Housing Recovery Underway in West Michigan – Grand Rapids, MI 2013

Breaking News!

A housing recovery is underway in West Michigan.  Although many in the real estate community have had their eyes glued to the numbers to monitor the trends for almost a year, the mounting evidence is now clearly evidenced.  In numbers released for January 2013, the Grand Rapids Association of REALTORS chronicles what many real estate professionals have experienced over the past year…there has been a significant shift for the better in the real estate market for West Michigan.

What do the Numbers say?

1.  A 10% increase in average Home Sales price from 2011 to 2012 highlights the improvement.  ($120,404 in 2011 vs. $132,676 in 2012)

2.  Inventory levels are way down.  2011 averaged only 4 months supply of inventory the entire year.  This was in stark contrast to 2008 when Inventory levels reached all time highs of 13.3 months of Supply.

3.  New Listings are also down dramatically by almost 40%.

5.  The average number of Current Listings dropped below 4,000 in 2012.  A huge decline from the high of 10,924 in 2007 and the lowest number of listing in the system since 2003.

What should you do?

Well, if you’re comfortable in your home and have a terrific interest rate, it is good to know that things are getting better and you can worry a little less about your home continuing to experience a precipitous decline in value.  If you haven’t refinanced, you might want to take a look at if this makes sense for you as interest rates are already starting to creep up a little.

If you have been wanting to move and didn’t think you could…assess again.  Give us a call at 616-791-0511 to have a FREE detailed analysis e-mailed to you with a potential listing range.  You might be pleasantly surprised to find out what your home value is today.   What’s the difference between our report and Zillow or Trulia?  Well, for starters, our data is gleaned from real estate professionals who are actually selling homes and closing transactions daily.  We live and work in West Michigan and know the market.  Our expert analysis is not just an algorithm of compiled data, but gives you the benefit of professional experience in our marketplace.

Don’t wait until everyone else figures out that NOW is a good time to sell.  Get a jump on the market place and make the most of the improved housing market.  Below is a graphic snapshot of the West Michigan market courtesy of data obtained from Grand Rapids Association of REALTORS MLS database.

Housing Recovery Underway in West Michigan – Grand Rapids Area

How to Save Money When Selling Your West Michigan Home…

Cold air…if you’re in West Michigan right now, it’s definitely on your mind.  You’re either enjoying it on a snowmobile or skis or trying to defend and protect against it by bundling up in winter clothing and making sure there are no insulation gaps allowing any drafts to enter your home.  When it comes to your home, we all know that cold air can be a thief…sending those utility heating and gas bills sky high when allowed to enter unhindered.

So, why is it that the same homeowners who will insulate and bundle up to protect against the elements invading the home seem ambivalent and sometimes down right ignorant about the prospect of allowing a litany of intruders steal their profits when it comes time to sell their West Michigan home?

Like cold air, these thieves will pick your pockets and the worst part of the problem is most people don’t seem to realize what’s happening – often losing thousands of dollars superstitiously.  Let’s take a look at some of the worst offenders.

1.  Putting your home on the market too early.

Real estate agents who show homes often run into home owners who are simply not ready to show their homes.  Yes, they have listed their homes and had the home advertised for sale on every conceivable medium, but when the call comes in from a ready, hot prospect…the home owner is simply not ready!  Unbelievable but true!

Agents have gotten accustomed to informing eager buyers that unfortunately, the home they wanted to look at and possibly buy is not available today.  And…then prepare to show another home.  It is impossible to calculate how much these missed opportunities have cost home owners who are simply not ready to market their homes.  As an agent, I would estimate that approximately 5-7% of homes we have sold were sold with just ONE showing.  What if our clients had not been ready?

