Michigan Monthly Real Estate Market Report - November 2012 October was the most active new purchase month in the past two years, giving some great momentum going into the winter. With inventories at 10-year lows and buyer activity building, this should be a wild winter for Buyers chasing their perfect home. To give you a snapshot for the cause of inventory decline, over the past 90 days sales were up 22%. Meanwhile, the number of new listings placed on the market fell 6% compared to last year, which accelerated area appreciation rates. Appreciation Momentum is growing 2012 vs. 2011 % Change in Price per Square Foot - SE Michigan October 18.30% September 14.80% August 12.80% These growth rates are a combination of fewer lower-priced homes for sale and a growing rate of appreciation. Separating the two is not an exact science, however it appears that at least a third of the growth rate (or 6%+-) is a true value increase. Should I stay or should I go? A great song by The Clash, but with prices rising, also a good question for today's Sellers, "Sell now or wait?" Since housing is not just about the financial gain, the answer depends as much on your personal housing goals as timing the rate of appreciation. However, if you are looking to move up to a larger home, there is no doubt you should be looking now. The math is clearly in your favor! Should I Stay or Should I Go? Current Home Value $100,000 Value in 2 Years $118,000 Gain by Waiting $18,000 New Home Value Today $170,000 New Home Value in 2 Years $201,000 Gain by Buying Now $31,000 Loss by Waiting ($13,000) $31,000 - $18,000 Plus: Cost of extra interest ($18,000) 3.7% mortgage vs. 5.5 in 2 Years Total Cost of Waiting 2 Years ($31,000) per $100,000 of home value *assumes a 10 year holding period. For simplicity, does not consider closing costs or tax effects Right now, a first-time buyer has all the best pieces in their favor to buy. Rising rental rates, low home prices and low interest rates make a once in a lifetime combination. Those downsizing should consider the future interest rate increase, which makes a move today worthwhile. A 1% rise in interest rates will offset a 12% rise in appreciation. We anticipate strong appreciation over the next couple of years, but not 12%. Though, interest rates most certainly will rise 1-2% in the coming years. Anyone who is considering selling in the next few years should be making plans now, so they can test the market in 2013. In that vein, we have a great new market update video for you to use to get an overview of your local market area. It's only one-minute in length with great charts and a voiceover. Click this link to see how it works! Here's a free business plan creator to get you started!
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Friday, November 23, 2012
Michigan Monthly Real Estate Market Report - November 2012
Posted by Suzanne OBrien at 7:08 AM No comments:
Labels: 2012 Expert Advice, Business Plan, Detroit Area Home Sales, Michigan Realtors, Real Estate, Real Estate Coaching, Real estate news, Real Estate Trends, Realtor Training, Social Media Success
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