Ed & Cindy Knight

When the media reports on the US real estate market, does the report accurately reflect your area? Does the media tell the Real Story?

Let's take a look at the Tale of 2 Condos.

Back in November of 2003 we purchased a 2 bedroom condo in Washington Township, MI. At the time the condos in the complex were selling between $120,000 - $125,000. However, since we purchased a HUD foreclosure we only paid $105,000.

Then a few months later in May of 2004 while on vacation in Florida, we found another HUD foreclosure in Lake Suzy, FL. This was also a 2 bedroom condo only we paid $57,000 for this one but at the time the condos were selling between $70,000 - 75,000.

Now mind you both condos were experiencing a minimal growth rate for several years and both units were comparable for the area. Then all Hell broke loose.

The condo in Washington started to increase in value and were selling between $125,000 - $127,000 at the peak. Then they started to drop in value. It's now worth much less due to the bank owned condos that have driven the market way down. As of today condos in this complex are selling for $55,000 - $65,000. Thanks to the banks.

Whereas the condo in Lake Suzy went way up and in 2005 we saw condos in our complex selling between $140,000 - $150,000 at it's peak. Then they too started dropping in price and are now selling between $70,000 - $80,000. Pretty much what they were selling for when we purchased it back in 2004.

The Florida market like many other states was a speculative market. It was driven way up and similar to musical chairs, the last one standing lost. However, we did not see this in Washington Township, Michigan.

Now to recap the Tale of 2 Condos - our Michigan condo has dropped back to what they were selling for in 1991 and the Florida condo to 2004 prices. Both states are listed as top foreclosure states. Here's a tour of these 2 condos.

Remember when the media reports the real estate market, what they tell us is NOT a true picture of the countries real estate market. It is an average or snap shot of several markets combined.

How's your market compare???

Every year we travel from Michigan to Florida via car so we see first hand the horrible conditions of Michigan roads. Yes, I know the snow and salt do damage. But why can't they just do it right the first time? Two words Government and job security.

Case in point - M-53 aka Van Dyke Freeway aka Christopher Columbus Freeway. When we moved out to Washington Township 11 years ago I remember orange barrels along M 53 and every year they seem to return to the same place. They close the road and resurface a few miles, then return the next year cut out bad sections, then return the next year to place asphalt in the holes they created by fixing the bad sections. Then we drive on a road that feels like we're on a rickety wood roller coaster. Can they for once get it right so we can have a nice road to drive on without seeing those dreaded orange barrels???

Well folks in case you missed it the Macomb County Road Commission has a $40 million dollar project that will begin in March of 2009. So be prepared to see orange barrels for about 9 months. MDOT plans to resurface 9 miles of M 53 from 18 Mile to 27 Mile with asphalt, add a new bridge and create two round abouts at 26 Mile and M53. Funds for the project will come mostly from the federal government, actually about 80%, and an additional 20% from the state of Michigan and a small amount from Sterling Heights.

But have no fear I'm sure they will return to the same strip of land next year for their job security. How do I know? Well Gov. John Enger's Build Michigan II has been fixing this same stretch of road since 2001 and it was supposed to provide a 10 year fix.

• $3.1 million for 28 Mile to 31 Mile
• $12 million for 18 Mile to 23 Mile
• $12 million for 23 Mile to 27 Mile

Do you know why the stimulus package includes so much money to repair the roads? They actually never repair them.

Being married to your business partner means you need to make business decisions with your spouse. Usually, this is not a problem since Ed and I have finally determined who does what best. EXCEPT when it comes to pricing homes. Ed is a numbers guy so he puts a ton of faith in what the numbers say. I on the other hand think that sometimes, no make that most times the numbers lie.

For the past 19 years we have worked together listing homes, I being the women would usually win the price war. It would go something like this - Ed would say "your home is worth X" and I would say "Z". Of course, my price was typically higher and based on the numbers. But I also took into account the curb appeal, the decor, the condition, the feel when I walked in the door, how clean the home was, if it was staged right ect ect.

Well this worked well until 2006. Up until then, I would say price it at Z, we would put the home on the market, start to market it and then if it did not sell I would say "I was wwwwwwrong". Boy I hate that word. Then we would reduce the price. This usually was not a problem because the market was going up. The sellers of course always agreed with me since they were getting more money and Ed would give my price about 2-3 weeks.

However, today when someone says "What's my home worth"? We have to try and beat the market down and that is not an easy task. Years ago we did not deal with rentals, bank owned homes or short sales in the comps, so that made our job much easier. Today I can not use the things I did in the past to raise the price. Those things may get you a faster sale but not more money. Also, today you must take into consideration who you are competing with in the market place.

