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Property Values Rise in Metro Detroit

by The Jamey Kramer Group

Property Values Rise in Metro Detroit Has your home’s value risen?

Are you ready to move out of your current home and into your dream home?

There is more good news for Metro Detroit residents. Property values are on the rise! This means that if you are living in the Detroit metropolitan area, your home is now worth more than it was a year, 2 years, maybe even 5 years ago. The last time we have seen home prices like this was in the mid-1990s.

Home values are up 52% since the end of 2009 according to an article published by the Detroit News. Would you like to hear even more good news? Kurt Rankin, a bank economist from PNC, is forecasting more growth. He stated, “While it’s slowing, growth will remain in positive territory.”

Metro Detroit Cites Seeing Growth

Here are a few specific examples of Metro Detroit cities that are seeing a growth in property values in the last year:

  • Northville and Northville Township: In the city, there has been a 12% rise and in the township, an 8.7% rise in property values.
  • Novi and Novi Township: The city saw an 8.62% rise and the township saw an 8.84% rise in property values.

Shortage of Available Properties for Sale

With the value of homes rising, another interesting thing has happened. We are noticing a shortage in available properties for sale. It is a simple case of supply and demand. In this case, the supply of available houses on the market for sale is low, and it is driving home values up.

While many Michiganders are still unsure about the latest news reporting that home values are up, those who are putting their homes on the market are seeing a quick turnaround.

Why the Comeback?

In our article, 4 Reasons Why 2013 Had the Highest Home Sales Since 2006, we shared that all across America people are selling and purchasing homes. We talked about the 5 million previously owned homes that were sold last year alone.

One of the biggest reasons why homes are selling is that home prices have increased and homeowners that want to sell are no longer underwater in their mortgages. Other reasons include lower mortgage rates, less foreclosures and more employers hiring.

Is Your Once Perfect Home No Longer Suitable?

One of the most frustrating parts of the housing crisis is when people started to feel stuck in a house that no longer fit their family’s needs. They may have bought that house thinking it would be perfect, but then life happened and their once perfect home was no longer suitable.

If you live in the Metro Detroit area and have been dreaming about selling your current home and purchasing your dream home, please give our office a call. We would love to help you sell your home and find that perfect home that you have been dreaming of.

248-348-7200

 

4 Reasons Why 2013 Had the Highest Home Sales Since 2006

by The Jamey Kramer Group

4 Reasons Why 2013 Had the Highest Home Sales Since 2006

Is the housing crisis really over?

Why was 2013 such a great year for home sales?

2013 turned out to be a good year if you were hoping to sell your home. We haven’t seen numbers like this since the housing boom of 2006. There are a few reasons why the housing market made a rebound last year.

If you were wondering what some of those numbers were, the following will give us the answers:

  • 5 million previously owned homes were sold last year.
  • 9.2% more previously owned homes were sold in 2013 than in 2012.
  • 20% more previously owned homes were sold in 2013 than in 2011.

According to CNN Money,

The median price of a home sold in the year was $197,100, up 11.4% from the previous year.”

With so much good news, it may have you wondering why. Why was last year such a great year for the housing market? Today, we would like to share with you 4 reasons why 2013 had the highest home sales since 2006.

  1. Employment Is Up
    In November of last year, the U.S economy had already added 2.1 million jobs, according to CNN Money. Now, the recession isn’t quite over and the unemployment numbers are still too high. However, with more Americans being employed, more Americans felt comfortable enough to purchase a home.
     
  2. Mortgage Rates
    Towards the end of the year, we saw mortgage rates rise from the all time low that it had been at. This rise enticed many Americans to take the plunge, purchase their home, and take advantage of the low rates before they disappeared altogether.
     
  3. Home Prices Are Up
    One of the biggest obstacles that many Americans have faced over the last few years was that they owed more on their home than the home was worth. This is called being underwater with your mortgage.

    All over the country people are seeing the value of their home rise.

    In our article, Michigan Home Prices Are on the Rise, we shared the great news that home prices were making a comeback, and in fact many in the Detroit area had risen to where they were at in 2008.

    Not only that, but from October 2012 and October 2013 median home sale prices rose 42%.
     
  4. Foreclosure Crisis Coming To An End
    In Michigan, we saw foreclosures rates drop 37%. That was the lowest we have seen since December of 2005. In our article, Foreclosure Crisis Comes to an End, we covered if the crisis had really come to an end and why.

All of the above reasons make up the best year in home sales since 2006. Be encouraged, especially if you are looking to sell or purchase a home.

Why do you think 2013 was such a great year? Do you have a reason we didn’t list?

FHA Loans and Qualifications for First-Time Home Buyers

by The Jamey Kramer Group

FHA Loans and Qualifications

Are you a first time home buyer?

Is your credit score a little less than perfect?

If you have answered yes to any of the above questions, then this is an article you will want to read. FHA loans can be a great option for first-time home buyers because they don’t require a huge down payment. Today, we are going to share with you what a FHA loan is and how to qualify.

What is a FHA Loan?

FHA stands for Federal Housing Administration and is a mortgage loan that is insured by the federal government. This type of insurance allows the lender to have a lower risk if the borrower defaults on their payments because the loan is insured by the government.

