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

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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)

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Good News for West Michigan Real Estate Market as Distress Sale Numbers Continue to Plummet!

The demand for homes once again outpaced the amount of incoming inventory in West Michigan.  Current housing inventory levels hover around a four months supply.  Distress sales have also remained lower than in recent  years.  In fact, the numbers observed in distress sale activity are also a factor in the decreased inventory supply.  These trends are serving to stabilize the housing market which had witnessed a tremendous free fall in recent  years.

This is good news for the West Michigan real estate industry.  While we are not out of the woods yet, the general trends seem to indicate movement in a positive direction.  As we head into the fall months,  there is more evidence that 2012 may be the year in which the market turned for good.

Read this article for more information about Home Prices on the national level, plus data from the National Association of REALTORS.

*Distress sales data is obtained from the Grand Rapids Association of REALTORS.  The numbers are deemed reliable but not guaranteed.

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Yikes…We’re Running Out of Homes to Sell! Real Estate Inventory Levels Reach Record Lows in West Michigan.

A few short years ago, very few real estate agents could envision a time in which the over-riding trend would be a LACK of housing inventory in the the Greater Grand Rapids, MI area.  In January of 2009, distress sales peaked at over 60% of the volume of sales in the area and inventory was very high.  In fact, some buyers were simply tossing out low ball offers to see which one would stick on a home which the seller was desperate to sell.

That was then.  This is now.  Today, recently released sales statistics from the Grand Rapids Association of REALTORS indicate that inventory levels based on Pending Home Sales is down to 3.7 months supply.  Less than 4 months of housing inventory available for sale.  We are definitely in a Seller’s Market.  This is how the landscape looks to local real estate agents.

Rental Market:

If you’re trying to rent a home in West Michigan right now, you may have found out that its challenging.  In fact, just to get a list of home to RENT, you may be asked to pay a FEE of up to $20 to see what’s available.  A situation which few of us could have imagined in the recent past.  The local MLS set up a RENTAL MLS last year which provides listings for sale through local REALTORS.  Listings for Rent tend to cycle through very quickly, however the good news is that if you’re working with a REALTOR, you are not likely to be charged simply to get a list of what’s available for rent.  Feel free to contact us at 616-791-0511 if you need assistance in this area.

Average number of homes available for rent during the month of April on local MLS:  Range between 5-14 homes and condos.

Resale Market:

It’s no surprise given the low inventory levels that housing prices continue to rise.  Over the past 6 months, there has been an increase of 7.1% in home prices from $115,640 in 2011 to an average sales price of $123,849.  The price range with the most activity right now is the middle of the market defined as $100,000 – $160,000.  This is a marked change from the past few years when we saw a huge volume of sales activity in the price brackets below $50,000.  This is an indication that the move up market is coming back.  If you’ve been thinking about putting your home on the market, now may be a good time.

Total Number of Homes for Sale as of date of publication: 6,023

Inventory Level Based on Pending Sales Activity for April:  3.7 Months

Days of the Market

I can remember a time in the not so distant past where some agents were compiling listing agreements with a 2 year listing period.  That’s almost 10X longer than the marriage of one well know Kardashian.  In 2008 and 2009,  the average listing was taking almost a year to sell.  Today, the Average Days on the Market (DOM) is down to 78 days for Residential Properties and 50 days for Multi-family (1-4 unit) properties.  In the month of April alone, there has been an increase of over 20% in sales activity.

Wondering what this might mean for you?

If you’ve been toying with the idea of placing your home on the market, you may want to look at your options again.  To determine what your price point should be, contact us for a free market trends analysis for your area.  This article about setting the right price from the beginning of your home listing is also worth reading.

Photo Credit courtesy of cc license by erix on flickr.

Review raw data on April Housing Stats from the Grand Rapids Association of REALTORS

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2012 West Michigan Home Foreclosure and Housing Activity Analysis

The chart above details the level of foreclosure activity in various states across the country.  Michigan has moved out of the ‘Red Hot’ zone as conditions continue to stabilize and improve in the State.  But, to obtain a true picture of what is happening in West Michigan, you need to drill down into the numbers.

Statistics just released from the Grand Rapids Association of REALTORS today indicate some significant and encouraging trends emerging in the local market.  Housing is on the beginning of a rebound.  Are you ready to take advantage of this?

Here are some key points highlighted in the report from the Grand Rapids Association of REALTORS.