2.  Leaving those small repair jobs for the next home owner…

It’s easy to fail to notice little things.  Especially when you’ve grown accustomed to these minor irritations and learned to ignore them.  You know, the little leak in the faucet, the scratches and dents, the worn out paint job, the grease stain on the carpet, the grimy cabinet doors, the little stain over the area which you patched when the roof leaked…

But, the issue with stuff like this is it almost NEVER looks ‘little’ to the potential buyer who is contemplating spending several thousands of dollars to purchase your home.  All these ‘little’ things begin to add up to BIG dollars.  After all, they’re not sure what else might turn up underneath the initial ‘little’ repair.  When buyers make offers, they will often deduct several multiples of the amount required to make the repair in the initial offer or ask for larger dollar amounts to repair it themselves.  In this way, homeowners unwittingly give away thousands of dollars for repairs which may have taken just a few dollars and some elbow grease.

Don’t allow ‘little’ repairs to shave off hundred or thousands of dollars from a potential offer.  Make your repairs before you place your home on the market and make sure your home is ready and poised to fetch the top dollar.

3.  Not understanding the Over-Pricing Penalty…

Yes, there is such a thing.  Several years ago, I saw some statistics about the cost of over-pricing a home in our West Michigan area. In data obtained from the Grand Rapids Association of REALTORS which tracked the impact of homes which were priced above the market and what they sold for compared to competitively priced homes, it was clear that not only did over-priced homes take longer to sell, on the average they sold for 15-20% less than they would have sold for had they been priced correctly to start with.  In fact, these homes on the average eventually sold for LESS than similar homes which were priced correctly for the market.

So, in this way, home owners lost hundred and sometimes thousands of dollars, not to talk about the waste of time and effort.  There is a penalty for over-pricing your home.  Avoid paying it.  If you suspect that you have made this mistake, make haste to remedy the situation.  Take an honest appraisal of your home.  If this proves to be difficult, ask a friend or colleague to give you their honest opinion.  Or perhaps, re-visit the recommendation of your real estate agent and then adjust your price downward immediately by at least 7% and hope that you are able to stop the slide.  This is one situation in which even a late adjustment can stop money from drifting out your door unhindered.

If you’d like to know about more ways to save money when selling your West Michigan home, please contact us.  (616-791-0511)  We can also advise on the current market value of your home.

Curve Ball #3 – When Buying a Home becomes a Competition!

While competition is a fact of life, you may not have been expecting to find yourself in one…or two or three bids competing to purchase the home of your dreams.

But, that’s precisely the situation that some West Michigan home buyers currently face as they strive to complete a successful bidding process in  a market which has significantly reduced inventory levels.

What’s going on you ask?  Wasn’t it just a few short years ago that housing inventory levels were 13 and 14 months supply?  Yes, that’s true.  That was then…this is now.

Today, inventory levels are  down below an average of 4.5 months for the past several months.  This restriction in available homes for sale has created some interesting bidding wars for unsuspecting buyers.  Read more about the current ‘SHIFT” in the market

What can you do if you find yourself competing for your next home purchase?  Here are some tips:

1.  Do your research.  

Have your REALTOR prepare a housing market comparison report for your area and neighborhood PRIOR to tendering an offer.

2.  Make sure your financing is set.

If you are paying CASH, have the ability to prove you have the money.  If you will be taking out a mortgage, get a full pre-approval with a lender from the Lender stating that you are able to qualify for the mortgage required on the home you are bidding on.

3.  Be prepared to move fast.

You may not be aware of how much interest a property is getting when you go through it.  If you are really interested in a home, have your REALTOR put you on alert to notify you of any changes in the terms, price or condition of sale.

4.  Know what your limits are.

Don’t allow the frenzy of the situation pull you off your market.  Set your personal limits while you have a cool head and can make an intelligent decision about what works for you.  Then stick with it.  I have always told my clients that if a home is for you…it will be yours.  And if it isn’t, there’s something better around the corner.

Over the years, I’ve had a lot of hugs for happy clients…many who missed out on their first deal and found a better one just around the corner!

Please contact us when you’re ready to move forward in the home search.

More reading on real estate curve ball tips:

*When you’re told you paid more than your home is worth.

