This week I'll be holding a social media training event for the Water Wonderland Board of REALTORS. In preparation for my trip to Gaylord on Thursday, I asked some questions of the board AE Jeannie Rizzardi regarding what was going on in their market. I did this in part so I had a feel for the outlook and mindset of the members, and in part so that I could have some material for examples.
One of the items that came back in a response from Board President Cheryl Schlehuber was regarding the new Mackinac Straits Hospital and Health Care system in St. Ignace. Cheryl said: "We have a brand new Hospital and Health Care system with is the first of its kind in the nation, combining the previous county hospital with the Tribal health care. Opened on the north side of the city in May of this year."
This, to me, is a perfect topic for a community Real Estate blog post. People of all generations care about health care, and Boomers and Civic generations are increasingly making real estate purchase decisions based on the availability of quality health care. Not to mention job growth that comes with this type of new venture. So what would a post look like?
The new Mackinac Straits Hospital and Health Care system in St Ignace is now open! This first in the nation combination of our previous county hospital and Tribal health care is a welcome addition to our community. Not only do residents and visitors throughout the Straits area have access to state of the art medical facilities, but it should also add to our economic base with new employment opportunities.
The activity at the Hospital and Health Care System are contributing to a positive buzz about the area that includes redevelopment of some downtown waterfront property that should be a fabulous location.
On the real estate front, we're seeing a tremendous increase in business over the last six months. There seems to be a real increase in confidence regarding values of properties in the region. Home sales are actually up 38% year to date!
Realtors don't need to think of themselves as a blogger, but as a one man/one woman chamber of commerce. We're in the business of selling community. The best way to to that is to share the love- share what you love about your community, share what is happening, who is doing good things, your favorite events, tips and recommendations.
Share the love.
September proved to show a long anticipated increase in real estate activity in Northwest Michigan. Buyer activity has been trending upward after a lackluster summer season, and we're driving into the fall with a lot of offers being written and properties being put under contract.
The number of residential sales for September we up 31% over 2008- actually they were the best they've been in the past 4 years. This has been driven by the downward adjustment in sale prices. Buyers flocked to those listings where the prices had dropped in concert with the regional market trend. Median price as compared to the prior year was down about 11%, which is on par with year to date figures as well.
Overall, we've seen home prices decline just under 21% since their peak in 2005/2006.
Value leaders have been in the low and middle ranges- you'll see in the chart below a sharp increase in the number of sales under $40,000 (WHAT! A house in NW Michigan for under $40,000? Yep.) That trend is reflected up into the midrange, with gains up through the $180,000 range.
Where we've fallen off is at the higher end, made up primarily of waterfront/vacation homes. Many of these sellers are either insulated from the economic pressures of our current economy, or have just not come to terms with the effect that the overall market has had on their values. While waterfront properties have suffered much less exposure to price erosion, the lack of transactions indicate that the buyer population is waiting for adjustment to take action. There are some exclusive enclaves (such as Crystal Downs on Lake Michigan) where little if any depreciation is occurring, but what we've seen on other lakes is that only those properties that have made adjustment are selling.
We continue to have some very good values, but the best deals get picked off very quickly, and as inventory continues to tighten, we'll see increased competition for these listings. Multiple offers are already common, and by all indication this trend will continue.
I somewhat regularly post the best deals I come across in my Unreal Deals Blog. My latest find looked great on paper and I was excited to feature it:
“My newest UnReal Deal is all about the acreage.
Turns out on paper isn’t real life, and I should have toured it before I featured it. Yep, it’s got all those acres, and the house, and the barn, but the house is as bad as the agent let on in his comments. The deck has…let’s call it debris… an inch thick on it. The former owner sold all the top soil off of the land, and allowed contractors to dump old concrete and road construction debris out back.
Don’t take this to mean the agent was dishonest in describing the property. By no means did he sugar coat it, but by getting caught up in the specifications of the property, I rushed to judgement. This might still be an OK deal for the right buyer, but it’s not as UnReal as I had thought.
This is similar to the realization that many buyers face when looking at foreclosed properties- they compete on price alone. Condition and history are unknown. Nobody is loving them, keeping them feeling like a home. The good news for buyers is that more and more sellers are taking competitive stances on pricing, bringing well cared for homes into the mix with foreclosures.