*The Average Home Sale Price jumped up 7.8% from $116,565 in March 2011 to $125,658 (March 2012)

*For an Year to Year comparison, the increase was more impressive - 9% increase from $112,453 in 2011 to $122,543 in 2012

*Distress Sales in West Michigan continue to trend downwards.  From a high of 62% several years ago, the number are now between 40-44%

*Inventory Available (based on Pending Sales) is 3.9 months.  (Refer to my blog post on the Meaning of this number for Home Sellers)

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Understanding the Difference Between Balanced, Buyers’ & Sellers’ Markets in Real Estate Lingo…

Spring has arrived early in West Michigan in more ways than one.  The Grand Rapids Association of REALTORS® released its’ February 2012 Statistical Report which indicates that based on PENDING SALES, there is only 4.5 months of Housing Inventory available.  That’s incredibly good news if you’ve been thinking about selling a home.  Have you wondered how to judge the status of the current real estate market?

Well, here’s a Short Primer about Inventory Levels which can be used as a Rule of Thumb to determine what’s happening in the Real Estate Market and provide some guidelines to assist in determining when to sell and what to ask your real estate agent.

BALANCED MARKET

A Balanced Real Estate Market (aka as a Transitional Market) refers to a market which has approximately 5-7 months of home inventory supply available.  You will often hear agents reference 6 months as the mid-point of a Balanced Market.  This level of economic activity reflects a time in which neither the Home Seller or Home Buyer is adversely impacted by supply and demand issues and the playing field can be considered somewhat level.  The reference to the transitional nature of this type of market is that the situation is more like a see-saw, which will eventually tip in favor of one side or the other. (Buyer vs Seller’s Market)

BUYERS’ MARKET

Should the see-saw mentioned previously flip to the right, Inventory levels would begin to rise precipitously above the 6-7 month level.  The rise in the supply of homes available means more competition on the market for Home Sellers who eventually will need to lower their prices or give more concessions to secure a sale.  In 2008, Inventory levels in West Michigan rose to approximately 14 months of supply overall in West Michigan due to the Housing Crisis and the increase in Distress Sales.  Buyers in the market place at the time sometimes secured homes at far less than 50% of their value in a Balanced Market.

SELLERS’ MARKET

When housing Inventory levels dip below 5 months Supply as they have in February 2012, the Market has clearly transitioned into a Sellers’ Market.  Based on Pending Sales, we would run out of homes to sell in less than 5 months!  Amazing, especially when you consider how long we’ve heard all sorts of harsh statistics about the demise of the housing industry.

SUMMARY

In closing, here is another number which you should know  to respond or react to today’s real estate market.

The average Pending Sale is approximately 15% HIGHER than this time last year at just under $126,000.

Picture courtesy of Joseph Turk Reit on flickr via Creative Commons license

Related articles

• Calculating The Cost of Selling Your Grand Rapids, MI Home…Things You Should Know (sellgrandrapidshomes.wordpress.com)

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Positive Home Equity For Many Homeowners…Is It Time to Sell Your West Michigan Home?

Realtors® servicing many segments of the greater Grand Rapids metropolis are reporting an interesting trend…not enough  housing inventory for the buyers they are taking out to purchase homes.  In fact, many listing agents are finding that they are entertaining MULTIPLE offers on some homes.  Earlier this year, one of our listings in Grand Rapids sold within two weeks and had several offers.

A recent report by Corelogic,  one of the nations leading real estate trends and research organizations reveals that at the end of the last quarter of 2011, over 77% of the homes in the United States were in a positive equity position.  The report also indicated that  11.1 Million homes (or 22.8 percent of mortgages) in the United States were in negative equity and an additional 2.5 Million borrowers had less than 5% equity in their homes (which is defined as near negative equity) thus bringing the total of mortgages with a deficit equity or near deficit equity position to approximately 27.8 %…a slight increase from the 27.1% in the previous quarter.

This means that the majority of homeowners in the United States have a positive equity in their homes.  For home sellers who have been pummeled with a continuous barrage of negative news, there is some hope on the horizon.  In West Michigan, we have had almost 12 months of improvement in the average housing price.  Inventory levels are currently below 5.2 months supply which is indicative of the beginnings of a Seller Market.  (Balanced market is defined as 6 months of inventory)  The chart above highlights the trend until the end of 2011.

Folks, the spring real estate market is here!  If you’ve been wanting to sell your Grand Rapids, Mi home, but didn’t think you could, it’s time to get a second opinion.  If you’re a part of the 30% of homeowners in the United States who don’t have ANY mortgage on their home, that fact alone may equate to some value when buyers are faced with the prospect of long drawn out negotiations with banks through the short sale deficiency process.

To determine if you may be time to Sell Your Grand Rapids, Mi home, consider the following:

1.  Do you own your home Free & Clear of any mortgage debt?

2.  Have you lived in your home for more than 10 years?

3.  Is your home free from any 2nd or 3rd party liens?

4.  Would you like to move into another home?

If you answered YES to one or more of these questions and you have been thinking about selling your West Michigan home but didn’t think you could afford to do so, please contact us for a confidential assessment of your home value in the current market.  In fact, we may even have buyers who are already working with Audu Real Estate for which YOUR home would be the perfect fit.  Don’t delay…Call us at 616-791-0511 today.

