Average Sales Price: $225,480

October saw an over 6.5% increase in the average sales price in Plymouth Michigan, compared to September. Comparing October 2011 to October 2010, the average sales price is up over 8.5%. Buyers have been jumping on new listings that have the right combination of quality and price. As our listing inventory has been low this year, it appears that well-priced, great quality homes in Plymouth simply do not last long on the market.

Average Sales Price to List Price Ratio: 91.8%

At 91.8% of list price, sellers gave up less than 9% of their original list price to sell their home in September. For buyers, this means that you could, on average, count on your ultimate sales price being about 9% less than the home’s original list price. Please note, that this ratio does not take into consideration any seller concessions to assist the buyer with closing costs and prepaid items.

Average Number of Days on Market: 76

We see that just about two and a half months was the average time for a home to have sold in Plymouth during the month of October.  The days on market were down 2 days from September’s average of 78 days on market. For sellers, you should plan accordingly: average price, average quality means an average of 76 days on the market.  Buyers, understand that if a home is drastically under the 76 days on market and has a great listing price, there are likely a bunch of other buyers taking note and getting ready to write offers.  Don’t use a short days on market metric as your ONLY reason to wait or jump on the home.  See the days on market as a piece of the larger picture, when making an offer to purchase.

Average Sales Price per Square Foot: $111

Another stat that I would take with a grain of salt, for buyers and sellers, is the sales price per square foot.  For buyers, I would suggest using this average as a way to determine a very rough estimate of what a [fill in the blank] square foot house would cost in Plymouth, Michigan.  For sellers, I would advise the same as a rough estimate for the sales price of your home. Why present the number if it should be taken with a grain of salt?  Simply put, the sales price per square foot is another stat that I would suggest you be aware of, but not use as the sole determining factor on buying or selling a home.  Taken together with the quality of the home, list price against the rest of the competing homes for sale, and location, average sales price per square foot could be a good indicator of the value or deal on a given home.

Average Sales Price: $211,596

September saw an over 19% decrease in the average sales price in Plymouth Michigan, compared to August. Comparing September 2011 to September 2010, the average sales price is down nearly 2%. Buyers have been jumping on new listings that have the right combination of quality and price. As our listing inventory is low this year, it appears that well-priced, great quality homes in Plymouth simply do not last long on the market.

Average Sales Price to List Price Ratio: 94.51%

At 94.5% of list price, sellers gave up less than 6% of their list price to sell their home in September. For buyers, this means that you could, on average, count on your ultimate sales price being about 6% less than the home’s original list price. Please note, that this ratio does not take into consideration any seller concessions to assist the buyer with closing costs and prepaid items.

Average Number of Days on Market: 78

We see that just about two and a half months was the average time for a home to have sold in Plymouth during the month of September.  The days on market were down 28 days from August’s average of 106 days on market. For sellers, you should plan accordingly: average price, average quality means an average of 78 days on the market.  Buyers, understand that if a home is drastically under the 78 days on market and has a great listing price, there are likely a bunch of other buyers taking note and getting ready to write offers.  Don’t use a short days on market metric as your ONLY reason to wait or jump on the home.  See the days on market as a piece of the larger picture, when making an offer to purchase.

Average Sales Price per Square Foot: $114

Another stat that I would take with a grain of salt, for buyers and sellers, is the sales price per square foot.  For buyers, I would suggest using this average as a way to determine a very rough estimate of what a [fill in the blank] square foot house would cost in Plymouth, Michigan.  For sellers, I would advise the same as a rough estimate for the sales price of your home. Why present the number if it should be taken with a grain of salt?  Simply put, the sales price per square foot is another stat that I would suggest you be aware of, but not use as the sole determining factor on buying or selling a home.  Taken together with the quality of the home, list price against the rest of the competing homes for sale, and location, average sales price per square foot could be a good indicator of the value or deal on a given home.

