May 2012 Local Real Estate Market Update

After watching the market numbers over the past 12 months, a solid (positive) pattern has been set that appears to be spreading across the nation. The housing market, for all practical purposes, has shifted from a Buyers Market to a Sellers Market. In the five-county Southeast Michigan market, 84% of all sales are homes that have been on the market less than 90 days. These homes are well priced and in the best condition, but also only represent 30% of the homes for sale, which means 84% of all buyers are bunched together chasing 30% of the available listings. With a limited supply of desirable homes and increasing buyer demand, good things are starting to happen for sellers, the most important of which is appreciation. (The Northwest Michigan market is about 6-8 months behind SE Michigan so the inventory numbers are not as dramatic, but the same improving patterns are still evident.) The "average" market statistics hide the true strength of the current market. Overall, the average Months Supply of Inventory (MSI) is 4.1 months (for SE Michigan), but in reality, 84% of the market is operating with a MSI of 1.5 months while the rest of the market (70% of the homes for sale) is operating with a MSI of 18.5 months. The result is a strange world where 70% of all sellers complain about a slow market with few offers while 84% of all buyers complain about a wild market with no saleable homes to purchase. Both are correct! The reality is those 70% of the homes that are in the 18-month MSI "slow zone" are not really relevant to the market since they are not attracting much market attention. The chart below outlines the "true" MSI for the majority of the market as well as the hidden MSI for those homes that are not priced in a saleable range.

What does that mean for a buyer? It means over bidding on list prices, sight unseen offers, waiving appraisal contingencies and pricing wars above the asking price. Most importantly, it means make your best, strongest offer the first time since we are approaching 50% of all transactions with multiple offers. So buyers have two choices: jump in and play by the new rules of a Sellers Market – move fast, be aggressive and patient since you will most likely lose out on a few before you get one, or go after the other 70% of the listings that are sitting quietly and find that diamond in the rough. For sellers, throw your line in the water. Don't be crazy about the price. You might be surprised what the market will give you, but be prepared to be honest about the condition and features of your house. Buyers are willing to pay a larger premium for a home that is updated, without deferred maintenance, and with a design consistent with the neighborhood (i.e. points off for a contemporary in a Colonial neighborhood, etc.). It may be worth the time and money for some basic updates before putting your home on the market. April of 2011 was really the start of our heated up market, but even so we still showed growth over our previous year, which was strong, and buyer demand continues to grow.

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5 Habits of Highly Productive Real Estate Agents

5 Habits of Highly Productive Real Estate Agents Posted By susanne On May 6, 2012 @ 1:05 pm In Best Practices,Business Development,Coaching,Real Estate Training,Real Estate Trends | Comments Disabled [1]With so many distractions, it’s a wonder real estate agents are productive at all. Working to become a highly productive real estate agent is an ongoing process. Creating habits that produce consistent results allows you to achieve your maximum potential. Time management has always been a real challenge. Between phone calls, a barrage of emails, listing presentations, prospecting calls and buyers appointments, how do you stay productive? Keep yourself focused, alert and on track with these 5 Habits of Highly Productive Real Estate Agent’s Top Productivity Habits 1. Focus on Your Most Important Tasks The first part of every real estate agent’s day should be spent focused on the most important tasks. Why bother spending hours on time-consuming/low-payoff tasks when you could focus on tasks that actually generate income and produce results? Schedule time on your calendar and then list out everything you will work on. Once you’ve done that, number each item and work through your list. Complete what you can during your scheduled time without any interruptions or distractions. Rinse and repeat the next day. 2. Remove Distractions Between the phone, email, Internet, employees and all other “interruptions,” our day can quickly get away from us if we allow it. Turn it all off and stay focused on your task at hand. Do not allow for a quick vacation on Facebook or a stroll down memory lane with an old friend. Cut yourself off from all distractions, work down your list and take a break once complete. 3. Use Positive Affirmations Positive affirmations really do work! They can take a negative attitude and turn it around just be repeating a few constructive, upbeat words. Not familiar with how to use positive affirmations? Here is a tip: All affirmations should be repeated in the present tense. For example, “I am creating a clear path towards my destiny.” See what I mean? You are speaking as if it is happening right now, not in the past and not in the future. Pick a time of day that works best for you and then read them out loud each day. 4. Take a Cat Nap Grabbing a few zzz’s might seem like an odd productivity tip, but studies have shown that feeling refreshed after a nap can significantly improve concentration and performance. I wouldn’t suggest napping any longer than 30 minutes though or you will go from refreshed to groggy. 5. Set Daily Goals A day without goals is like setting out on a road trip without a map. Sure you’ll end up somewhere, but I’m doubtful it’s where you truly wanted to be. Wake up each morning with your goals outlined. These should be incorporated into your daily tasks. Setting your sites on a goal each day offers clarity and promotes a more sustained drive. Keep in mind that not every habit may be right for you. The most important part about creating habits is creating habits that stick. They will only stick if there’s ‘buy-in’ from you. Bonus! 6. Break out of the Norm Don’t be afraid to branch out and try something that makes you a little uncomfortable. Stepping outside of your comfort zone can be an amazing place that offers growth potential you never believed possible. Here's a free business plan creator to get you started!

