Monday, July 20, 2009

Ann Arbor Area Homes Under $100K

A quick search of the Ann Arbor area MLS shows 147 homes for sale in Washtenaw County for less than $100K. The bulk are in the Ypsilanti area, and 12 of them are in Ann Arbor. It feels as though I've been in all 147 in the past few weeks, but I've really only been in 25 - 35 of them. 90% of the ones I was in were either Short Sales or foreclosures. While the conditions of the houses I saw ran the gamut, overall conditions were very, very bad. I'd estimate that repairs needed on most of these homes range from $20K to $60K. Quite eye opening. Especially in the foreclosures, I've seen pristine condition to totally trashed. It's very sad to envision the situation of the displaced homeowner when you see such things as ripped out fixtures, punched out and kicked drywall, and other conditions I will leave to your imagination. Still lots of opportunity for first time home buyers and investors.

A quick reminder to First Time Buyers: The $8,000 Credit expires on December 1, 2009. Realistically, you would need to have a sales contract in place by October 15 to leave yourself enough time to comfortably work through the closing process. That leaves you under 90 days from today to find your home.

Tuesday, July 14, 2009

Ann Arbor Home Sales Market Report: June 2009

Well, one month does not a trend make. After last months good news of a comparative increase in average sales price of almost 9%, June 2009 comparative analysis shows a dip back into negative territory at a (4.7%) and a Y.T.D. (2008 vs. 2009) average sales price drop of just over 20%.

Here are the latest statistics from the Ann Arbor Board of Realtors. These numbers are for Single Family Homes (SFH) Residential, and do not include condominiums:

SFH Listings in June 2008: 808
SFH Listings in May 2009: 678
Decrease: 16.1%

SFH Sales June 2008: 357
SFH Sales June 2009: 346
Decrease: 3.1%

SFH Sales Year to Date 2008: 1,436
SFH Sales Year to Date 2009: 1,350
Decrease: 6.0%

SFH Avg. Sales Price June 2008: $232,162
SFH Avg. Sales Price June 2009: $206,738
Decrease: 4.7%

SFH Avg. Sales Price Y.T.D. 2008: $223,082
SFH Avg. Sales Price Y.T.D. 2009: $178,431
Decrease: 20.1%

Friday, July 3, 2009

Market Upturn + Appraisal Process = Catch-22

So we've all grown up believing that in a free and open marketplace, an item or product is "worth" what someone is willing to pay for it.

Not so, it seems, when it comes to residential real estate when a declining market takes an upturn. In the Ann Arbor real estate market, we experienced a distinct market upturn in May, with the average sales price rising by almost 9%, the first time the average sales price has risen in more than a couple of years. The June market statistics will not be published for another week or so, but all indicators point to another positive month. Now, two months do not a trend make, but signs are strong that the residential real estate market (at least in Ann Arbor) has hit bottom, and is on the rebound up.

The local market has been really popping over the past 8 - 10 weeks. Personally, I have been involved in several multi-offer situations, with a few offers the first day homes hit the market at over asking price. Several other agents in my office report similar activity, and several other cooperating agents from other offices are scratching their collective heads at the pleasant spike in showings, offers, and multiple-offers. Given this great upsurge, you would think everyone would be happy.

Not so fast. Once a sales price is agreed upon, the purchasers Mortgage Company sends out an Appraiser to assess the value of the home. In the past, this was typically a 'rubber-stamp' approval of the agreed upon purchase price, especially with the Mortgage Broker sending an Appraiser of his or her own choosing.

The recent market melt-down has turned this process into a quagmire of red-tape, unbelievably ridiculous requirements and regulations, and irrelevant standards being imposed which all result in a homes "worth" being decided by a third party. I do not know of any other transaction where a third party can effectively kill a deal between a willing seller and a willing buyer. This would be like agreeing to purchase a car, and the Finance company telling the buyer and seller that the car is not worth what they have agreed to.

At a recent office meeting, several of my associates have said that they have had appraisals come in at $10,000, $20,000, $40,000, and even $100,000 below the agreed upon sales price!

It works this way: When an Appraiser is called in, they must base their appraisal on recent comparable sales (Comps). Some underwriters have tightened the parameters so tightly, that it gives an unrealistic picture of the market, and actually serves to perpetuate a declining market. The Appraiser must only use sales within the past 90 - 120 days, within a tight geographic area. In the past, they were not allowed to use foreclosures and Short Sales as Comps, but do now. Using these sales as comparables dramatically decreases the "worth" of the subject property.

In addition, Appraisers now must be chosen by lenders on a 'blind draw' which means that quite often, the Appraiser is from out of the area, and is not attuned to the local market.