FHA (Federal Housing Administration) loan limits will be dropping on October 1, 2011. The FHA loan limit will be now be $271,050 in Oakland, Macomb, Washtenaw and Wayne counties.

Do you know how this will effect you as a real estate buyer? How will lowering FHA loan limits effect you as a real estate seller?

Background

FHA loans have been used by folks to purchase homes without having to put 5% or more down on the purchase of their home. In many instances, only 3.5% of the purchase price was needed in a downpayment. As you can imagine, this is an attractive loan option for those that either can not or do not want to place a huge down payment on a property they are purchasing. In some instances, an FHA loan is utilized along with a sizeable downpayment to secure financing on a home where a borrower may not have qualified for a conventional mortgage. Check out the Freep article on lowering FHA loan limits.

Real Estate Effects

If you are a buyer using an FHA loan, after October 1st, 2011, your loan limit will be $271,050. This means that the loan amount on a home you are purchasing needs to be equal too or less than $271,050 to qualify for an FHA loan with only 3.5% down. If you purchase a home higher than this limit with an FHA loan, you will need to bring more money in for your downpayment.

If you are a seller, this may mean that the pool of potential purchasers just shrunk. Especially if you have a home listed for sale in the $280,000 to $320,000 range.

Need help in navigating the wild world of mortgages? Check out First Commerce Financial and ask for Kirk or Ken.

[photo courtesy of buckyishungry]

While in some instances, all three of these conditions are true, they likely do not apply fully in our marketplace.

Huh?

National Housing Market

Nationally, the housing market looks a lot like a foggy day. When you wake up on a foggy day, all the sounds around you seem to be deadened, and far off. Yet, as the day progresses, light begins to get strongest on the horizon as the sun rises. The grey, damp blanket that descended on the city throughout the night is slowly burnt off as the sun gains altitude.

From the Financial Times, here is a report on the Homebuilders Association outlook for the housing market. Like a foggy day, it is bleak, with a few bright spots, namely the twelve marketplaces that are showing stronger housing numbers. Not too long ago, there were only a handful of markets bucking the negative housing trend.

Regional Housing Market

The metro Detroit housing market appears to be one of those brightening patches in the foggy morning. In early 2009 I wrote an article that called the Michigan real estate market the “canary in the coal mine” for the rest of the nation’s real estate market. Our state’s real estate market has been closely tied with the automotive industry. As the automotive industry stumbled and nearly collapsed, the state’s housing market followed suit. Now, the automotive industry has, roughly, stabilized and we are beginning to see signs of life in the housing market. Just review this article from the the Detroit News highlighting the local real estate board’s sales numbers.

Plymouth Housing Market

The Plymouth housing market could be considered one of the rare bright spots on that foggy day. We’ve been tracking the Plymouth housing market for some time now.

Looking at year-to-date sold homes in Plymouth, we’ve already seen a nearly 13% increase in the number of homes sold, compared to the same time last year. Interestingly, the sales price has fallen a little over 1%. It is my contention that this price decrease, as minimal as it is, is due to distressed (foreclosure & short sale) home sales.

If we compare 2009 year-to-date numbers to 2011, the numbers look even more promising: number of home sales is up over 14% and sales prices are up nearly 6.5%.

Crazy Train Anyone?

What are you seeing in this real estate market?

All of these factors can lead one to believe it is a great time to jump into home ownership. Perhaps, for you, this is the right time. In fact, I am happy to chat with you about just this topic.

This post, however, is going to focus on those folks that have made the decision and are committed to purchasing a home. Or, actually, the fact that you may WANT TO BE committed after purchasing a home…

THE LIST

Click Image to Enlarge...

Ok. I realize that just dropping that image of an underwriter’s requirement sheet can be obnoxious or even a little disconcerting. But do you see the flaming hoops that you are about to encounter on your way to closing?

