My Metro Detroit area real estate predictions (edit/delete)
Unfortunately the outlook for Southeastern Michigan real estateis not the rosiest. Because of the high unemployment, the poor economy, people leaving the state, the high foreclosures, and the banks tightening the credit guidelines HOME PRICES WILL CONTINUE TO FALL IN 2008. There are too many empty homes, too many bank foreclosures that have not been sold, and no sign of economic turnaround. The banks are going to continue to dump houses at lower prices in order to unload them which will lead to lower comparables in subdivisions. Buyers are going to continue to seek out the best home for the best price, and best value. With so many foreclosures they expect the same prices from homeowners as they do from bank foreclosed homes. So for sellers it is not rosy, but for buyers it is one of the greatest times to buy.
For buyers Here are 3 great reasons to buy this year.
1)Interest rates are still in the low 6% - 7% range depending on the day. You can still get a low payment on a home and you can buy more home than you could 3 years ago. As a buyer before you see a mortgage person or a Realtor you need to sit down and figure out how much you can afford. What kind of monthly payment can you pay for a house without getting yourself in trouble. Then ask the mortgage person what price house that payment can buy. Be sure to include taxes and insurance. Then once you get that number from the mortgage person talk to a Realtor and see what kind of home that price will buy. Don't let the Realtor or the mortgage person leave out the taxes or insurance. It is a cost that you have to pay. Stay within your budget so you can keep your house. For more mortgage information go to www.russravary.com
2)There are many available home choices as there is a large inventory. Homes that are updated and priced well are still moving quicker than other homes. But many homes are sitting on the market over 60 days. Get house hunting tips, negotiating tips, and buyers tips and advice on my website on the buyers button.
3)Wayne County real estate, Oakland County real estate, and Livingston county real estate have fallen in value in the last 3 years. Many home values have fallen between 20 - 35%. What that means to you is that you can buy more home than your could have in the last 3 years. Some of the home prices are back to 1990's.
So my advice to potential sellers is don't sell unless you have to, ie... relocation, divorce, death, retirement, or moving up to a larger house. Move if there is a life changing event. If you are just testing the market or want to price it high don't waste your time. Wait to sell. But remember that many economists are predicting that it will take up to 10 years to get back to the prices we had 3 years ago. For more great selling info, articles, sellers tips go to www.russravary.com and click on the selling button
Showing posts with label bank foreclosures. Show all posts
Showing posts with label bank foreclosures. Show all posts
Tuesday, January 1, 2008
Monday, July 30, 2007
Michigan real estate market update 2007
Michigan Real Estate Market Update, August 2007
So you want to know how long this bad real estate market is going to last in Michigan? I or anybody else can't accurately predicate that.
Here is what I know at this moment.
1.) Home prices are down anywhere from 20 to 30% off their highs of several years ago. I personally have helped clients buy homes that were less than 7 years old for 10% less than the original owner paid the builder. That is not even including what the original owner put into the landscaping, decks, window treatments and any upgrades after they moved in. My clients and I even bought one where the original owners finished the basement. The original owners have lost a lot of equity in the last few years not even including the real estate commissions they have to pay.
2.) It is not going to change within the next year because of these reasons.
a. Michigan has lost people to other states because of the automotive buyouts, Phizer, layoffs, and re-locations. That means less people to buy the same amount of homes.
b. There are more foreclosures on the horizon as there are thousands of adjustable rate mortgages that are going to adjust upward in the next year. How is somebody that has a $350,00 4.75% mortgage going to be able to afford their rate going up to 6.75%? They can for a while. But some people were banking on selling at a profit in 5 years. They can't sell the house for what they have in it right now. They may be able to survive with the large mortgage payment for a while, but at some point they will have to sell or lose the house. (if they can't afford the payment)
c. Banks have tightened up credit guidelines because of the foreclosure rates. What that means to the real estate market is that they have taken approximately 20% of the buyers (that could buy last year) out of the market. No more easy credit. That means less buyers for all these homes.
d. Because of the upcoming foreclosures prices will continue to drop as banks unload those homes. Are they always a bargain? See my how to buy bank foreclosures or are bank foreclosures a bargain? Or my article on how to buy a bargain
So the bottom line is why do you want to sell? Do you have to sell right now? Are you going to wait for the prices to come back? Can you wait for 5 to 10 years? That's how long it may take to get back to those high levels. If houses have lost 20% of their value from the high point and we only gain a 5% increase per year. That means a minimum of 4 years for it to return if we have a turnaround this year and we have 4 years of solid increases Do you think that is possible in the Michigan economy?