Bottom line: The Appraisers say they can't appraise at a higher price until the comparables are higher, yet there is no way the comparables get higher until Appraisers appraise higher. Hence the Catch-22. We are told to wait until the market "Sorts itself out." In the meantime, willing sellers can't sell, and willing buyers can't buy because of the unrealistic regulations imposed by the Mortgage Industry. The very same Mortgage Industry that got us in this mess in the first place!

Fun things to do in and around Ann Arbor...

July is just chock full of great things to do in and around Ann Arbor. This list of events was originally published by my friends over at Ann Arbor SPARK, but are worth sharing here:

Final weekend through July 5
Ann Arbor Summer Festival, 7 - 11pm
Free music and free movies. Movies at 10pm (Sunday-Thursday) and at 10:30pm on Fridays.
Location: Ingalls Mall at Washington, Ann Arbor

July 4
Ann Arbor Jaycee's 4th of July Parade, S State at E William, Ann Arbor, 10am
The Ann Arbor Jaycees are proud to host the 19th Annual Ann Arbor Fourth of July Parade. The parade starts at 10:00 am, on Saturday, July 4, 2009. Bike decorating contest at 8am.
Location: South State at East William

Now through Aug 22
"Wake" - a World Premiere Comedy by Carey Crim at the Purple Rose Theatre, Chelsea
Agoraphobic mortician Molly Harrison must realize what is truly important in her life before the power of love can finally inspire her to embrace the world again. Recommended for ages 12 and up. Directed by Guy Sanville.

July 9 - 11
Saline Celtic Festival at Mill Pond Park, Saline
Music, dancing, outdoor markets and much more!

July 9 - 12
Ann Arbor Jaycees - 58th Annual Carnival at Pioneer High School, Ann Arbor
Location: 601 W Stadium Blvd, Ann Arbor

July 13
Townie Street (Pre Art Fair) Party, 5 - 9:30pm, Ann Arbor, Free Admission
Come party with the locals to kick off art fair week. Live music, children's art fair, and more!
Location: North University between Thayer and Fletcher
Parking: Free parking is available at bagged meters on Fletcher, State, and Liberty. Paid visitor parking available at UM Thayer and Palmer Parking Decks.

July 13 and on
Learn to Row with the Ann Arbor Rowing Club
Classes begin on July 13

July 15 - 18
Ann Arbor Art Fairs
Ann Arbor Street Art Fair (AASAF)* -

July 16
56th Annual Manchester Chicken Broil, 4-8pm

July 31 and Aug 1
8th Annual Riverfolk Music and Arts Festival, Carr Park, Manchester MI

Outdoor Recreation
Delhi Metropark (on the Huron River): Metropark Information
Canoe Rentals, swimming pools

Music / Concert Sources
The Ark, Ann Arbor -
The Firefly Club, Ann Arbor -
The Ypsilanti Symphony -
University Musical Society -
General Music Events, Ypsilanti -

Resource and Entertainment Guides

Ann Arbor's Home on the Web - Ultimate City Guide

Ann Arbor Attractions
News, Attractions, Maps, Hotels, Jobs, Travel, History, Real Estate

Ann Arbor Area
Links to Parks, Sports, Recreation, Hobbies and Clubs

Detroit's Festivals and Fairs

State of Michigan Events
Plan your next trip using this event calendar - exhibits, shows and more

Michigan Art Show Directory

Wednesday, July 1, 2009

Freecycle Ann Arbor is Very Cool

The amazing worldwide phenomenon known as Freecycle(TM) started in Tucson, Arizona in 2003 by Deron Beal. Freecycle harnesses the power of the Internet to connect people who have stuff to throw away with others in their area who would like that stuff, so it doesn't wind up in a landfill. We ALL have things in our garages, closets, attics, offices, etc., that we don't need. Freecycle lets you find someone who does. No item is too big or too small but ALL must be 100% FREE with NO strings attached. A perfect consumer/earth friendly circle is no overhead, no money, no waste and no catch. After all, there is no point in throwing something away when it still has good life in it or it can be of use to someone else. And you know what they say - The only difference between a yard sale and trash is proximity to the curb. So, get that good stuff off the curb and share it with your community instead!

Post offers for all the good stuff you don't need anymore... furniture, appliances, toys, clothes, lawnmowers, car parts, etc. If it's still good, then someone probably could use it.

If you are new to Yahoo Groups and don't have a Yahoo profile yet, please go to and set one up ASAP. You do NOT have to put your full name and info on the profile but you should have one to access mail delivery options, view the pictures in the photo album, participate in polls, and do all that other good stuff. It only takes a few minutes to complete, so just do it already. You'll be glad you did!

*To post via the web page, go to