RiverWalk Video Complete

This is the second video on the series MC Squared and I am building for the communities I work in. It has been a lot of fun working on the production of these.

Is it time to buy a home or investment property yet? A study guide to reading the market.

In every market there are signs that tell you what the market is doing at any given time. These are called indicators. This post will show the indicators I use for looking at the market and trying to read where it is going. Please remember this data is being provided for you to look at and I am no way offering advice for what you should do. These are my opinions, and should be used to start a discussion only. One point to remember, even in a down market there is still a market. So it is important to find where it is and capitalize on it. The next few paragraphs may be a little too much information, so if you just want a one paragraph synopsis, skip to the last one. Other than that, if you really want to get more in depth with your market, hope this helps.

The first and most important indicator to me is population. If there is population growth, there is a need for housing. According to the “Real Estate Guys Radio,” the Detroit Metro area is getting 2 to 1.5 inquiries of people wanting to move out verses people wanting to relocate here. One of the best ways to track this is talk to a moving company or your local cable service may be of service if you know someone there. They can tell you how many hookups verses cancellations they are getting. Remember, these are not exact sciences, but they will give you an indication of what is going on in the market. Unfortunately, from talking with people in these fields around here, we are seeing population loss in Lansing as well. It is no surprise when you look at another important indicator and one which is very easy to track, absolute employment. This is tracked through the Bureau of Labor and Statistics. If you live in Lansing, search for the Lansing-East Lansing MSA, or Metropolitan Statistical Area. This is usually a few months behind, but I use it to look at trends. Absolute employment shows the actual number of jobs a region currently has. I use this instead of unemployment rate because when someone has been out of work for the allotted time on unemployment, they are no longer used in the statistic from the State as an employable person. If you look year over year for the last few years we are still trending down. Most likely we are going to see annual numbers for 2008 be a couple of thousand jobs under 2007. This is our third year of job shedding in Lansing. When there is a turn around here, things should start stabilizing and the region will start getting healthy again.

We also made history for new houses in our area according to the Greater Lansing Home Builders Association. December of 08 was the first month no single family home permits were pulled in our region. NAHB states builders are in a “de facto moratorium”.

This leads me into tracking monthly permit data from Texas A&M Research Center. Permits for our area are under 300 for 2008 according to their data. This may change a little bit from rural areas that only report once a year. I think you will see this number get adjusted to close to 400 or so for 2008. Even so, this is the lowest result since the early 80’s. It may even be another record book statistic for lowest in history since data was kept. Here is the link to view what the research center has published, http://recenter.tamu.edu/.

Existing home inventory levels in the tri county area also give us a pulse of what the market condition is. Currently there are just over 3800 homes listed on the Greater Lansing Multiple list service. If you take the last 12 months of sales and divide the current number of homes available, it shows that currently there is a 10.5 month supply of houses listed in the Greater Lansing Area. This is down from the last time I ran this ratio.

SO… What does this all mean to me?

First the new home permits levels falling off with no permits being pulled in December is a good thing for our market. Since I started tracking new home permits verses sales in 02, I have watched our inventory grow from around a 6 month supply to over 15 months. When I looked at current sales against inventory levels the end of 2008, we were around 13 months meaning that the market inventory is finally stabilizing. Unfortunately for us in Lansing we may be in for another small downturn before we finally level off and start back up the market cycle. This is based on the current announcement of 1500 jobs being cut in our area in manufacturing. It will most likely mean that we will see a little more erosion in our home values in the market. We need to see a turn around in the jobs market for the region to stabilize. It looked like we were going to see that last year but unfortunately we still had a slight downslide.

Under all of the bad news currently in the Lansing Market, small start up businesses and small entrepreneurs are beginning to sprout up and bring new life to our economy. This is a trend that is being showing up nationally as well. As large companies downsize ex-employees are becoming business owners since they are unable to find work at other companies. I feel that this is going to play a significant role in the revitalization of the Lansing Region. Even though we are seeing articles in our local paper stating that 2009 is going to be a rough year for commercial real estate, small businesses have a great opportunity to get into real estate for their companies cheap.

