State of the 2006 Real Estate Market

Real Estate One, the broker I work under, is the largest broker in the state of Michigan.  So large, in fact, that in 2004 (last set of data available), according to the National Association of Realtors, we were ranked 25th in the nation for total transaction sides.  

So, Real Estate One is not a wilting flower when it comes to real estate.  To that end, our President of Brokerage Services, Dan Elsea, son of the founder of Real Estate One, Dick Elsea, recently released his 2006 Market Letter.

The quick summary of the letter, is that we have not seen an opportunity like we currently have in the real estate market.  Low interest rates and a lot of inventory.  While it may take some digging to find realistic sellers and fairly priced properties, the chances of finding them in this market are greater, just out of sheer numbers.

Advice to sellers is in-line with what this blog has repeated on many occasions:  price at market value, monitor your competition, be ready to consider concessions for buyers, and adjust pricing accordingly.  Well-priced homes, that exude their value, are selling and will continue to sell.

0 Responses to State of the 2006 Real Estate Market

  1. I am an investor with thirty single family houses. I live in a small community of 9500 people. Where we are, financing has literally dried up. Many of my tenants have been trying to purchase the home they rent from me, most have been denied, or I have been forced to hold large second mortgages. ‘Marginal’ buyers have been driven to mortgage brokers who peddle nonconforming mortgage products. But even now, many of the mortgage companies they represent are pulling back from Michgan because of the high rate of mortgage fraud and foreclosures in this state.
    Many of the Realtors I have spoken to are struggling. Things they would balk at last year, they promote today in order to collect their commissions. The appraisers are the only ones lucking out in this market. Most of them get paid up front. However, I have personally had several appraisals ‘reviewed’ and subsequently lowered by the mortgage companies my buyers were using. The net result was a loss in revenue to me. The appraiser provided a bad product that he was paid in advance to produce. I personally feel that appraisers should be paid at closing only – just like the Realtor, the mortgage broker and the seller. Mr. Elsea speaks of the selling price in his letter, however, in Michigan, it appears that the fearful mortgage companies make the final decision, not the seller.
    I may seem like someone on a soapbox with an ax to grind – and in some aspects you may be right. My point is that Michigan needs to address its Mortgage laws. I don’t believe the lagging economy is the sole culprit. The lagging economy only brought to the surface the problems with our system. We need to address predatory lending, systems that allow over inflated appraisals, decide if legitimate ‘flipping’ is legal and more. Mortgage lenders seem to operate from fear. The system exploits that fear.
    Finally, I am not a novice in the housing market. I have help to write mortgage programs targeted to low and moderate income buyers. I have worked with MSHDA, FANNIE MAE, FREDDIE MAC and even MGIC in exploring common sense methods of financing.
    Mr. Elsea, needs to look at why we have lots of inventory. Rates may be low, but they run parallel to low perceptions found in potential buyers and sellers. I hope to see a vibrant Real Estate Market in Michigan soon. My conceren is that if there were to be an overnight turnaround, it would only serve to sweep the issues back under the rug while money is being made.

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Todd Waller Real Estate
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