Related articles

• 5 key things that happened in real estate in 2012 (theinmanteam.wordpress.com)
• Five Things Consumers Should Expect From The Housing Market In 2013 (forbes.com)
• “Embrace” these 10 tips about mortgages and refinancing in 2013 (embracehomeloans.wordpress.com)

The Power of Shift…2012 Real Estate in West Michigan Year End Review

A year ago today, my calendar indicates that there was a double showing on a brand new home listing.  Not that unusual in itself.  The home was a brick ranch in the north east side of the city.  Having listed the property within the past two weeks, the activity on the home was notable given the time of the year and the fact that it was an older home in need of updating.

We were receiving several requests for home pre-view showings every day.  And within a short period of time had multiple offers including a good cash offer.  In less than a month, the home was sold and closed!  This experience foreshadowed a shift which would become much more prominent in the real estate market in West Michigan during the 2012 calendar year.

Indeed, data obtained from the Grand Rapids Association of REALTORS revealed that home listings had plummeted dramatically from an average of over 8,000 homes for sale the previous year to just over 5,000 homes on the market at the end of 2011.  By February 2012, the falling inventory levels were having a significant impact on overall home prices as demonstrated in a 15% increase in the average home price from just over $105,000 to approximately $125,000.  This trend bode well for the remainder of the year.

In March, a notable first happened!  The inventory/months of supply level dropped below 4 months.  This was huge.  To give perspective, in what would be considered a normal/healthy real estate market, a six month supply would be considered a balanced market.  This would mean that neither Home Sellers or Home Buyers would be considered to have significant leverage in the market place.  An increase in  the supply side would give the potential home buyer an advantage while a decrease would be considered an advantage for the potential home seller.  So, when the inventory level dropped BELOW 4 months and stayed that way for pretty much the remainder of the year, this translated into a significant advantage for the informed and reasonable home seller.

You will note my caveat…informed and reasonable.  That being said, not every home Sold.  We entered into a weird period of transition with regards to home value appraisals.  As complaints from the real estate community reached crescendo levels due to the number of home sale transactions that were being flummoxed by low appraisals.  What was going on?

Well, appraisals are a vital part of the real estate transaction, especially when financing is involved.  A good appraisal protects the investment of the buyer and the lender in ensuring that the price paid for a home reflects the value of the home on the retail market.  The problem was that as housing prices continued to escalate from an average of $105,000 in the beginning of the year to over $140,000 by mid year, there was little historical record to provide proof that this sudden increase was indeed an appropriate indicator of reasonable value.

So, while the market was being driven by low supply and low interest rates, there was downward pressure on the retail of homes due to low appraisal values because appraisers were finding it difficult to document a sales history that supported the current reality.  Talk about interesting times!  We had the bizarre scenario of homes with multiple bids being sold only to be undone because the buyer was told that he had over-paid for a home that he had just competed to purchase.

In time, all these kinks will work themselves out.  But, that’s precisely why this blog post talks about ‘Shift’.  Things are shifting, not just in the real estate industry but in our world as a whole.  There has been a wholesale shift in the real estate market in West Michigan.  Those who ventured into the market and put their homes for sale in good condition at the recommended sales price by and large moved on to their future.  Distress sales of the Short Sale and Foreclosure variety declined as well.

Where are we now?  Well, there has been some tempering in home prices. Which does give some credence to the caution exercised by the appraisal industry especially in light of the recent economic crisis.  The average home price today in the West Michigan area is around $131,000, down from the highs during the summer.  Inventory levels however have continued to remain below the 4 month range which represents a keen opportunity for home sellers with an eye on 2013.

If you’d like to have a more comprehensive analysis of the homes for sale in your neighborhood, please give us a call.  616-791-0511.  Today, more than ever it is important to have a comprehensive perspective and strategy in executing a successful sale.  When you’re ready to think about buying or selling a home, contact us for a conversation about options.  We’re hear to make the process easier.

Oh…by the way, we’re getting a make-over!  In the late Spring of 2013, we plan on launching our new website.  We’re really excited about the re-design which will incorporate many of our marketing efforts into a more comprehensive package.  Wishing you all the best in the New Year from Audu Real Estate.

Raw data from the Grand Rapids Association of REALTORS monthly market updates can be obtained here.

