The Great Recession was one of the most challenging times in US history and in the Oakland County area. The US lost nearly 9 million jobs, unemployment nationwide hit an astounding 10%, and housing prices fell a whopping 33%, causing American households to lose of $16 trillion dollars in net worth also losing their homes value.
After the housing crisis of 2008, many homeowners found themselves “upside down” on their properties, with their mortgage balances significantly higher than their homes value. According to Zillow, negative equity in the US peaked 31.4% in Q1 of 2012, meaning nearly one-third of all mortgage holders in the US owed more on their homes than it was valued.
But luckily, the economy started improving in 2010. The GDP grew an impressive 19% from 2010 to 2017, and the economy added jobs for a record-breaking 88 consecutive months, recovering all the jobs lost during the recession. Not to mention, unemployment fell to 4%.
But one area that was a bit slower to recover was peoples home values. Many homeowners who lost a significant portion of their home’s value in the recession have been hesitant to sell—especially if they purchased their home when prices were high.
But according to Evaluating The Housing Market Since The Great Recession, a recent report from CoreLogic, homeowners who lost value in their homes during the recession finally have something to celebrate. According to the report, the average house price is now 1% higher than it was at the peak of the real estate market in 2006, growing 51% since bottoming out in 2008.
The Homes Value Takeaway
If you’ve been waiting to sell your home for it to recover its pre-recession value, now is the time to make a move. Not only have housing prices recovered to their peak values, but the inventory crisis is driving up prices, making it the perfect market to finally sell your home.
The Housing Confidence is at an all time high, this is great for home sellers that are looking to sell or downsize or cash in on their equity. With plenty of reasons to buy a home, but one of the main reasons is to build wealth. And if you own a home, chances are good that your wealth has gone up a few notches in the past year.
According to the most recent Home Price Index Report from CoreLogic, home prices nationwide increased by 7% from March 2017 to March 2018. According to an April 2017 article from the National Association of Realtors, the median home price in March 2017 was $236,400. This means the average homeowner has gained nearly $17,000 in wealth from their homes over the past year.
Housing Confidence Cause and Affect
The major increases in home values are due, in large part, to the national inventory shortage which is creating serious competition and driving up home prices. But this seller’s market can’t last forever, and most experts predict the increase in home values will slow in the upcoming year.
Feeling pretty confident in the housing market? You’re not alone.
Fannie Mae’s Home Purchase Sentiment Index (HPSI), which draws from their National Housing Survey data to assign a number to consumer’s home purchase sentiment, rose 3.4 points in April 2018 to 91.7—up 5 points from April 2017 and an all-time high for the survey.
The survey saw five out of six HPSI components rise in April, with an especially strong increase in people reporting that now is a good time to sell (up 6% from March). Other factors that play into consumer confidence in the housing market include the share of Americans who report not being concerned about losing their jobs (76%, an increase of 5% over March) and people reporting a significant higher household income over the previous year (18%, up 1% over March).
You’re not likely to find more confidence in the market then we’re experiencing at this moment in history. So if you’ve been thinking about making a move to buy or sell, now’s the time.
Many folks are tempted to take the FSBO Sellers route believing they’ll save a bundle by not paying an agent’s commission. They may imagine it’s a simple as sticking a sign in the ground and watching a qualified buyer magically appear. While that may happen occasionally, the vast majority of that time it doesn’t work like that. At all.
FSBO Sellers Pricing It Right
Coming up with the right asking price requires doing your due diligence. Researching what comparable homes in the area recently sold for is key. You may also want to hire an appraiser to be sure you’re not over-pricing or under-pricing your property, as both will end up costing you. Also, beware: Those who’ve gone the FSBO Sellers route note that very often buyers are hoping for a deep discount knowing sellers aren’t paying anyone a commission. So even if you’ve listed it for a fair price, be prepared to negotiate.
When a seller prepares to put their home on the market, they have one of two choices: working with a real estate professional to sell their home, or attempting to sell it on their own (aka “FSBO” – for sale by owner).