If you don't remotely know how or where to begin with building or re-building your business, come work with us. We already have systems in place that do 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

4 ways to capitalize on shift to seller's market

4 ways to capitalize on shift to seller's market Some see signs of the next housing shortage By Bernice Ross Inman News® It's the spring selling season and good news is popping up like wildflowers in many places. The rocky bottom may be behind us with a new challenge ahead: a seller's market with higher prices and not enough inventory. "A seller's market? Are you serious?" the naysayers will say. "NAR just announced that prices declined again and that the current sales pace puts us on track for doing about 4.93 million home sales in 2012. That's less than the typical 5 million home sales that constitutes an average year." Signs of the next housing shortage? There's no question that many areas are still suffering from high unemployment and a glut of foreclosures. Nevertheless, there are rumblings on the lending side of the business about easing credit restrictions. This means more borrowers can qualify for loans. Increased demand will absorb the current glut of properties. This, in turn, will result in prices flattening and then beginning to inch up again. Pent-up demand is also growing. The 80 million members of Gen Y (born between 1977 and 1994) are in their prime time for starting careers, getting married and having babies. These major life milestones are usually tied to changes in housing, most often a move from being a renter to becoming a homeowner. Moreover, as inflation raises its ugly head again and the Federal Reserve ponders a third round of quantitative easing (QE3), investors are fleeing to tangible assets. While precious metals and commodities are certainly popular, real estate has almost always kept place with inflation over the long haul. Couple these facts with the tremendous decline in new housing starts and you have the formula for a housing shortage in the very near future. Reading the tea leaves What does this all mean for your business? First, it's important that you are tracking how many months of inventory are on the market in the areas and the price ranges in which you work. The rule of thumb is that if you have six or less months of inventory, you are either entering or are already in a seller's market. If there are seven or eight months of inventory, your market may be flat or transitioning. If you have nine or more months of inventory, you are still in a buyer's market with too much inventory. There are some important points to note here. First, sometimes you can have a seller's market and a buyer's market on the same street. For example, single-family homes under $250,000 may be selling well, but $180,000 condos are languishing with virtually no sales. Since most MLS systems supply this data, it's important to watch whether the number of months of inventory is increasing or decreasing. This will give you an idea about which way the market is trending. What's especially fascinating about the shift from a buyer's to a seller's market is how far the prices actually lag behind the shift. For example, inventories began to grow back in 2004 and 2005. Nevertheless, prices continued to increase in many areas well into 2007. You can expect to see the same thing now. Inventories are decreasing, multiple offers are occurring, and overall prices are still continuing to decline. The bottom of the market has already passed in terms of the demand, but hasn't shown up yet in terms of the price. Capitalize on the shifts What can you do to take advantage of this in your market? Here are four suggestions: 1. Fish where the fish are Determine where the activity is the greatest and where there is the least amount of listings. This is a prime area for prospecting for new listings. You can call on FSBOs (for-sale-by-owner listings), owners of expired listings, or hold open houses where you invite the neighbors. The idea is to increase your visibility in the area so that when someone is thinking about buying or selling a home, they will contact you. 2. Use print marketing to get the word out Many buyers have been waiting for the market to bottom out. You can use your print marketing materials including postcards, letters or newsletters to show people that the properties in their area have already bottomed out. A simple way to do this is with a graph that shows how many months of inventory were available over the last 12-24 months. Draw a line at six months. Your caption says, "When the inventory dips below six months, the market has already bottomed. Prices typically bottom out in the next 90 to 180 days after the inventory drops below six months. If you want to get the best price and the best financing, buy now." 3. Reach out through social media If you have a Facebook business page or if you use Twitter, link to any data from your board of REALTORS® or other resources that show the state of your local market. Remember to remind recipients that different price ranges may be experiencing different market conditions. 4. Show buyers it's cheaper to buy than rent A real shocker was recently released from Trulia showing that it is now cheaper to buy than rent in 98 of 100 large U.S. metro locations. Is a seller's market around the corner in your area? If the months of inventory have crossed the "six months" threshold, it's time to load up on your listing inventory as well as dust off those unused multiple-offer forms. Also, don't forget to prospect first-time buyers, because it's the best time to buy since the Great Depression. Here's a free business plan creator to get you started!

