value. This is not necessarily a bad strategy for the buyer if there are multiple offers, since those offers indicate the true market demand fits the price.

As we said last month, this is the best time in the past three years for a Seller to put their home on the market (particularly under $200,000). The price you will receive may not be what you had hoped, but values have stabilized from their 1-2% per month decline. This perfect combination of low rates and low inventory may be temporary as both rates and inventories (pent up bank owned) will certainly rise. For Buyers, it is likely that both values and interest rates have bottomed out, meaning that waiting to buy will cost as oppose to save you money.

Certainly, we have a record number of Sellers who are not able to move because of value declines and/or mortgage balances and we are still working through a large backlog of financially distressed home sales. However, there are strong underlying factors that will push the real estate market upward, albeit slowly, regardless of the current economic issues. The first time buyer segment (Gen X and Y) is building up at a record pace, move up/out Sellers are also at record pent up demand levels (Baby Boomers looking to make their final moves). Most homeowners who have had to sell or lease as a result of financial stress can't wait to purchase a home the first chance they get. Sellers who are short on equity to move, are not short on their desire to move. All told, there is near record interest and demand for housing which will fuel steady housing growth as we move out of our recession.

Economic declines always hit harder than predicted and rebounds always happen faster. This rebound should be no different. It will not come roaring back, but for all the reasons stated above, the real estate market will rise faster than most have predicted. Below are a few economic indicators from the monthly Comerica Economic Brief. You can see in many areas, Michigan is clearly bouncing off the bottom.

Homes Under $100,000 in Value	Number of Homes Pending			Available Homes for Sale
Area	Aug. 09	Aug. 10	% Change	Aug. 09	Aug. 10	% Change
Oakland County	740	878	18.6%	3,588	2,650	-26.1%
Macomb County	719	912	26.8%	4,020	2,602	-35.3%
Livingston County	65	80	23.1%	290	222	-23.4%
Washtenaw County	79	75	-5.1%	383	392	2.3%
Wayne County ( - Detroit & G.P.)	636	760	19.5%	2,714	2,116	-22.0%
Detroit	795	789	-0.8%	4,606	3,357	-27.1%
Grosse Pointe(s)*	129	162	25.6%	915	514	-43.8%
Northwest Michigan**	72	68	-5.6%	4,378	4,199	-4.1%
Total	3,235	3,724	15.1%	20,894	16,052	-23.2%
	Median Sale Price			Ave Chance of Selling (in 30 days)
Area	Aug. 09	Aug. 10	% Change	Aug. 09	Aug. 10	% Change
Oakland County	$46,000	$48,750	6.0%	21%	33%	61%
Macomb County	$35,000	$34,900	-0.3%	18%	35%	96%
Livingston County	$60,500	$72,000	19.0%	22%	36%	61%
Washtenaw County	$50,000	$46,450	-7.1%	21%	19%	-7%
Wayne County ( - Detroit & G.P.)	$43,000	$46,100	7.2%	23%	36%	53%
Detroit	$7,500	$10,000	33.3%	17%	24%	36%
Grosse Pointe(s)*	$25,000	$27,500	10.0%	14%	32%	124%
Northwest Michigan**	$46,800	$50,750	8.4%	1.64%	1.62%	-2%
Total	33,145	36,165	9.1%	15%	23%	36%

Over $100,000 in Home Values	Number of Homes Pending			Available Homes for Sale
Area	August 09	August 10	% Change	August 09	August 10	% Change
Oakland County	878	1,017	15.8%	9,050	5,980	-33.9%
Macomb County	406	411	1.2%	4,132	2,262	-45.3%
Livingston County	144	173	20.1%	1,637	1,193	-27.1%
Washtenaw County	178	197	10.7%	1,804	1,391	-22.9%
Wayne County ( - Detroit & G.P.)	353	379	7.4%	2,913	1,806	-38.0%
Detroit	8	16	100.0%	428	273	-36.2%
Grosse Pointe(s)*	54	65	20.4%	783	467	-40.4%
Northwest Michigan**	147	141	-4.1%	5,036	4,822	-4.2%
Total	2,168	2,399	10.7%	25,783	18,194	-29.4%