If you have more questions and would like to explore your options of buying or selling give me a call on my cell at (313) 310-9855 Selling tips or buying tips
Or go to my website www.russravary.com or search Michigan homes
So you want to know how long this bad real estate market is going to last in Michigan? I or anybody else can't accurately predicate that.
Here is what I know at this moment.
1.) Home prices are down anywhere from 20 to 30% off their highs of several years ago. I personally have helped clients buy homes that were less than 7 years old for 10% less than the original owner paid the builder. That is not even including what the original owner put into the landscaping, decks, window treatments and any upgrades after they moved in. My clients and I even bought one where the original owners finished the basement. The original owners have lost a lot of equity in the last few years not even including the real estate commissions they have to pay.
2.) It is not going to change within the next year because of these reasons.
a. Michigan has lost people to other states because of the automotive buyouts, Phizer, layoffs, and re-locations. That means less people to buy the same amount of homes.
b. There are more foreclosures on the horizon as there are thousands of adjustable rate mortgages that are going to adjust upward in the next year. How is somebody that has a $350,00 4.75% mortgage going to be able to afford their rate going up to 6.75%? They can for a while. But some people were banking on selling at a profit in 5 years. They can't sell the house for what they have in it right now. They may be able to survive with the large mortgage payment for a while, but at some point they will have to sell or lose the house. (if they can't afford the payment)
c. Banks have tightened up credit guidelines because of the foreclosure rates. What that means to the real estate market is that they have taken approximately 20% of the buyers (that could buy last year) out of the market. No more easy credit. That means less buyers for all these homes.
d. Because of the upcoming foreclosures prices will continue to drop as banks unload those homes. Are they always a bargain? See my how to buy bank foreclosures or are bank foreclosures a bargain? Or my article on how to buy a bargain
So the bottom line is why do you want to sell? Do you have to sell right now? Are you going to wait for the prices to come back? Can you wait for 5 to 10 years? That's how long it may take to get back to those high levels. If houses have lost 20% of their value from the high point and we only gain a 5% increase per year. That means a minimum of 4 years for it to return if we have a turnaround this year and we have 4 years of solid increases Do you think that is possible in the Michigan economy?
If you have more questions and would like to explore your options of buying or selling give me a call on my cell at (313) 310-9855 Selling tips or buying tips
Or go to my website www.russravary.com or search Michigan homes
Sunday, July 22, 2007
Buying floreclosures
Everybody watches late night TV and sees the infomercials on how people made millions buying bank foreclosures. Can you do it? It is possible but banks have closed many of the loopholes in the lending process.
Let me explain what happens in the foreclosure process in Michigan. A homeowner falls 3 or more payments behind on the mortgage. The bank then sends them a letter that they are going to start foreclosure proceedings against the homeowner. Sometimes the banks are very quick to get a letter out and start the foreclosure proceedings. Other times some banks take months to get the foreclosure process started.
If the home owners make no attempt to correct the situation and pay up, then it is usually turned over to a foreclosure attorney to handle. During this time the bank usually requires the full amount of arreage to be paid. They won't accept just one payment. They want the full amount. If they owners don't pay the full amount or reach an agreement with the bank. (Remember the bank does not have to agree to take partial payment) The house is then scheduled to be sold at * sheriff sale*. The home is auctioned off. Unfortunately many people think you can steal the homes at the sale. There are deals there at the sale but you have to do the research on the homes and their value. But what usually happens is the bank will buy the home back. The reason they do this is because they have a mortgage on it. Let's say the house is worth $120,000 and the homeowners owe $100,000 on a mortgage. The bank will buy it back up to the $100,000 to recover their costs and to get the other possible liens off the home. You could buy it for $101,000 or more and the bank would probably let you buy it.