If you don't remotely know how or where to begin with building or re-building your business, come work with us. We already have systems in place that do 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

April 2012 Market Report

Dear All, As the market recovers, there will be fewer months where we beat the prior year. Such is the case with March 2012. In terms of new contracts written, numbers continued to show improvement over March of last year. Across all of our markets Closed Sales were down just a bit from last year. This is not a cause for concern (it would be if there were three months of decline). March 2011 was an unusually strong month, so it is not surprising that we did not top it this year. As the percentage of short sales grow, pending sales will outpace actual closings since there is a higher fall-through rate for short sales. The more significant number from this point forward is the average/median sale price, since much of the market gain will be in rising values. If available home inventories remain tight, in ensuing months we may even see a slight decline in the number of homes sold as we simply run out of homes to sell. That trend, however, should not last long because it will cause values to rise and more homes will be released to the market. In Southeast Michigan as well as both Southwest (Grand Rapids area) and Northwest (Grand Traverse) Michigan, the Months Supply of Inventory (MSI) hit another two-year low. (Southeast Michigan had the largest positive movement.) This is a very good thing because each month with a falling MSI moves us closer to a sustainable appreciation rate. For bank-owned, the MSI fell below 3 months, with non-bank at 4.8 months. Most of that fall was a result of an increase in contracts written in March. Available bank-owned inventories fell, but non-bank remained about the same. The rest of the nation appears to be joining us in the market upturn as well. Brokers across the country are reporting strong buyer demand and a lack of home inventories, similar to where we where in mid 2011. With the rest of the country joining our party, housing is beginning to move from an economic anchor to one of the key pieces fueling the recovery. For those looking to move, a common question is should I buy/sell now or wait for the market to improve a bit? The chart below shows the cost of waiting to buy versus buying this year in terms of total cost of ownership. The chart used the anticipated mortgage and appreciation rates over the next few years to project the cost of waiting to buy versus buying this year (2012).

*Chart assumes a seven-year holding period using the projected interest and appreciation rates on the chart By waiting, a buyer faces both a higher interest rate as well as a more expensive home to buy. Each year buyers wait costs them more (blue line) and reduces their future appreciation gain (green line). For many homeowners, their mortgage gap is too wide to sell; however, that gap is closing every month, so it is more important than ever for sellers to ask their Realtors to track values.

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If you don't remotely know how or where to begin with building or re-building your business, come work with us. We already have systems in place that do 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

How Do You Start Your Day?