The answer to the question posed in the title, Is it time to buy a home or investment property yet?, is really for you to decide. What the indicators show is we may be hovering near the bottom now. What will get me to say we have absolutely hit bottom is when I see a year of the employment trend growing. What that means is we won’t know bottom has hit until we are well out of it. The only solace is, everyone finds out that way. It important to use education, and the experience you have gained and from professionals to find what is best for your situation. The real estate market like any other is cyclical. Many people told you in the late 90’s and early 00’s that they could time the stock market and become rich, well, who got the bigger bailout. I am certain that in the long run real estate will be worth more in the future than it is now. Since I believe that, it is time to get educated about the market and get out and find property. Signs of life are starting to show through the proverbial snow. Be careful, but get out and look and see what is going on around you in your market place. If you are not in the Lansing market, use the web links here and through your own research to see what is going on in your market. Deals are available for either investment or for your next home. And remember, once the growth has started it may be too late to get the best deal.

International Builders Show has Education at forefront

I am writing from the sky as I travel back from Beautiful Las Vegas Nevada returning from the International Builders Show. I know, I know, what could possibly be good about an expo and conference devoted to the housing industry? Despite the fact attendance was off one area that really seemed to be utilized this year was the education courses. I facilitated two seminars in the “Meet the Experts Series” They were “Dealing with Clients with Homes to Sell” and “Getting Along with Realtor’s.” This is my third time talking at IBS, and at each of the previous courses I have had 20-30 people. This year I had 70 and 50 respectively. Now, these courses are informal round table discussions, and mine were scheduled at 8 am in Vegas! Some of the regular education courses that I attended had as many as 500 people in them.
I have always been devoted to education and when the market challenges us to get creative in what we do, it is nice to see many others turning to the same thing. Those of you who have been attending courses in your field over the past few years, congrats, you are ahead of the curve. Those beginning to educate themselves in their field, don’t get discouraged. It is never too late to start.
One of the greatest values I received out there was the positive reinforcement from all of the other volunteers and staff that are part of the Sales and Marketing Council. Many famous speakers talk about how important it is too go to seminars to sharpen your mind and get a positive charge. This time it was even more important. As I volunteer time with sales trainers and other sales professionals around the country, we feed off of each others positive energy. It is exciting electrifying helps me realize how lucky I am to be in this profession. By the time I got this plane, I couldn’t wait to get back to Zero degree temperatures to start showing the value of our New Home Communities, and tell Lansing how great real estate is.
Now I am not saying that this is the best market ever. Though, if you are a purchaser it just may be. Two years ago if you were a seller, it was your time for your house to shine. Don’t be bitter if you bought a house in the last three years and you watched your value tank as fast as your 401K. I know it burns a little bit too see prices erode like they have. Even many experts, including myself with 11 years experience bought a house 3 years ago and got too see my equity disappear as well. I still believe that everyone should own at least one home, and if you are an active investor you should have real estate in your portfolio.
2008 was a trying year for a lot of families. I have told every realtor that I have talked too since Mid December that I am really excited about 2009. A few of them have looked at me really funny and asked why? I know it is going to be great year because I choose it to be. Even as I leave 60 degrees and sunshine and head back to clouds and cold, getting that recharge reinforces how great I have it, even in a market that has already been written off by mainstream media. One thought to keep in mind. When the media starts reporting good news about the housing industry, it will be too late for the best opportunities. They will have already passed. It doesn’t mean that housing won’t be good after that, but those that do their homework, get educated about the market, learn to read the indicators that are available will be the ones to receive the greatest gains. Keep positive, Keep educated and resolve to have your 2009 as Joel Osteen puts it “Your Best Year Yet!”