This is NOT to discourage you on your march to owning a home. Rather, I believe all buyers should have a good idea about what you are about to embark upon. The housing crunch has been well documented. As the pendulum has swung from “free & easy lending” to, seemingly, restrictive lending, many question whether lenders have become too restrictive.

As a real estate agent, it is difficult to convey to brand new, first-time homebuyers that the adventure they are about to embark upon is beset with all kinds of new, stickier and trickier issues to address to get to the closing table. Folks that have purchased a home previously seem to understand that there is a bit of an examination process, but are also shocked at how “invasive” the underwriting process can be.

Case in point…

The underwriter’s guideline checklist above is for an actual buyer.

Yes. That is the actual checklist our friends at First Commerce Financial used in getting an actual client to the closing table. Obviously, we have changed the names to protect the innocent. If you are counting along, those are twenty nine conditions that the underwriter requested the buyer satisfy on their way to mortgage approval.

This particular buyer, it appears, was not as expeditious or thorough in their documenting of their income and expenses for First Commerce, hence the number of conditions required by the underwriter. So those are twenty nine separate requests for the buyer to supply more information so the bank can lend them money to purchase a home.

But I Have It All

Even when a buyer is thorough and has all the documentation at the first meeting with their lender, there are still occasions where the underwriter will kick out a condition that feels as though it is coming out of left field! Again, our friends at First Commerce Financial cover this one:

Kirk and Ken’s example is a simple cross-section of what you could experience on your march to purchase your home. The important things to keep in mind are:

• Patience
• Communication

Average Sales Price: $264,464

August saw an over 3% decrease in the average sales price in Plymouth Michigan, compared to July. Comparing August 2011 to August 2010, the average sales price is up nearly 17%. Buyers have been jumping on new listings that have the right combination of quality and price. As our listing inventory is low this year, it appears that well-priced, great quality homes in Plymouth simply do not last long on the market.

Average Sales Price to List Price Ratio: 93.06%

Hovering just at 93% of list price, sellers gave up less than 7% of their list price to sell their home in August. For buyers, this means that you could, on average, count on your ultimate sales price being about 7% less than the home’s original list price. Please note, that this ratio does not take into consideration any seller concessions to assist the buyer with closing costs and prepaid items.

Average Number of Days on Market: 106

We see that just a little over three months was the average time for a home to have sold in Plymouth during the month of August.  The days on market were up 44 days from July’s average of 62 days on market. For sellers, you should plan accordingly: average price, average quality means an average of 106 days on the market.  Buyers, understand that if a home is drastically under the 106 days on market and has a great listing price, there are likely a bunch of other buyers taking note and getting ready to write offers.  Don’t use a short days on market metric as your ONLY reason to wait or jump on the home.  See the days on market as a piece of the larger picture, when making an offer to purchase.

Average Sales Price per Square Foot: $112

Another stat that I would take with a grain of salt, for buyers and sellers, is the sales price per square foot.  For buyers, I would suggest using this average as a way to determine a very rough estimate of what a [fill in the blank] square foot house would cost in Plymouth, Michigan.  For sellers, I would advise the same as a rough estimate for the sales price of your home. Why present the number if it should be taken with a grain of salt?  Simply put, the sales price per square foot is another stat that I would suggest you be aware of, but not use as the sole determining factor on buying or selling a home.  Taken together with the quality of the home, list price against the rest of the competing homes for sale, and location, average sales price per square foot could be a good indicator of the value or deal on a given home.

Paralysis of Analysis

At what point do we have enough information to make an “informed” decision? I have heard it said, and believe, that there has yet to be a decision made with 100% of the pertinent information revealed. Throughout our life, while learning to make decisions, we gain a level of comfort with the lack of informational detail.

What if we had an overabundance of information or choices in front of us? What if we are like dear Tom above, faced with so much information in flux that we become paralyzed?