FHA loans have been around since the 1930s. Here is what Zillow said about the history of the FHA program:

“The FHA program was created in response to the rash of foreclosures and defaults that happened in 1930s; to provide mortgage lenders with adequate insurance; and to help stimulate the housing market by making loans accessible and affordable. Nowadays, FHA loans are very popular, especially with first-time home buyers.”

First, let’s take a look at some advantages and disadvantages to getting a FHA loan instead of a traditional loan.

Advantages of FHA Loans

The advantages of FHA loans are easy to see and include:

  • FHA loans are often the easiest loan to qualify for.
  • FHA loans require only a 3.5% down payment.
  • You do not have to have stellar credit to qualify for FHA loans.
  • If you decide to sell the home, the buyer has the ability to assume your loan.

Disadvantages of FHA Loans

There are a few disadvantages to this type of loan. FHA loans require that you to have 2 different mortgage insurance premiums.

  • The upfront mortgage premium or MIP: Regardless of your credit score, you are required to buy 1.75% of your loan either upfront when you purchase the home or this can be rolled into your monthly payments.
  • Annual MIP: This is not a yearly charge, but rather a monthly charge that is figured into your mortgage payment. This charge is based on the loan-to-value ratios.

Qualifying Requirements of FHA Loans

Here is a list of a few of the qualifying requirements for an FHA Loan:

  • A two year history of steady employment.
  • A down payment of 3.5%.
  • The property must be approved by an FHA-approved appraiser.
  • The cost to own the home including the mortgage, HOA fees, property taxes and mortgage insurance must be below 31% of your gross income.
  • All of your debt including your mortgage, your credit card payments and your student loans must be below 43% of your gross income.

If a FHA loan sounds like a good option for you and you are interested in starting the home purchasing process, please make sure to give our office a call. We would be honored to help you find your new house.

 248-348-7200

Supply and Demand: The Inescapable Conundrum of Doing Business

by The Jamey Kramer Group

A central tenet of business looms large over the housing market in Michigan: supply and demand. Across America -- and in parts of Michigan -- as the U.S. economy slowly continues to improve, it is providing people with comparatively more money than they've had for several years. One noticeable result is that, in a growing number of places, there are more people who want to buy a home (a.k.a demand) against the supply of homes available to buy (a.k.a supply). This tends to drive home prices upwards. But each specific housing market is unique, and this is certainly true in Michigan. Fortunately, things are looking up in the  Metro Detroit area

Supply and Demand In a Nutshell… and What It Means in Michigan

When broken down to its bare essentials, the economic concept of supply and demand is an easy one: When demand goes up, prices rise, and if supplies are scarce, items are more expensive. Of course, this is the laboratory version of things, and things like housing markets are highly complex.

In product manufacturing, for suppliers of goods, creating goods is fairly straightforward. For example, if you are a manufacturer, you agree with suppliers on prices for the raw materials or components you need, you build the product and then attach a price to finished goods.

But demand is tricky to gauge. Sellers try to determine the number of buyers they expect for their product. They must make educated guesses because the variables on the buyer’s side are numerous and buyers can be fickle. When it comes to real estate there are simply many factors beyond the seller’s control, from tax policies to interest rates to the ever-fluctuating American economy as a whole. It's a moving target, and a lot of factors have to be considered. What's more, the past may not be the key to setting home price points -- after all, we live in challenging times.

When there is strong demand for housing, there is a tendency for the most attractive, move-in-ready properties to receive a disproportionately large number of bids compared to properties that are considered less attractive. This potentially drives up the prices of these high-demand homes, while the homes in lower demand often remain in indefinite limbo. According to data released by Realcomp, a Farmington Hills MLS and quoted in the Detroit Free Press, The inventory of homes for sale in metro Detroit dropped 16.7% in June to 19,433, contrasted with 23,315 in June 2011. Nearly half, or 45%, of sales in July were cash sales, and homes sold on average nine days faster, with 81 days on the market.

It appears that the upward trend is due to several interconnected factors including low interest rates, relatively lower prices on homes and American consumers' gradually increasing confidence in their local economy.
 
For evidence of the upturn in Michigan's real estate market, consider information from Farmington Hills multiple listing service, Realcomp. They reported that home sales rose more than 5 percent in metro Detroit compared to the same time frame a year ago. In fact, each of the counties in the Detroit metropolitan area – Macomb, Livingston, Oakland and Wayne – reported increased home sales in June 2012:
 
Macomb: 12.6% 
Livingston: 11%
Oakland: 0.8%
Wayne: 0.5%
 
This is good news and while the economy and the housing market face challenges, the data are showing improvement.
 
Still, in some parts of Michigan those with property for sale are still feeling the pinch even while demand creeps upwards. This is because, overall, home prices in the state have taken a big hit since 2000. For some sellers, home prices are still low enough that selling property without incurring a major financial loss is incredibly difficult. In short, supply and demand are exerting their influence, but the market is still recovering from a decade of tough times.

Overall, if the economy continues to improve, increasing demand will drive prices higher. Total recovery won’t come overnight, but the housing market continues to strengthen.

Displaying blog entries 11-14 of 14