If the mortgage was $90,000 then the bank would bid up to $90,000 to keep their interest in the property. So up to this point the only way you can get a deal on the property is to out bid other buyers on a home. (and the mortgage on the property was not close to the value of the home.)
Now the bank owns the home. The original owners may still be living in the home. They have up to 6 months to pay the bank the full amount to keep the home. This seldom happens. The poeple can actually still live in the house and not pay anything and the bank can't kick them out until the six months is up. So sometimes these people live in the house for up to a year or year and a half and not pay a dime!
The bank usually waits for the six month redemption period to lapse. They then contact 3 different real estate agents. The bank will ask the three realtors to give them a price that the house should sell for. The bank is asking the realtor for a price, that price usually is fair market value in the eyes of the realtor. So that foreclosed home is no deal. It is around fair market value. The bank then hires a realtor to change locks, winterize the home, clean carpets, and if necessary get the home in saleable condition.
So the bottom line is that the bank is trying to recover what they are owed on the house or get fair market value. So most homes that are foreclosed are not great deals. Though there are some fixer uppers that may be deals. Ask your real estate agents to look for them. There also are HUD foreclosures that go through a little different process. There may be deals in them. I will be talking about them in another section.
The key to buying homes cheaply is to know values of the neighborhood and city and look for fixer uppers or homes below market value. Or buy Michigan homes that the people have relocated and have to sell. Or a divorce situation where they want to dump the home.
To get more buyers tips and sellers tips go to my website www.russravary.com or search Michigan homes for sale
Let me explain what happens in the foreclosure process in Michigan. A homeowner falls 3 or more payments behind on the mortgage. The bank then sends them a letter that they are going to start foreclosure proceedings against the homeowner. Sometimes the banks are very quick to get a letter out and start the foreclosure proceedings. Other times some banks take months to get the foreclosure process started.
If the home owners make no attempt to correct the situation and pay up, then it is usually turned over to a foreclosure attorney to handle. During this time the bank usually requires the full amount of arreage to be paid. They won't accept just one payment. They want the full amount. If they owners don't pay the full amount or reach an agreement with the bank. (Remember the bank does not have to agree to take partial payment) The house is then scheduled to be sold at * sheriff sale*. The home is auctioned off. Unfortunately many people think you can steal the homes at the sale. There are deals there at the sale but you have to do the research on the homes and their value. But what usually happens is the bank will buy the home back. The reason they do this is because they have a mortgage on it. Let's say the house is worth $120,000 and the homeowners owe $100,000 on a mortgage. The bank will buy it back up to the $100,000 to recover their costs and to get the other possible liens off the home. You could buy it for $101,000 or more and the bank would probably let you buy it.
If the mortgage was $90,000 then the bank would bid up to $90,000 to keep their interest in the property. So up to this point the only way you can get a deal on the property is to out bid other buyers on a home. (and the mortgage on the property was not close to the value of the home.)
Now the bank owns the home. The original owners may still be living in the home. They have up to 6 months to pay the bank the full amount to keep the home. This seldom happens. The poeple can actually still live in the house and not pay anything and the bank can't kick them out until the six months is up. So sometimes these people live in the house for up to a year or year and a half and not pay a dime!
The bank usually waits for the six month redemption period to lapse. They then contact 3 different real estate agents. The bank will ask the three realtors to give them a price that the house should sell for. The bank is asking the realtor for a price, that price usually is fair market value in the eyes of the realtor. So that foreclosed home is no deal. It is around fair market value. The bank then hires a realtor to change locks, winterize the home, clean carpets, and if necessary get the home in saleable condition.
So the bottom line is that the bank is trying to recover what they are owed on the house or get fair market value. So most homes that are foreclosed are not great deals. Though there are some fixer uppers that may be deals. Ask your real estate agents to look for them. There also are HUD foreclosures that go through a little different process. There may be deals in them. I will be talking about them in another section.
The key to buying homes cheaply is to know values of the neighborhood and city and look for fixer uppers or homes below market value. Or buy Michigan homes that the people have relocated and have to sell. Or a divorce situation where they want to dump the home.
To get more buyers tips and sellers tips go to my website www.russravary.com or search Michigan homes for sale
Subscribe to:
Posts (Atom)