How Do You Start Your Day? Posted By susanne On May 1, 2012 @ 2:47 pm In Best Practices,Business Development,Coaching,Marketing,Real Estate Technology,Real Estate Training,Today's Top Story [1]This is such a simple question yet it can have such profound results. Last week’s article, “Watch Your Mouth,” generated a lot of emails, Facebook messages and tweets. The majority of the messages were very positive and some of you were very honest. In fact, one person wrote, “I completely get the power that our words and thoughts have on our emotions, and in turn on our production level, but I just can’t seem to figure out how to stay consistent with being intentional with my thoughts and words no matter how hard I try.” Can anyone relate to this? The reader went on to write, “I will make it a point to stop and, as you put it, take every thought captive, but then once my day gets going all that goes out the window and I just start reacting, thinking and talking like I always have. This unfortunately leads me to the same emotional state that I have always been in and I just can’t seem to break the pattern! HELP!!” I want to thank this person for their honesty because I think that a lot of people find themselves in the same situation. Let’s face it: Sometimes when something is not working for you, it is not the tool that is the problem, it is the implementation of the tool that is flawed. Which gets me to my point: How do you start off your day each and every morning? It is a relatively simple question but can have so many answers. This was brought to my attention recently by someone from my Facebook group, “Don’t Be a Wantrepreneur.” The point of the group is to provide a place where people can be lifted up every day and made to feel good and push them towards whatever they are after in a world that is surrounded by so much negativity. This group member commented on how much she loves the group and how much she gets out of it every day, especially now because of something she was going through in her life and the struggles she was having professionally. Then she followed up with the question, “How do you do it? How do you stay motivated and keep your thoughts in check like you wrote about? It is so hard sometimes.” She referred to what I wrote in “Watch Your Mouth,” about how some days you wake up on the wrong side of the bed and lose half of your day because you don’t FEEL right, while other days you feel like you are ready to conquer the world and find yourself so much more productive. Without even thinking I looked back at her and told her that I am able to stay positive, motivated and ready for each day, not because I just think positive thoughts, but because I start each day the exact same way. When I am not on the road traveling or speaking I don’t schedule any phone calls or anything prior to a certain time. I drop my sons off at school and then the first half hour of every day is spent the exact same way – I pray, read and immerse myself in uplifting content. It is amazing the effect that this has on my state, on my thoughts and words and ultimately on my emotions. Haven’t you ever noticed when you are leaving an incredibly inspiring movie, at that moment, you are not thinking about bills, issues with other people or anything else? You are still lost in the emotion of the movie you just watched. If you don’t believe this I challenge you to go and watch any one of the “Rocky” movies and not want to get into a boxing match with somebody afterwards. Whatever you immerse yourself in will determine how you feel. It is impossible to spend a half hour every morning praying, reading about other people’s triumph over struggle and immersing myself with uplifting content and not leave that 30 minutes feeling energized and ready to go. I promise you if you invested this kind of time every morning you will find that you are more productive and more enjoyable to be around as well. You are working in an industry where people select who they want to work with and they have many options. If you want more clients it is as simple as having more people in your life that actually WANT you around because you make them feel a certain way. It all starts with you though. Have you asked yourself lately what you actually do to prepare yourself to be your client’s best option? Most people simply react to all of the emails, phone calls, text messages and Facebook messages they get and then wonder why they feel burnt out by the end of every day with nothing left to give back to themselves or their families. So I ask the question again—How do you start your day? This time in the morning to me is similar to a stop at the gas station for your car. Without it, I would find myself running on empty. Some of you reading this will come up with excuses of why you couldn’t possibly invest 30 minutes every morning because you are much too busy, but I firmly believe that we make time for the things that we value. I don’t know too many sales people that view their morning shower as an optional activity before they meet with clients because they “just don’t have the time to take a shower.” The truth is we wake up early enough to take a shower because to not do so would be ludicrous. I want you to start to associate the idea of not taking time to take control over your day as just as ludicrous as not keeping up with good hygiene. Both will have an effect on your business but only one will have an effect on your emotional state each day. Here's a free business plan creator to get you started!

If you don't remotely know how or where to begin with building or re-building your business, come work with us. We already have systems in place that do 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