Goals, education, and a propserous 2009

Sorry it has been a little while since I have written. This year has really started out with both feet hitting the ground running. I am adding another link that is focused to new construction sales people. This site features podcasts from some of the top sales people and trainers in this field. There is still a lot of good material for salespeople in other fields. You can also search under Jerry Rouleau under I -tunes and subscribe for weekly updates.
Education and training are the keys to my success in real estate. If you look at the top people in just about every field in the world, almost all of them will tell you that they are constantly learning and practicing to continually get better. Setting goals is also a common theme that you will see attributed to success by every reputable coach and almost every self improvement book I have read. One of my goals for my education last year was to read fifteen books, three more than I read last year. I achieved it and have moved my goal to 17 this year. I will be posting my reading list in the next week. If you are interested in a quick worksheet on goal setting, check out my documents link on the side f this blog under 12 steps for setting goals. This is a summary form a talk given by Brian Tracy. I have a link to his homepage under motivation.
Despite what you hear in the media, I really feel that this is going to be a great year. The opportunities are just a little different, but by having clear goals and a plan to follow I am excited to watch this year unfold. If you have any great tips on goal setting please feel free to add them in the comments section.
One last piece of news, I am really excited to be heading to the International builders show on Jan 17th. If you would like more information on the largest trade show in the US for the building industry check out www.buildersshow.com. I hope this year brings you everything you ask for.

Despite National Gloom, Lansing Real Estate Shows Life.

If you did not get a chance to read the business section of the local paper today, it wasn't great news for the new construction housing industry. The Articles title was "New Home Sales Plunge." It is interesting to see that according to data collected by the Commerce Department, the Midwest saw a decline of 27.6 percent from October to November. I found this interesting since November this year was one of our busiest months. In our community Lakeside, we welcomed three new neighbors that are all in the process of building their homes. I find it interesting that the paper has a quote from Richard Yamarone a national economist that states "This is one sector of the economy that doesn't show any signs of life." It is interesting because the U.S. is still on pace to sell 647,000 new homes this year. It might not be the million homes that we topped a few years ago, and I am not saying that this is a healthy market. I just don't think that it is fair to say that here is no sign of life.
Locally, many of the bankers and Realtors that I have talked to have been very happy with the level of activity going on right now in our market. One builder we work with is putting in five more basements for customers before the end of January. I bring this up, because these are positive spots in our local area that you won't hear about in our main media streams. I know that homes aren't valued as high as they were a few years ago, and if you are a seller that sales are not as strong as they were. Even so, there is life in the real estate market and homes are still selling. The market will come back, and we will see real estate values rise in the future. What this region needs to focus on is job growth and stability. More jobs in the region mean a greater demand for housing helping marketing times and values.

Trespassers Beware!

