4 Reasons To Get in the Ann Arbor Real Estate Game in 2009

canary-in-a-coal-mine-ann-arbor-real-estate

So, the story goes that coal miners would carry caged canaries into the mines with them.  Canaries, being very sensitive to toxic gas, would cease singing as the gas levels rose to dangerous levels.  Thus the phrase canary in a coal mine.

I have maintained for some time now that Michigan is the canary in the housing coal mine for some time now.  Our housing market peak was late 2004/early-mid 2005.  We then saw the market decline from mid 2005 till present.

A lot of what is currently griping the nation’s housing market is a mis-perception.  Especially as that perception applies to the Ann Arbor real estate market.  The perception is that homes are not selling and cannot sell no matter what is done with the quality, price or marketing of that home.  The reality is that well-priced, great quality homes sell even before their nearest foreclosed competition.

Of the 5 buyers this year that told me, “We only want to look at foreclosures, because that’s where the values are,” only one of them actually put an offer in on foreclosed home.

As a Realtor®, I have been working with buyers and sellers in this changing market for a few years now.  It is with some bemusement that I have been able to counsel agents across the country on how to handle the depreciating markets that they are now experiencing.  Bemused, because what they are now experiencing, Michigan went through a few years ago!

I guess this article from Yahoo! exemplifies just how rough things have gotten across the country.  Michigan has been dealing with all of these issues for some time now, except maybe the recession thing, but we sure battled the perception of a one state recession!  These are the nine items they believe will cause the 2009 housing market to continue to flat-line:

9 Housing-Market Head Winds for 2009

  1. Recession (Started 12/07…in 2008 we sold MORE real estate than in 2007!)
  2. Higher Unemployment (still over 93% of folks are employed!)
  3. Consumer Confidence (perception v. reality: “we’re fine, but my neighbor….”)
  4. The Underwater Effect (sellers that need to sell, will and do)
  5. Tighter Credit (Been in place for nearly all of 2008. Not a new issue for 2009.)
  6. Slowing Household Formation (those households still need a roof over their head!)
  7. Radioactive Effect (Investor money has FLOODED into SE Michigan in last year)
  8. Foreclosure Sales (Michigan no longer leads in new foreclosures, not over with, but slowing)
  9. Subprime Mortgages (This goes hand-in-hand with Underwater Effect)

Well, since Michigan has been in this housing market longer than the majority of the country, and we’ve been dealing with most of the nine issues above, here are my reasons you should be in the Michigan housing market NOW:

  1. Lower Prices: With housing prices as low as they are, getting into a bigger home than you could afford a few years ago is possible.  “The time to buy is when there’s blood in the streets,” Baron Rothschild;
  2. Mortgage Rates: With 30 year fixed rates hovering around the 5% mark, the combination of price and rates is great!  But when I point this out everyone says, “Yeah, but who can get financed?”  There’s that perception thing again.  Perception is that it’s really hard to get financed for even a car these days.  Reality is that in the span of an hour waiting for my oil to be changed, I saw 4 cars get purchased via financing.  Did I also mention that 2008 was my best year in real estate EVER? If no one could get financed, how did that happen?
  3. Inventory: Choices, choices, choices!  Want to look at only foreclosures? We got ’em.  Want to look for 3 bedroom, 2 and a half bath homes on the Old West Side of Ann Arbor? We can do that too!  Whatever you are looking for, I’m confident a property matching your needs is out there.
  4. Upsizing: If you own a home that is getting too tight, you should consider entering the market.  The potential scenario you could experience is that for the same amount you purchased your home, you could purchase something larger.  That means more square feet for the same dollars!

What are your thoughts about the 2009 Ann Arbor real estate market, or even the national market?

Todd Waller
734.564.7465

5 Responses to 4 Reasons To Get in the Ann Arbor Real Estate Game in 2009

  1. Todd, I disagree with you re financing. Having both bought and sold a house in the middle of the bank issues sept30-nov10th i believe that the banks are the reason for this credit crisis. They are hoarding their buy out money,and not helping the consumer get financing.
    I also sold a car in mid October and Bank Of America refused to cash a $10,000 certified check despite the purchaser and account holder standing right next to me. When have you ever had a bank refuse to give an account holder their money? They told me that they didn’t have that much cash on hand, and would have to order the money into the bank and i could come in in 7 days!
    They were just hoarding the purchaser of my vehicles money. She was embarrassed,and we were both at a loss as to how to buy/sell a vehicle when the bank wouldn’t release verified/certified funds!

  2. Anne,

    You were still able to sell and purchase a home in the month of October, right? And the certified check of $10,000, some banks simply can’t/won’t do that even when there isn’t a credit crunch on.

    In one sense, I believe you are very correct: banks are/were tightfisted with their cash until the bailout came through. But even in the midst of that uncertainty, homes were bought and sold via financed purchases.

    I didn’t claim that buying or selling a home had gotten easier! Far from it; they’ve gotten trickier!

    Did you finally get things completed on the sale of your car?

  3. Todd,

    I love the canary in a coalmine analogy. You’re right, Michigan has been at the forefront of this recession and hopefully they’ll be the first one coming out.

    BTW, your Alltop news widget includes a story about how to sell without a broker. Not sure it’s in your best interest 😉
    [ed: we took care of the problem!]

  4. Todd, I totally agree that i was a lucky one to sell my luxury home,and then turn around and buy-close on another in 11 days. Had good people working for me,and i consider myself fortunate.
    Yes, i did resolve the sale of my Navigator. It took a leap of faith,but i deposited the certified check into my account,and just signed over the title to the purchaser. BofA had told me that the funds were good. After reading your comments,i guess i have been fortunate,as i have never had a bank deny me funds like that.
    I was about ready to use my grandmas technique of putting my money under the mattress,but for now i will carry on!

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