If you’re in the market, don’t limit yourself by telling your agent you’re only interested in foreclosures. Just because the bank owns it, doesn’t mean it’s the best deal.
I handle REO (foreclosure) listings for several banks, including Bank of America and local banks, and the number of new listings incoming have dropped off dramatically recently. In conversation with others who handle these properties, and with local banks, this dip was often echoed. It’s likely that a foreclosure moratorium in place over the winter has delayed some properties coming onto the market.
A little background research revealed that the number of bank owned listings as a percentage of all new listings did indeed peak last winter, and has since dropped dramatically. While this has occurred, demand for good values in real estate have not abated- I’ve got a list of ready buyers, actively seeking good values (OK, some are waiting for a great value). Driven by value, bank owned properties have cleared from the market at a rapid pace.
Click this link if you'd like to see a chart of the trend on my outside blog.
I don’t expect the rate of new foreclosure listings to remain on a downward trend- there is a fair amount of consensus that we’ll see a new round of foreclosures coming on the market this fall, and some indications that these are trending toward mid-range homes , and some higher end homes, as opposed to the past tendency toward the very low end of the market.
What this information reveals for buyers is that when they’ve identified a good value, quick action and a solid offer are in order. Prices have adjusted, and affordability is high.
What it means for sellers is that you likely have a roughly 60 day window of opportunity to sell with far less competition from distressed sale pricing on bank owned listings. This is your opportunity to price your home right, have it clean, staged and “turn key” ready and to make it as appealing as possible to purchasers.
Reinforcing this opportunity are low mortgage rates and, most importantly, the $8000 home buyer tax credit, which is scheduled to expire in November, and is driving buyers into the market.
It's been a darn good week here in Benzie County. The sun finally found its way back to our little corner of the world and warmed things up some. Most of the golf courses are now open (I even got out to play once!) and most of the snow is gone. I've also heard that the steelhead fishing is great- Betty from Vacation Trailer Park on the Betsie River tipped me off this when I saw her at the Benzie Chamber Expo on Tuesday, and I noticed a similar report when I discovered a link toHonor Motel's Blog on Twitter. I also saw that the folks from Honor Motel did a nice job of pointing out the good values in Benzie County lakefront real estate.
I spotted smelt in Cold Creek, at tributary to Crystal Lake, last night. You can't dip smelt from inland lakes in Michigan, but that's a good indication that they'll be showing up in the Lake Michigan streams soon, assuming they decide to show up at all.
Since the fishing is good, it's nice to have a couple of listings on the river, and I've noticed a spike in inquiries on both the Homestead Resort on the River which I have listed for sale, and on my listing for a secluded retreat on the Betsie River which just got a healthy price reduction.
Speaking of price reductions, I was really pleased to have secured price adjustments on five of my listings this week. While it seems that real estate activity has ratcheted up another notch, most of the activity is still being driven by value/price. More on those values in an UnReal Dealspost soon.
Thanks to lots of hard work, I've stayed pretty busy all year, but it's at another level now, and I'm hearing that others are seeing the same trend. One agent I spoke with put deals together for 8 customers in the past two weeks, and I have two properties that received multiple offers this week. In other words, we had two buyers battling for one property. It's all good news, and combined with a downward trend in the number of new listings being placed on the market, we're working toward a healthier inventory level. Great mortgage rates and the $8000 first time buyer tax credit are helping out some too. It's a shame that the tax credit is limited to folks who haven't owned a home in the past three years though.
Tomorrow I'm off to Cadillac to give a presentation for the Paul Bunyan Board of REALTORS about the use of Social Networking by REALTORS, then back to the office for a 3:30 closing before heading back south to Kentwood, hauling the props for my oldest son's Odyssey of the Mind Competition. Whew! I can't imagine what it will be like when these kids hit high school!
If anyone hears any reports on Steelhead, smelt, or morel mushrooms, please post a comment. General information is find, no specifics necessary. I don't expect anyone to give up their favorite spot!
Associate Broker, GRI, MAR Director. Hard work, creativity and experience yield superior results. Serving Benzie, Manistee, Leelanau and Grand Traverse Counties in NW Lower Michigan.
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