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A recent client wanted a completed NEW home in Birmingham.  With a budget of $2,000,000, one would have thought we would have had plenty to chose from.  We did not.

Spec building in Birmingham, and throughout Oakland County, has almost come to a stop.  We are still seeing a few spec homes going up around town, but not many at all.  Most builders are holding off starting new projects, with a few exceptions.

One prominent local builder told me that other builders are having trouble getting lines of credit for construction.  Many of those who have access to cash are risk averse, and not building specs, reserving their work. Anyone who has lived here more than a few years will notice that there are less construction sites throughout the city.

In some ways, this is a good thing. It will help some resale home sellers who might have lost a buyer to new construction, but did not have that option. As the inventory of resale homes diminishes, that can put supply more in balance with demand. Eventually prices will start to head back up, and builders will start building again.

Personally, if I were a savvy builder, I would be looking to acquire land, even if I did not plan to build this year. There are some super values out there, and if the property is rentable it can have a decent positive cash flow for a while.

Sophie was selling her drawings at the Blueberry Festival in Paradise, Michigan. That is up at a northern tip of the UP for those of you who have never heard of Paradise.

For me, Sophie was the highlight of the day. She actually sold out of drawings while we where there.

In the last few weeks, Marianne Sweet and I have had a couple of quick success stories. I called in Marianne on two new listings and asked her to do her magic.

In one case, the home had been on the market previously with another agent, and had not sold. It was a lovely home, but the seller and his wife were frustrated with the lack of a sale. Marianne came in, made a few changes, and in about a month the house was under contract. Yes, we made a price adjustment too, but a review of the comps and the lack of a sale during the previous listing period told us that some changes needed to be made.

The next home was a condo in Royal Oak. I was the first listing agent and we got that one sold in about 30 days (or less) too. This in a market where the absorption rate is about 2 years for condos. We were up against stiff competition to get the listing in the first place. The seller really did his homework, bringing in 3 agents and stacking up their marketing plans and experience before he made his choice. I always like being competing for a listing. I think we have a lot to offer, and when a seller goes to the effort of bringing in a couple of agents, then they really see the difference.

Any, at closing, the seller gave me the ultimate compliment. He was thrilled with the quick sale, close to asking price and he said,

“You told us exactly what to do, and it worked!“

What had I told him to do?

Marianne is headed out again this week to do her magic on another new listing. I am hoping that we will soon be reporting another quick sale, this time in the Village of Franklin.

People keep whining about how difficult this market is. I don’t deny that it is extremely challenging to be a seller in Southeast Michigan right now. But there are many things a seller can do to get a sale. Get a listing agent who will guide you, take her advice, and you may just find yourself moving much sooner than you ever thought you would.

Ken Mascia’s recent post on the Mortgage Relief Act resulted in some good questions about exactly what the new law does for home buyers. This week Ken was even featured on the front page of the Oakland Press, where he further opined on the topic. We are always delighted to see Ken’s name in the paper.

Everyone heard about the $7,500 credit, but there are some important caveats that you need to be aware of. The most significant being that the tax credit is actually a 15 year interest free loan. That means you pay it back over the course of the 15 years. Still, that’s not at all a bad deal. I would take it in a heartbeat if I were eligible. Free money for half of the life of an average mortgage is s-w-e-e-e-e-t! I promise you, you will not find a similar offer from Countrywide or Chase.

Here are a couple of super resources for direct answers to the questions you may have about the credit as a first time home buyer.

From the National Association of Realtors:

If you bought a home since April, you may be eligible for this credit. If you are thinking of buying a home, this might help to make that decision a little easier. If you know someone who is buying a first home, pass this along to them. Better yet, have them call me

Metro Detroit has it’s own celebrity foreclosure. It might not attract national media attention like Ed McMahon, but then we already have Mayor Kilpatrick garnering the spotlight from late night talk show comedians, so what more could we want?