Why More Is Less

“Paradox of Expanded Choice” is not only the title of a book by Barry Schwartz, it is also a pretty cool statement that encapsulates the frozen decision cycle. The article at Fast Company on Why More Is Less does a great job of summarizing the paradox and how it applies to consumers in general.

In real estate, I will never argue for less information for the consumer. I will make the distinction between information for information’s sake and good real estate information, however.

Good Cholesterol vs Bad Cholesterol

Oddly, we need cholesterol in our bodies, we simply need the right kind of cholesterol. The same holds true in our data diets; especially within the real estate realm. While decent resources and fine indicators, I would label sites like Zillow and Trulia bad sources of the freshest real estate data. Even Realtor.com is suspect.

Yet these three online resources are the top three sites referenced by folks like Tom. They spend hours pouring over “new” listings and data that come directly off these sites. And while the information provided by these services is free and relatively accurate, it is not the “good data” that a real estate consumer needs to make the most informed decision.

Too Many Choices a Bad Thing?

On the surface, having a lot of choices from which to make a decision appears to be a great proposition. However, as the article points out, many choices can actually be demotivating for the purchaser. To go back to our example buyer, Tom.

He has at least four different sources of real estate information flowing directly into his decision making pattern; Zillow, Trulia, Realtor.com and the daily updated listings that I am sending him. From Tom’s perspective, he is getting all of the real estate information about the Plymouth marketplace. Receiving all of the information is important to him, yet his decision making process is paralyzed by the sheer volume of information he believes he needs to process. Obviously, I will want to emphasize the information that I am sending him, as I am providing him the homes that meet the criteria he communicated to me.

Communication. It’s Important Vital.

Actually, it is all about trust…

This is where communicating with your real estate agent is vital. A clear line of communication, in both directions, is needed. Your agent needs to know exactly what it is that you are looking for in your next home. And your agent needs to be able to show you where the good information is, based on what it is you told them you are looking for.

At the end of the day, there is a dearth of real estate information out there. As a real estate buyer or seller, you should find an agent you trust and work with them to secure the real estate market information you need.

And that is the rub right there, isn’t it? Many real estate consumers trust a faceless, albeit well-known website, more than they trust the real estate agent they can call or meet with. We, as an industry, have earned a reputation for being pushy, demanding and, in the final analysis, lacking in our customer service.

Are you ready for something different? Are you looking for quality real estate information without the spin?

If you are a buyer looking for that perfect home, allow me to assist you by setting up a search that meets your criteria.

If you are a seller looking for quality information on the sale of your home in today’s market, let me know how I can assist.

Just what can you do at the Fall Festival? Actually, the question would appear to be, “What can’t you do at the Fall Festival?”

There are a whole host of activities across the three days of the fall festival. Everything from Bingo and a Pancake Breakfast, to a spaghetti dinner and car show. And do not forget the carnival! Rides, games and food all await you at the 56th Annual Plymouth Fall Festival.

For more information, schedule of events and sponsors, swing by the Plymouth Fall Festival site.

Friends

We’ve all got them. We’ve got friends down the street, in the next city over, across the nation and around the globe. We have a social network (or networks, as the case may be) that we rely on for support, information, encouragement and correction. Your social network could be as simple the folks on your block or as complex as the various social media platforms you interact with on-line.

My point is that we all have social networks. The term social network has been used, nearly exclusively, to describe services like Facebook, Twitter or Google+. While the term social network certainly does apply to these great services, it should not be used to exclusively describe just these services. If you are a member of the Chamber of Commerce, you are a part of a social network. Go to church? Yep, that’s a social network too. How about the local board of real estate agents? Yes, that’s a social network too.

Good Friends

Why the definition and context of social networks? Well, there has been a long ranging, and frankly, tiresome conversation about the return on investment (ROI) of social media for business. Over on our franchise website, we dedicated a whole month to industry leaders responding to the “question” of ROI in social media. Typically, in this discussion about the ROI of social media, the “social media” is limited to the online services of Facebook, et al. For me, this conversation is tantamount to asking if there is a return on investment for breathing…

I’d like to subvert that first, base assumption, that social networking is limited to online services. Social networking does NOT depend on the technology used.