Related articles

• Undervalued Appraisals Creating Problems (destin-30a-nicevillehomes.com)
• Today’s News: Pending Home Sales Rise Again (commercialappraiser.typepad.com)
• West Michigan housing sales returning to normal (mlive.com)

The Water’s Need to Flow…

Inspired message from one of my favorite authors…Margaret J. Wheatley.  Enjoy your weekend!

Sietsema Orchard and Cider Mill…A unique farm to table experience!

Readers of this blog know that I love to discover unique dining experiences.  For me, food is about the experience, the taste and the aesthetics.  When visiting a new restaurant, I love to hear the ‘back story’ and find out the inspiration behind the food.  So, when I had the opportunity recently to attend a ‘Farm to Table’ dinner at Sietsema Orchard in Ada (8540  2 Mile NE ), I was delighted to learn about another aspect of the growing organic and farm to table dining experience in the West Michigan.

Sietsema Orchard and Cider Mill used to be located off the East Beltline and Knapp.  In fact, I’d often pass the large white sign when I was heading north.  But since they sold mostly to the wholesale market,  I was not aware of their retail operation.  Over the past few years, they have moved their farm to Ada and added a unique twist on the retail aspect of the business.   Not only can you purchase cider and apples and donuts, the Orchard features creative programming which includes educational tours, and the Farm to Table dinners.

On the evening we attended, three different chefs featured items on the menu.  The mix was eclectic and creative  in the food and the chefs who prepared it.  Here’s the breakdown of our six course dinner:

1st~ The Silver Spork :Bourbon Chicken Liver Pate with Cranberry Gelee, Pickles, and Crostini
2nd~ Saburba:Cheddar & Apple Biscuits with Country Ham and Red Eye Gravy
3rd~ Soup- Silver Spork: Duo of Soups…. Broccoli & Phocus AND Spicy Cauliflower with Herb Croutons
4th~ Salad-Saburba: Grilled Radicchio with Apples, Bacon, Candied Walnuts, Smokey Bleu and a Honey Vinaigrette
5th~ Main Course- The Starving Artist: lamb shoulder, white and black sausages, jacob’s cattle beans, plum mostarda, fried sage leaves
6th~ Dessert- The Starving Artist : parfait of cardamom fromage blanc, milk chocolate mousse, palet d’baguette aux raisins, candied orange

During dinner, I had the opportunity to talk with Skip Sietsema, a third generation farmer who along with his son Andy Sietsema (also a fellow West Michigan REALTOR) run the orchard.  I was fascinated to learn of the vast number of types of apples which they grow which are not available in the regular supermarket.  In fact, North America has hundreds of different types of apples including unique heirloom varieties which according to Skip burst with flavor in a way that many people have never experienced.

I had a little taste of what he was talking about through sampling the cider served with the dinner.  We ended up taking some of it home with us…it was just that good!  The Orchard is open to the public during the fall season on Thursday& Friday (10:00 a.m. – 6:00 pm) and on Saturday from 9:00 a.m. – 6:00 pm.  You can also register for an upcoming Farm to Table dinner online.  Below is a video featuring Skip & Andy and Gerry Barnaby.

How to Get Free Money to Buy Your Grand Rapids Home for Christmas 2012!

Yes, you read that correctly!  There’s a program available to West Michigan Home Buyers which will give you FREE money (up to $3,000) to purchase your home.  This program will be available on December 3rd, 2012 from one of our Preferred Mortgage vendors.  There are several aspects of this program that are really terrific.

1.   This grant can be used in conjunction with any number of programs – FHA, FHA 203K, RD Guaranteed, VA, Conventional or MSHDA products

2.  Requirements:  Available to First Time Homebuyer purchasing a single family/one-unit primary residence.

3.  Purpose:  The purchase of a single family/one-unit, owner occupied, primary residence.

4.  Grant Requirements:  There is no lien and no repayment is required.  Minimum loan amount of $30,000

5.  Income limits:  None

6.  Military Benefits:  It supports military home buyers with a grant of $5,000.00 (Military includes Veteran, Active Duty, Reservists)

If you’ve been dreaming of Christmas in a new home, give us a call.  We’d love to see your dreams come true.