Clarkston, MI

Southeastern Michigan Market Update

August followed the same trend as July and for the most part the past six months. We have seen a rising rate of sales in terms of the number of homes sold, a declining inventory of available homes, and a continued decline in home values. No new news there, except the news that the trend continues, which is a very good sign (except for the home value part, but that will begin to correct itself when inventories fall to 6-8 months). Add to that a more stable mortgage market with the bail out of Freddie and Fannie (and even a rate decline!) and you have all the ingredients for an acceleration in our recovery. Not anything earth shattering for us in Michigan, since job growth overshadows any other housing influencers, but still good news for all.

What does this good news mean for Buyers and Sellers?

For Sellers Price is still king and will be until our inventories fall from 12-18 months to 6-8 months. As we begin to move off bottom and see more good news trends one of our bigger challenges will be keeping Sellers expectations reasonable. It will be very easy for a Seller prematurely feel the good signs mean their home will sell for more. There is still a lot of market absorption left before that can happen. Although the number of homes sold should continue to rise for the balance of this year and next as well, home values will continue to fall so don't wait to sell, be aggressive, and price ahead of the market. The final option for Sellers would be to take your home off the market and wait until 2010 or beyond, when prices begin to rebound to better fit your target value needs.

For Buyers, The next three to four months will be a perfect storm of even lower interest rates and low prices. Rates should go up next year, negating any gain by waiting for lower values. If a buyer hesitates, waiting for a better price next year, they should consider moving forward with what they think will be next year's offer today. You would be amazed at what can be created in this market. Finally, it can never be said enough, when you are selling and buying in the same market, you can't loose. Your gain on the buy should always beat or at least equal the gain (or loss) on the Sale.

The Pearson Group, of Clarkston Michigan
The above summary is presented by Michigan's Largest Real Estate Broker

 This lakefront is beautiful on the inside. Take our tours and view the interior shots. Our seller has priced this very well considering there has been more than $100,000 in upgrades and improvements made since purchasing this home just a few years ago. Note the marble and hardwood flooring, soaring ceilings, extraordinary views and decking leading to the waters edge.

The home is located in Waterford, yet features Clarkston Schools. Great location for commuting and this home certainly meets the standard expected by lakefront enthusiasts.  Take time to view on-line tours and we'll look forward to meeting you at your private showing soon. 

The Pearson Group is long overdue to update those interested in what is happening to the Real Estate Market in North Oakland County, particularly in the Clarkston and Waterford Township area. Although we are posting the Market Absorption Study for both Clarkston and Waterford, we urge those interested in the the real estate market in North Oakland County, Michigan we invite to visit "The Pearson Group Website" and view the Monthly Absorption Rates for various townships.

View Clarkston Absortion Rate Graph View Waterford Absorption Rate Graph

This is an excellent time to buy in Clarkston, MI and Independence Township. The hugely large and fast appreciation of the 90's had to come to an end sometime. Prices have dropped over the past few years, but like the good times, this deflation in prices will be coming to an end, too. Since real estate is cyclical (feel a bit like the 80's except without the double digit interest rates?) the escalation of home prices will start to rise again. Making today's home purchase a great investment if you're willing to stay put until the good times come back.

Real estate is cyclic and right now we are on the down swing. In Orion Township, for example, the average sales price in 2007 was 6.7% lower than the average sales price in 2003. BUT, the average sales price in 2007 was still more than 6.3% more than in 2000. Oxford, MI shows similar stats. Unfortunately I didn't start keeping stats for Clarkston and Independence Township that far back.

Below is a summary of sales trends from 2005 to date for Independence Township and Clarkston, MI.

2005 - 401 sales - avg. sales price - $300,851 - median sales price - $275,000
2006 - 281 sales - avg. sales price - $299,863 - median sales price - $260,000
2007 - 325 sales - avg. sales price - $267,585 - median sales price - $230,000

In 2007 houses in Clarkston/Independence Twp. sold within 9.4% of the final average asking price and within 5.3% of the final median asking price.

The median sales price for the first quarter of 2008 was $190,000- down 20.7% from the median sales price in the first quarter of 2007 of $239,500. The good news is that the unit sales for the first quarter of 2008 were up 10.9% from the amount of sales in the first quarter of 2007.

The amount of foreclosures on the market have been, and will continue to, drive the sale prices down until the excess inventory is gone. As of 4/6/2008 there are 391 active listings in the MLS with an average asking price of $348,418 and a median price of $275,000. That's 66 more houses than sold in 2007, with more coming on the market every day and another waive of foreclosures expected to hit soon.

What do all these numbers mean? If you can afford to stay in your current home- STAY. Unless you are considering upgrading. If you are in the market to buy a house- your timing couldn't be better. The prices may go lower, but there's no guarantee. There are terrific bargains on the market now. Interest rates are still good. And FHA has raised the limits on what you can borrow, allowing for 3% down and possible zero down financing up to approximately $300,000 (depending on where you buy).

The above figures come from Realcomp MLS and backing out leases

It never ceases to amaze me as to how lazy and incompetentent most agents are. I showed a house for lease for $3,500 a month the prospective tenants were interested, and ask me to see if the seller/landlord would take $3,000. Now I have been around a long time and I know full well that verbal offers are not binding. None the less i called the listing agent and asked if she would call the seller and ask if they would be interested in leasing for $3,000 a month and all the other terms the seller wanted were fine with the prospective renter, so the only thing to negotiate is the monthly dollar. I asked if she would like me to put it in writing or if we could go verbal till we had a "meeting of the minds". Her response was the seller won't take that!! I asked if they had any prior offers that she could base her decision on? no. Well, will you call the seller and let them know you have an offer, I ask. She says I don't have to call them I just listed the property and I think they can get more. Do I have to put it in writing for you. Well she says, I'll call and advise him not to take the offer. I suggested she tell the seller what the offer was and let the seller determine if they should reject. Would any of you be suprised that the seller did not even counter. The prospective tenants moved on. Anybody think the listing agent swayed the seller. Had the seller countered even by $400 the renters would have accepted. but when the seller was not even willing to budge a little the renters felt the seller would be very difficult to deal with in the future. One other thing to consider is the utilities the seller is paying. They left copies of the bills out for people to see and with gas, water, electric, association dues, the total was a little over 400 a month.

Even if you leave the utilites out of the eqaution. the seller would have been taking $6,000 hit for the year and with market time for rents in the area is 4 months. You can bet I will be watching for when the listing expires.