Wayne County Prosecutor Kym Worthy is doing a short sale on her home. Personally, I don’t think this would even be newsworthy if she didn’t happen to be heading up the case against Kwame Kilpatrick. Perhaps the Mayor’s office slipped this tidbit to the Freep so that they would take the heat off of Kwame for a day or two, and to shake up Worthy just a bit.

I have no information about Kim Worthy’s foreclosure. Frankly, I think I would be hard pressed to find a neighborhood in Southeast Michigan right now that has not been touched by foreclosure and short-sales. We’ve seen multi-million dollar homes go through foreclosure. In fact, this summer we listed and sold a foreclosure in Birmingham that had been listed for $2,000,000 at one point.

Worthy has a good job. She makes over $150k a year. Yet something happened that is not allowing her to pay her bills. No judgment from me–I am sure there is a good reason. Medical bills and messy divorces often leave people in financial dire straits these days.

Ask anyone who has been through the short sale process as a buyer or as a seller, and they will tell you it is painful. Worthy is losing her home. Her credit is messed up. It will be messed up for a while. On top of that, she is in the midst of preparing for THE CASE of her career. I don’t envy her right now.

I wish her the best and hope she can focus on making sure that she represents the people well in the case against Kwame Kilpatrick.

Photo by SparkyO5

Two weeks ago Dmitry and I took a day and headed down to the outskirts of Cleveland (about 150 miles away) to pick up a brand new car that was made about 70 miles from our home.  The car had to pass by our home to get to the dealership in Cleveland.  Ironic, right?

We were educated buyers.  We knew what we wanted.  We had the benefit of being able to pay the GM Employee and Family rate so there was nothing to negotiate.  We just wanted a new 2008 vehicle, configured the way we wanted it.  We did not want to special order and wait.

We spent a couple of hours sitting across a desk from a dealer in nearby Troy.  He did a search on the computer and told us the car was not available within 50 miles.  Apparently his dealership only trades cars 50 miles away.  Too bad for them.  They lost the sale.

A few nights later I went on AutoTrader.com.  I found exactly the car I wanted.  I clicked on a button and inquired about it.  The sales manager, Steve, answered all of my questions quickly. We passed back and forth 10 or so emails and decided to buy the car.

I really wish that I could have bought it locally.  It would have been easier for me, of course.  Though next time Steve says he will bring the car to me, so he has eliminated that barrier.

Steve’s dealership was simple and the opposite of ‘glitzy.’  But I got the service I wanted: quick, honest responses to my questions.  Steve, like me, is attached to a Blackberry so that he can answer his client emails as they come in.

How does this apply to my real estate practice?  Of course, as we have long known, the Internet is empowering buyers.  We know that is important to have our listings broadly syndicated so that buyers can find them wherever they are looking.  Buyers still want service too, even when they “find” the house.

As a buyer I was looking for someone to supply me with the car I wanted.  The guy in Troy couldn’t do that.  The guy in Cleveland figured out how to let me know what he had, and he gave me the answers I wanted when I asked.

I find the car buying process overwhelming.  I don’t know much about cars and, honestly, I don’t care to know much about them.  My basic questions are: what color is it?  And, does it have heated seats?  I like that my car came with OnStar, and XM radio but they did not influence my decision. I think I might feel like a lot of home buyers feel when they begin the home buying process.  It is intimidating.  A hugely expensive purchase.  I hope that as a Realtor I am able to take out some of the intimidation factor for buyers.

Oh, and by the way, if anyone might be interested in a well priced, loaded 2002 Cadillac Seville STS with less than 54K miles on it, give Dmitry a call at 248.961.0802.

Yesterday I spent a few hours sitting at a booth at the Birmingham Farmers Market with Rebecca Meisner from Weir Manuel.  Our group, the Birmingham Bloomfield Realtors Network, is a sponsor of the market this year.

One of the people who stopped by to chat with us picked up my card and said “If I see a Sotheby’s sign, I know I can’t afford the house.”

Phew! Most likely, NOT TRUE.

Yes, our Sotheby’s office is fortunate to have many gracious luxury homes amongst our listings.  Some of Oakland County’s finest homes have been sold by Sotheby’s agents.