Social networking is just as old as mankind itself. When the cavemen were gathered around the fire, plotting out the day’s hunt, they were networking with their peers to achieve a common end: food for their tribe.

Real Estate

Huh? What does ANY of this have to do with real estate?

Well, one thing that I have noticed over my ten years in real estate, is that the bulk of my business in any given year comes from clients that I have helped in the past. On top of returning or repeat business, I have also noticed a high percentage of my business comes from past clients referring their friends and family in my direction. I’ve also noticed that the pace of these referrals has quickened in the last few years.

Why?

I am convinced that the online aspect of my social networking makes it much easier for my clients, family and friends to refer my services to their friends. Put another way, social networking allows me to be interviewed, without taking part in an interview. Since a satisfied, mutual friend is making the recommendation, there is already a level of trust built into the recommendation. As has happened a few times this year, clients have mentioned that they were able to watch me online, read my thoughts on the real estate market and come to the decision that our mutual friend was on to something to put us in touch with each other.

Brass Tacks

Ok, so I’ve made it clear that a majority of my business is repeat or comes from referrals, but just how much of this business is influenced by my online social networking? I could easily argue that ALL of my business comes from some form of social networking, but let us simply focus upon the online social networking.

For purposes of these numbers, social networking is defined as my blogs, twitter, facebook, and Google+ (yes, already!). Of the clients from social networking I am working with or have worked with this year, they have either been referred to me by a mutual friend from online, or have found me via online searches.

To date:

• 24 total clients so far this year: a mix of buyers and sellers
• 9 buyer clients from social networking
• 10 selling clients from social networking

So, 19 clients via online social networking divided by 24 total clients equals 79.2% of my clients to date.

79.2%

I’m sorry. What was the question, again?

Want to connect online? Here is my online profile.

Average Sales Price: $273,540

July saw an over 24% increase in the average sales price in Plymouth Michigan, compared to June. Comparing July 2011 to June 2010, the average sales price is up nearly 6%. Buyers have been jumping on new listings that have the right combination of quality and price. As our listing inventory is low this year, it appears that well-priced, great quality homes in Plymouth simply do not last long on the market.

Average Sales Price to List Price Ratio: 95.1%

Hovering just above 95% of list price, sellers gave up less than 5% of their list price to sell their home in July. For buyers, this means that you could, on average, count on your ultimate sales price being about 5% less than the home’s original list price. Please note, that this ratio does not take into consideration any seller concessions to assist the buyer with closing costs and prepaid items.

Average Number of Days on Market: 62

We see that just a little over two months was the average time for a home to have sold in Plymouth during the month of July.  The days on market were down 38 days from June’s average of 100 days on market. For sellers, you should plan accordingly: average price, average quality means an average of 96 days on the market.  Buyers, understand that if a home is drastically under the 100 days on market and has a great listing price, there are likely a bunch of other buyers taking note and getting ready to write offers.  Don’t use a short days on market metric as your ONLY reason to wait or jump on the home.  See the days on market as a piece of the larger picture, when making an offer to purchase.

Average Sales Price per Square Foot: $114

Another stat that I would take with a grain of salt, for buyers and sellers, is the sales price per square foot.  For buyers, I would suggest using this average as a way to determine a very rough estimate of what a [fill in the blank] square foot house would cost in Plymouth, Michigan.  For sellers, I would advise the same as a rough estimate for the sales price of your home. Why present the number if it should be taken with a grain of salt?  Simply put, the sales price per square foot is another stat that I would suggest you be aware of, but not use as the sole determining factor on buying or selling a home.  Taken together with the quality of the home, list price against the rest of the competing homes for sale, and location, average sales price per square foot could be a good indicator of the value or deal on a given home.