It has been quite a while since the statement "things are remaining the same" was a good sign, but for metro real estate it is. Available home inventories continue to decline and the rate of sales are holding near the same annualized pace as last year, with the average price per square foot on the rise. There certainly is a chance of a double dip market decline, but with the current buyer activity levels and reduced inventories, that does not appear likely.
Saleable listings and discounted bank owned are getting multiple offers and selling quickly. With so much activity focused on those segments, the best opportunity for bargains are homes that have been sitting on the market. Many are actually priced within their saleable range, but in outdated or poor condition. Using FHA 203K loans, a buyer can find a diamond in the rough, get a loan to cover the repairs and get a home at a great price.
For buyers, with the most popular homes selling in days, it is important to understand the rules of the road when working with competing offers.
• Be ready to move quickly
• Be sure your buyers are pre-approved for their mortgage or have proof of funds on file
• It is now officially OK to offer above asking price for the right home - show them list to sale price ratios for other sales in the area so they don't have to take your word for it.
• Be ready to bridge the gap between your agreed upon price and the appraised value (because the next guy will if you don't)- we all know and understand that the appraised value will fall short of market value. Be sure your buyers know what to expect and that additional resources can make them a stronger competitor.
• Be sure to date and time stamp your various counter offers to ensure a backup offer does not slip in.
This average sale price trend chart shows that prices have for the most part stabilized. So for sellers, it is important to reinforce last month's suggestion that now is the best time to test the market if you are considering selling your home in the next 12-24 months.
Wayne/Oak/Mac/Liv Ave. Price per Square Foot
Value Range 2010 2011 % Change
$0-100,000 $34.40 $32.30 -6.10%
$100-500,000 $88.80 $90.80 2.25%
Over $500,000 $168.40 $169.30 0.53%
Washtenaw County Ave. Price per Square Foot
Value Range 2010 2011 % Change
$0-100,000 $37.60 $41.25 9.71%
$100-500,000 $111.70 $113.80 1.88%
Over $500,000 $181.00 $182.30 0.72%
Grand Traverse Area Ave. Price per Square Foot
Value Range 2010 2011 % Change
$0-100,000 $45.70 $43.60 -4.60%
$100-500,000 $102.10 $98.80 -3.23%
Over $500,000 $219.50 $215.40 -1.87%
I heard an interesting economic theory recently, that the combined buying power of all of the former and current homeowners who are no longer paying their mortgage is the hidden growth engine driving our economic recovery. That may be exaggerated, but I don't think too far from the truth. Over the next few years, as those former homeowners repair their credit, there will be a large wave of additional buyers re-entering the market.
In company news, we remain the most viewed broker website across the state according to the latest Hitwise report, giving sellers the best possible exposure among companies in Michigan. Also, the new features in our 1st to Know customer web portal are catching on as well. Sellers can follow up to five different markets, watching homes for sale, sold prices and market trends within each area. It is a great and quick way for both buyers and sellers to keep a pulse on their target market areas.
Here are our numbers for May, another very good month in buyer activity and transactions. Our web activity hit a milestone of over 200,000 unique visitors in a month!
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
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