But our Sotheby’s office serves all segments of the market, from rentals going for $1,000 a month, up to $10,000,000 lake front estates.  I think the distinction is that our Sotheby’s agents strive to offer exceptional service and superior market knowledge to whomever we represent, regardless of the price range.

You may see a lot of SKBK Sotheby’s signs in Birmingham and Bloomfield Hills, but you will also find plenty of them in Royal Oak, Troy, Beverly Hills, Berkley, and throughout Metro Detroit.

I intentionally hadn’t much mentioned the trip to the Dr.’s office today because I did not want her to get all worked up.  But when the topic did come up as she got dressed, I showed her the pictures of Dr. Molly’s on Molly’s blog.  Looks pretty cool.  No stuffy lab coats.  No scary looking equipment.

Filled with funky bean bags, and other kid’tastic finds, Birmingham Pediatrics feels hip and comfortable.  Dr. Molly’s daughter Mairen greeted us and got Katya settled in with a fun filled activity pack that kept her occupied while I filled out papers.  Mairen suggested we might be more comfortable over in the bean bag corner.  When Katya wanted to take a look at the Kresge Farm out of Dr. Molly’s private office, Mairen took her right in and then told her that Katya would have binoculars in her exam room.  Actually, I don’t think they call ‘em exam rooms and they don’t look like exam rooms.  There was no table with a roll of paper on it!

Katya had a great visit.  Tonight she told me she loves Dr. Molly and asked when she could go back.

Dr. Molly has figured it out.  Your kids will love you for taking them to see her.

You can follow Dr. Molly’s adventures on her blog

Birmingham Pediatrics and Wellness Center

Molly O’Shea, MD, PLLC
3270 West Big Beaver • Suite 400 • Troy, MI • 48084

248 816 2558

I’ve been seeing an interesting phenomenon this year. Seems like some home buyers are so driven to “get a great deal” that they’re buying homes they aren’t even that excited about living in! I’ve been financing houses since 1990 and for the most part people are generally buying houses to improve their quality of life. The first house you buy is a starter home. Later in life you move up to a better community, with better schools and a bigger more comfortable house. Maybe you want a gourmet kitchen, a bigger yard, more bedrooms and baths? Somehow over the past year buyers have gone off on a totally different tangent where the only important factor is how cheap the property is!

Let’s review what you want the house you buy to do for you. That’s right. The house is doing something for you; it provides your family with shelter, gives you somewhere to reside, a place to come home to where you feel comfortable. For many people, including me, their favorite place to be. Also, there are some key financial benefits like the tax write-off from paying interest and property taxes, the reduction in your mortgage balance over time and the increase in value that real estate has shown over time. One thing that has confused people in the last few years is that wildly increasing real estate values made them believe the house was their best investment. A house is a home – not an investment. Historically, real estate values have risen on average 2 to 3% per year and that’s all you should expect.

The main key here is that a great house improves your quality of life. People used to want to end up in their dream home and they would work hard to get there. I remember the good old days when my clients would call me and be so excited that they had found the perfect home and wanted to talk about the numbers and see if they could afford it. I loved those calls. I miss them.

Now people call me and say they found this foreclosure that has no kitchen cabinets or appliances and the previous owner took most of the plumbing fixtures before they left. The basement was flooded and there may be some mold in the house, but, it sold 4 years ago for $275,000 and now we think we can get it for $150,000! It’s not really what we we’re looking for but man is it a great deal!

I hate to point out the obvious here, but I just can’t help it. This type of home is probably going to require about $75,000 worth of work to get it back to livable standards. If you move in the house and then start the work you’ve got about 6 months of misery on your hands while you live in a dusty construction site. After all of this you have spent $225,000 on the place and driven yourself and your family crazy in the weeks and months it took to remodel the place. It’s likely that you could have purchased the house down the street that’s not in foreclosure and is in excellent condition for the same total amount of money. So what did you gain?

The main point here is that all of the homes on the market right now are selling at great prices! As a home buyer you should not ignore houses that are being sold by private owners. These are the properties that have been lovingly maintained and you can move into them and enjoy them on day one. Let’s get back to the basics; buy a home in a community that you like, in a neighborhood that fits your family and a house that you love!