Keep in mind your competition is no longer your next door neighbor, the couple from chuch or the Jimmy's parents from school. NO now it is a bank and they do not have feelings you do. They do not care what the house is worth - they just want it SOLD. The bank unlike you does not remember

• walking in the door after the honeymoon to your new home
• bringing little Johnny and Susie home from the hospital
• the family gatherings like birthdays, Christmas, graduations
• all the hours of sweat equity you put in the home
• the fact that you remodeled this that and the other thing
• they did not hear the laughs, see the tears or feel the losses
• nor do they know about the money you spent into making your house a HOME
• or the equity you may have lost

NO now your competition is an Entity. They do not bring with them feelings like you do. This is not their Home and when it comes to selling the house it will not effect the entity like it will you. The house they are selling is a bad asset and they will simply write it off at the end of the year. When an offer comes in it is presented to an asset manager, who is just doing his/her job, they usually live in another state and never even attend the closing.

They are not the same as you. So when you ask "What my home worth"? be sure to ask "Who's my competition"?

If you would have told me last December 31 st what was going to happen over the next 12 months, I would have thought you were crazy. But as I always say - "Everything happens for a reason" here's just a few things to prove my point.

• Last January 9th, while on vacation, we found out our new broker of 3 months was switching to another franchise. We didn't skip a beat and by February 1st we were opening our own real estate office. Some thought we were crazy with all that was going on in the housing market but we ended the year with a very nice office, 6 full time agents and our Best year ever. Everything happens for a reason.

• In July of 2008 the housing bubble took a turn for the worse, when Fannie Mae and Freddie Mac started to crash and burn. By September the U.S. government took both into conservator-ship. This was not good for America or the rest of the world. But perhaps now we will learn from our mistakes and keep a better eye on them. The bail out of Fannie and Freddie was a huge mess and one that could have been prevented. But Everything happens for a reason.
  

• On a positive note in early August Michael Phelps earned his eighth Olympic gold metal. Nothing is impossible," Phelps said. "With so many people saying it couldn't be done, all it takes is an imagination, and that's something I learned and something that helped me." Just 4 years earlier in Athens he won 6 gold metals. Everything happens for a reason.

• Last January we were telling folks we thought things would get better by Jan 2009. Several times we heard "foreclosures hit another high". However, even though many lost their homes to foreclosure - it was in a way kind of a cleansing. It needed to happen so that those that pushed themselves a bit to far could regroup and get to a better place financially. Everything happens for a reason.

• When we thought nothing else could go wrong. In September of 2008, Americans were faced with what is now known as the "Bailout" of the U.S. financial system. We needed to place our faith in our elected officials and hope that they were going to do the right thing for us. The sins of those on Wall Street, Americans bad spending habits and excess credit would now be brought out in the open. Everything happens for a reason.

• America started 2008 with many running for the highest office in the land. We ended with one man standing Barack Obama a bi-racial man that ran on "Change". Whether you like him or not he will be our president and we must all now stand together as a nation. He was young, fairly unknown but brought with him not only the black votes but many young and old white votes. Everything Happens for a reason.

• As 2008 came to an end we had yet another mountain to climb - it was the U. S Auto Makers. Detroit Michigan was hurting from not only the housing market but also job loses, from the slow down in sales of American built cars. They were now asking the government for an auto bailout. Maybe now the big 3 will make some much needed changes and get their act together. Everything happens for a reason.

Americans will say Goodbye to 2008 but will Emerge Stronger in 2009. We are fighters - we will look back at the many mistakes we made, learn, change and come out a stronger nation.

HAPPY NEW YEAR to America and all who read.

It's Friday and time to promote another local business and tell you about a Gift of Love from a Child to Heaven.

This past Tuesday I went to Glitz Salon to see my stylist Susan Wallace for my Christmas hair cut. As I sat waiting I noticed a young girl at the counter with a grown up hair cut. I said to her "Wow what a nice haircut and she turned and smiled". It was then that I noticed they were taking 3 cut pony tails and placing them in an envelope. The gal at the register said "We'll take care of this for you and make sure they receive them." They also told her she would receive a letter thanking her.

As she turned around her grandmother said to me "I brought in a little girl and I am walking out with a teenager". When they left I asked the gal at the front desk what was going on. She proceeded to tell me that the little girl was 12 years old and that last year her girlfriend died of cancer. So, since it was Christmas she wanted to have her long hair cut and sent to Locks of Love as a Christmas gift to her friend.

Well as you can imagine I was extremely touched by this young girl and what she had done. What a wonderful Gift of Love from a Child to Heaven. It touched me so much that I decided to not only promote Glitz Salons but also the organization that this young girl used.

Susan told me that the Glitz Salon will cut your hair for free if you are donating it to Locks of Love. So if you have long hair and have thought about getting it cut please remember this organization. For more information view this short video by Nexxus.

If you live in the Macomb or Oakland County area, you can find Glitz Salons in Rochester, Clarkston, Orion Twp and Lake Orion. Susan Wallace my stylist is a wonderful very experienced beautician. She is a Redken certified hair-colorist and worked for many years in New York. She currently works out of the Rochester Hills salon which is located at 1254 Walton Rd, Rochester Hills, MI 48307. For an appointment with Susan call 248-650-9300 and be sure to let her know I sent you.