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Year End Report ~ How Did the Grand Rapids Real Estate Market Fare in 2011?

As the last embers of 2011 burn slowly into recent history, it’s always instructive to take a look back at where we’ve been with regards to the real estate market in the greater Grand Rapids metropolis.  The numbers released by the Grand Rapids Association of REALTORS® show improvements in a number of areas.  Here are some of the highlights:

1.  Inventory Levels reduce 25%

With over 20,000+ listings for 2010, the numbers are significantly lower at 15,000+ listings Year to Date for 2011.  There was a reduction in the number of foreclosure listings driven in part by some of the legal challenges that banks faced about foreclosure proceedings and the MERS ruling.

2.  Dollar Volume and Number of Homes Sold/Closed Increases!

There was a 3% increase in the number of homes sold in 2011 vs 2010 and a 6.1% increase in the dollar volume.  This trend seems to indicate a stabilization of the marketplace over the past twelve months.  If the overall economic situation with regards to jobs continues to improve even marginally, we can expect to see continued modest improvements in this area.

3.  Overall Average Home Sale Price increases 3% this Year.

With so much dire economic news, it’s sometimes difficult to hear the good news hidden within the chaos.  Home sale prices have increased in spite of the foreclosure and short sale transactions which are still very much a part of the real estate landscape.  This was accomplished within a context which included over 1400 homes that sold for less than $40,000.  The increase was fueled at least in part by 88 homes which have Sold/Closed so far above $500,000.

Click this link to view the raw data release courtesy of the Grand Rapids Association of REALTORS®

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Forecast Prediction of Lower Foreclosure Starts in West Michigan Proves Accurate!

A forecast report by CoreLogic released by the National Association of REALTORS for the Grand Rapids/West Michigan area at the end of August predicted a decline in foreclosure rates in the last half of the year.  So far, this prediction has held true.  As the charts below indicate, foreclosures have dropped in the Greater Grand Rapids area as a percentage of sales volume and the absolute numbers continue to hold steady with modest declines.

This is a good sign and indicator that the steady rise of home prices will continue as inventory levels remain low.  In a related survey, the National Association of REALTORS statistical survey also indicated a drop in  the 60 and 90 day delinquency rates.   Business Week magazine reported a Bloomberg study in which Michigan is said to be recovering from the recession at the second highest rate in the nation, second only to North Dakota where the boon in economic recovery has been fueled in part by the discovery of oil.

If you are currently considering selling your home and may need to sell your home by Short Sale to avoid Foreclosure proceedings, please contact us for a confidential interview to review the options which may be available for you.

*Data Sources:  National Association of REALTORS, Grand Rapids Association of REALTORS

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A Few Simple Tips to Improve Your Odds in Selling Your West Michigan Home!

Probably the biggest source of angst that home owners in Grand Rapids, Michigan have about selling their home is knowing IF their home has a chance for a Sale.  Quiet turmoil mounts with the following irksome thoughts. 

 Potential Sellers silently question, “Will this Home Sell?”  or “Will anyone even want to look at my home?” 

I’ve been hearing many reports of homes now sporting 12 month listing contracts instead of the traditional 6. The fact is that many homes in West Michigan are not having ANY showings at all!

To improve your odds of selling, it is important to understand that having a good Pricing Strategy is crucial to your success.  Last month, approximately 680 homes Closed successfully in Grand Rapids.  This was 25% below the number of successful property closing during the same 30 day period in 2009. However, there is good news; the good news is that there were homes that Sold and to be successful, it’s important to focus on what successful home sellers did correctly.

Researching you area…

The days of simply guessing about the price at which to list your home, or asking your neighbor what they Sold their home for are over.  The former is a dangerous strategy and the latter often provides inaccurate data.  It’s best to get the facts.

This can be done by requesting a Market Analysis from a good local Realtor® or obtaining an appraisal. One of the most valuable tools available through our Grand Rapids Association of Realtors® MLS system is the ability to obtain a quick analysis of your immediate area by utilizing a proprietary mapping function which details accurate records of homes Sold within a variety of radius options and also gives us access to trends data.

Utilizing mapping and trends data can provide insights which can be easily missed when using the broad ranges which generally divide areas on on popular sites like Zillow or Trulia for property search purposes.  In addition to mapping tools and trends data, pricing strategy is enhanced by understanding how property has traditionally appreciated or depreciated in a local area.  This is where the experience of a good real estate agent can be invaluable.

In today’s market where less than 10% of homes listed for Sale are Closing in any given month, it’s important to improve your odds by understanding the issues and specific dynamics in your neighborhood. If you’d like to know more about creating a pricing strategy for today’s challenging marketplace and you live in the Grand Rapids, MI area, please contact us. 616-791-0511 or info@auduhomes.com

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