Thumbs up for all the positive things about home sales in Detroit, Michigan suburbs that are not getting reported by the media!
It is true that home sales are at an all time low here in Canton, Plymouth, Northville, Livonia and pretty much all of southeastern Michigan. The media remind us of foreclosures, short sales, and the slowdown in home sales in general almost daily. The mantra is mind numbing, especially if you are a home buyer, seller, or in the real estate sales profession like Noel and I are.
I have always been taught to look on the positive side though and thought I would outline some of the reasons for optimism concerning the present state of affairs in the real estate market. I gathered these statistics concerning home sales in America. Remember these are for the country as a whole but we can expect to see similar results in our market. Also remember our home sale slowdown occurred a year or two prior to the rest of the country. This was due to the slowdown of the Michigan economy that the country did not experience. In fact the slowdown of home sales in the rest of the country is due mainly to the price bubble that occurred due to speculation and easy money as opposed to job losses for example.
The Reasons for Optimism:
During the 2005-2007 correction:
Median household income grew by 5%
> 4 Million jobs were created
> 2 Million Legal Immigrations (4 Million IRS I-10 status)
> U.S. Population grew by 5 Million people
> House prices fell, so affordability is up
> 3 Million Family formations
> Retiring boomers abated sales or purchases
> Pent up demand from the correction will work off the inventory
> U.S. population growth by another 5-7 Million people to a total of 315 Million by 2010
> 1 Million + Legal immigrants/year
> X Generation 30 Million
> Y Generation 70 Million
Estimates are that about 100 Million people are growing into home buying age; youngest 20+, oldest early 30’s. It’s estimated that only 5% own a home now.
By 2010, we will likely be in a balanced market. Enough inventory to meet demand; but not at the point where there are not enough listings.
Builders will start to replenish new home supplies as there will be a demand for 129 Million housing units vs. 127 Million now built.
> 30-year fixed-rate mortgages at 6% on average, they are down from 6.3% a year ago — lower rates mean buyers can afford more
> As a forward-looking factor, mortgage interest rates continue to hover just above the 40-year lows — there is mortgage money available at some of the lowest rates in history
> Excellent homes-for-sale selection, both new and resale
> Great value – homes priced to sell
> More affordable housing and lower monthly payments
> Owning a home offers good tax benefits
> Homes are still a great investment and are increasing in value in most markets
> Build incentives and promotions available
Yes there are reasons to celebrate in what seems to be a down market. Keep in mind these statistics are for the country as a whole but here in the Detroit market we are experiencing a significant increase in sales activity right now. Could it be that we may recover faster than the country as a whole? As I mentioned, we went into a slump at least a year or two ahead of the country. Maybe it’s our turn to lead the country out of this home sale slowdown.
Here’s more evidence of this. Our partner website for searching homes, www.bestmichiganhouses.com , has been registering record traffic. What’s more interesting is the people that have been coming to this site are coming back in record numbers on a daily basis. The return is probably because the site is so user friendly, but it also seems there is so much more interest in finding a home. People are requesting more from the site than they have in the past few months.
Now you may be asking yourself how to take advantage of the surge in home buying interest that is occurring. Our website www.thebittingerteam.com is designed to be a resource site for people interested in buying, selling, and investing in real estate. Although we do have information on our team and how we work, the main function of the site is to provide resources to you the consumer to help you understand all aspects of the real estate market.
Here is an example of how the site can help you. The two buzzwords you hear in the real estate market today are "Foreclosures" and "Short Sales".
The tab labeled "Foreclosure Help" takes you to pages that explain in detail how foreclosures work, how they are different in Michigan as opposed to the other states, online resources for further information, and a wealth of other pages that are being added to further your knowledge of the Foreclosure market.
Similarly the "Short Sale Help" tab takes you to pages concerning Short Sale FAQ’s, the effect short sales have on appraisals, helpful hints to see if you qualify for a short sale, and a host of additional information on the process and what it may mean to you as a buyer or seller.
There are lots of reasons to buy a house right now. With interest rates and house prices so low there is no reason to wait. If you currently own a home and it fulfills all your needs then the best advice is to stay where you are. If however you have been contemplating moving because the home no longer fits your needs, an upgrade to a house that does may make a lot of sense. While you may take a financial hit on your current house you could stand to make a windfall on a bargain you will buy to replace it.
If you would like advice on your situation don’t hesitate to call us at 734-459-2600. We can help you over the phone to decide which way is best for you and your family.