The reason most sellers decide to go the FSBO route is to avoid paying a commission to a real estate agent. But turns out, FSBO doesn’t save money at all. In fact, in the end, it may cost you.
FSBO Facts To Ponder
According to the 2017 National Association of Realtors Profile of Home Buyers and Sellers, homes sold using an agent sell for significantly more than FSBOs. In fact, the study found that the median price of a home sold by an agent was $250,000, compared to $190,000 for FSBOs—an astounding $60,000 difference.
Will you avoid paying a commission fee if you go the For Sale By Owner route? Yes. But if your home sells for $60,000 less than it would have with an agent, it’s not worth it. The math simply wouldn’t add up in your favor.
FSBO might help you avoid paying a commission to a real estate agent, but when you factor in the expertise an agent brings to the table and the higher price they’ll be able to get for your home, FSBO isn’t a way to save money. In fact, it’s the opposite.
Farmington Hills as with a lot of markets throughout the country, there is a Farmington Hills Michigan Housing shortage of real estate inventory. There are basically more potential buyers than there are suitable properties listed for sale. Buyers and sellers have unique experiences under these circumstances. Here is how the Farmington Hills Michigan housing shortage impacts buyers and sellers.
More Home Buyer Competition
Insufficient inventory generates a competitive market for potential home buyers. Properties new to the market will normally generate lots of interest. Properties will often receive more than one offer and sell fast. Under these conditions, anticipate properties to demand above list price. What should buyers know?
Buyers must be in a position to act. A pre-approval is normally required to do so. After seeing a listing, buyers must make decisions very quickly. Even just one day may make a difference. Finally, offers should be clean and simple. You may have just that one chance. Negotiating a reduced price is usually only effective if the property has been marketed for an extended period of time and with no competing bids.
An Ideal Time to Sell
Sellers thrive in this market. It is stressful preparing a home for showings, so quick sales make the process easier. In bidding situations, they are also in a position of strength and can accept the buyer of their choosing.
Sellers must be cautious not to overprice in this market. Maximum sales prices are generally procured by correctly pricing to begin with. Overpricing can backfire in this, and in fact any, market.
Buying and selling concurrently will be a struggle in this market. Although you might be able to promptly secure a buyer for your existing house, it may require more time to find a new house to purchase given the low inventory. Finding a buyer with a fluid time frame will make a big difference. You may also want to use temporary housing to give you more time to locate a new home.
How The Farmington Hills Michigan Housing Shortage Impacts Buyers And Sellers
In general, how the Farmington Hills Michigan housing shortage impacts buyers and sellers is the typically shorter selling time but a potentially extended buying one. Sale prices will also be higher. It is important to understand the condition of the Farmington Hills Michigan market if you are attempting to buy or sell. Set reasonable expectations for both price and time frame. Connecting with an experienced agent like myself will help you through the process. Tom Gilliam-RE/MAX Classic 248-790-5594
FARMINGTON HILLS MICHIGAN FALL REAL ESTATE MARKET
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These Reports give you up to date information on your local housing market which is valuable information for home buyers and home sellers alike. The great thing about these reports are that you can search any zip code, city, state and neighborhood to get the educated information to make a wise home buying or home selling educated decision. Feel free to share these and be sure to bookmark this page to get up to date local housing market data that is updated every 7 days.
I work hard to keep my clients informed about the market while they’re buying or selling their home. These weekly reports use real-time data so my clients can make decisions based on what’s happening in the market right now and how the market is changing week by week.
A few questions these reports can help you answer:
- Is now a good time to buy or sell? Check the “Market Action Index” to see if the market is heating up or cooling down.
- How’s the market in my price range? Click into the “Market Segments” charts to see the how the market is behaving in different price ranges.
- What can I get in my price range, and where should I look? Use the “Median List Price” charts to see what you can buy in your price range, and search by zip code to compare different neighborhoods.
Feel free to share this report with your friends and family, and please let me know if you have any questions about the market or if I can help you in any way.
This week the median list price for Farmington, MI is $329,950 with the market action index hovering around 41. This is less than last month’s market action index of 43. Inventory has held steady at or around 222.
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