The last few months have been whirlwind for Dmitry and me.  In spite of all that you hear about the crummy housing market, we, through hard work, good fortune and a bit of creative thinking, find ourselves square in the middle of our best year in real estate-EVER.  Yes, you read that right.  Our best year EVER.

We started the summer with over 30 listings.  Most of those homes have new owners now.  Some sold in a few days.  One half million dollar Birmingham home sold in less than a week at full price. A few more will close in August.  A few unsold listings remain, and that leaves us with those to focus on now.

But we are also at the point where we have the capacity to begin helping more sellers (and buyers) reach their goals, whether it be moving up, moving down or moving out (we hope that is not the case).

I have heard plenty of groaning Realtors around Birmingham, who are saying they are sick of this market, and tired of going without paychecks.  I am not unsympathetic.  However, the most important message I can leave sellers with right now is that HOMES ARE SELLING!  Sales are actually up (in units) throughout Metro Detroit. There are buyers out there who want to buy homes like yours.

Today I had a call from a reporter from Money Magazine.  She asked what we are doing to get homes sold.  I would say there are a couple of things that have proven successful for us:

• “Right pricing” from the start, which means carefully looking at the comps and trends in the market and helping our sellers to understand the market like we understand it.
• Innovative Internet marketing for maximum exposure.
• Staging.  Marianne Sweet, a contributor here on miOaklandCounty.com, has shown us the light and done wonders with our listings.
• The Birmingham Bloomfield Realtor Network, our tight knit group of 13 top producing agents from competing offices.  We meet to create marketing events for our listings and share ideas in a very collaborative manner.
• We have a strong brokerage behind us.  SKBK Sotheby’s International Realty has provided us with great support and with great marketing for our sellers.

I don’t pretend that this market is not without challenges.  Most brokers will say they have never seen anything like it.  Yet I see plenty of hope and success out there.  I want you to see it too.

P.S.  We need more listings :-)

I think we can all agree the housing market needs a little kick in the pants right now! Well, your Federal Government to the rescue. This week congress passed a Housing Rescue Bill which will attempt to do a number of different things from foreclosure avoidance assistance, tax credits to some home buyers and financial assistance to neighborhoods to buy and rehabilitate foreclosed homes among other things. The bill is expected to be signed by President Bush and if so it will be become law.

What I would like to focus on in this writing is the aid for home buyers. The bill offers first time home buyers a refundable $7,500 tax credit (or 10% of the homes purchase price, whichever is less) for homes bought between April 9, 2008 and April 1, 2009. There is an income limit of $75,000 for single filers and $150,000 for couples filing jointly. The tax credit is reduced or eliminated for home buyers whose earnings exceed these limits.

This is significant! If you buy a house for $150,000, and your income qualifies you for the full benefit, then you would get a tax credit of $7,500! A full 5% of the purchase price is given right back to you at tax time. Wow, that should get some buyers who are sitting on the fence something to think about. Housing sales rely heavily on the domino effect; when one person sells their home they go out and buy another house and then that seller can buy something new and so on. More buyers in the market could really relieve some of the pressures and expand home buying exponentially! This is a step that could really help to get things back on track.

Wait, there’s more . . . . . . Fannie Mae and Freddie Mac (everybody knows who they are now) recently announced that they will buy loans in “stressed markets” (Southeast Michigan falls into this category) with only a 5% down payment! Formerly, you had to put at least 10% down. Now, to get 5% down you have to be a pretty solid borrower – at least a 680 credit score and 45% debt to income ratios, stable job and at least 5% of your own money for the down payment.

So, a first time homebuyer can get a massive tax credit and buy a place with only 5% down with conventional financing! Get your megaphone out and start trumpeting this around town. If you know anyone who has been considering buying their first home now there are even more reasons why it’s the perfect time to make the move. Home prices haven’t been this low in about a decade; mortgage rates are still great, first time buyers get a big tax credit and can get conventional financing with only 5% down!!