Many times in Michigan we hear of property rights disputes involving where bodies of water and private land meet. Over the years there has been a lot of case law involving riparian rights. This website seems to have a lot of information regarding property rights for land owners adjacent to a body of water www.mwai.org . There is a large section of the rights of property owners and a list of cases regarding this issue.
Being a sportsman, respect of land and property is something that has always been very important to me. As more and more land is developed and purchased privately, it is getting harder to find large property for enjoying outdoor sports. Michigan has done a great job in developing its parks, and heading to the areas in the more rural parts of Ingham, Eaton, and Clinton Counties, there are tracts of State land available for use by Residents. I am bringing up land rights issues due to an incident that happened on our property behind our office on November 11, 2007. A gentleman was given permission to hunt the property with a bow, and harvested a 10 point buck. The animal ran onto property owned by a utility company. A neighbor adjacent to the utility company’s property confronted the hunter stating that he had illegally taken the animal and removed the head of the deer and took it. The neighbor had stated that he leased the property from Consumers Power. Here is the link to the article posted at WILX TV
www.wilx.com/home/headlines/11227326.html . This seems highly unlikely since several people have pointed out that Consumers Energy does not lease there property. So whose deer was it? According to the “Tagging Big Game and Furbearers” Section of the Michigan Department of Natural Resource’s Hunting and Trapping Guide. “It is unlawful to tag and animal you did not legally kill.” So even if the Neighbor did tag the head before he took it, he would still be in violation. Leaving the game laws out of, it brings up questions of property rights. If the deer had fallen on Mr. Wisniewski’s (AKA The Neighbors) property and he would not allow the hunter to retrieve it, the animal would become the State’s property. This is due to trespassing laws of Michigan. “MCLA 750.552 is the general state statute for trespass. This statute prevents anyone from trespassing upon the premises of another after having been forbidden to do so.” According to Attorney Clifford H. Bloom in an article called Trespass! Posted on the mwai.org website above, since the hunter would have been prevented from entering the premise, and the land owner could not tag the animal, an officer would have to confiscate it.
Now the question becomes since the property was not posted as private, when the hunter went on the property to retrieve his animal, was he in violation of any laws. He had never been forbidden to enter the property either by signs on the property or by any individual. If I am reading how the statute is being interpreted by Mr. Bloom, it would seem that he had every right to enter the property, especially since he thought he was still on the property he had been given permission to hunt. He had no intention of trespassing on someone else’s property. The DNR is currently involved now, and it will be interesting to see what the outcome of this incident is going to be. If you have any comments or know more about the laws involved, please leave me your comment.

Sellers Market Unhealthy, Unprecedented time for buyers

We saw more bad news in the papers last week with foreclosures rising 54% in Ingham County. New homes being started in the area through the third quarter are also down over 40%. Currently in Lansing as of today there are 5117 houses available for sale according to the MLS. Using the average of 366.5 sales per month year to date, this would mean we have almost 14 months of inventory currently on the market in the Greater Lansing area. It is no secret that the market has switched from a sellers to a buyers market.
Believe it or not this is one of the best times in the history of real estate for a buyer to purchase. The last time Lansing’s building permit numbers dropped this low was in 1982. Interest rates were through the roof and it was extremely difficult compared to today to get a mortgage. Even with the tightening of the market, there is a program for just about any one looking for a loan. I have seen some unbelievable deals on homes that have sold in the last few months. There are many different incentives and just regular price reductions that are going to allow many people who purchase right now a chance to have large equity positions in property in the future. We just came off of the longest run in housing growth in US history. Metaphorically, the new years party ended and it is currently mid morning Jan. 1st and the hangover is really setting in. Some people really tried to play the market, especially in some parts of the country were there was 15%-30% gains per year in housing value. They jumped in at the end and are currently getting burned. Michigan’s real estate market isn’t healthy if you are a seller, but in very few instances are the consequences of purchasing a home in our hottest markets of 2004 and 2005 going to have as much of an impact dollar wise as someone who purchased in Florida or California. One thing I will guarantee you, in the future, real estate will be more valuable than it is currently. I don’t have a crystal ball to tell you how to time the market and I don’t think that we are going to see the type of market we saw a few years ago for quite some time. Our area was overbuilt, financing got a little aggressive, and it is going to be hard for a while for some people to be able to get their money back out of there homes. However, we are seeing signs of the market stabilizing.
I have accumulated the building permit data for the area for the last 30+ years. It is easy to see to see the trend of the growth and then a sharp drop off for a few years. This would coincide with the existing home real estate market as well, since new homes are primarily needed when there is growth in an area. The easiest way to track new home growth is by looking at the employment growth in an area. The more job growth the more new construction that can be absorbed in a market area. Looking at jobs in the Greater Lansing area from 2000 to 2007, there were 10,000 jobs cut out of our market. This data was not seasonally adjusted, but it still shows a downward trend which would create a situation where existing housing stock would be in over supply, let alone adding new homes. New construction permits pulled were at record highs in 04-05 which has now caught up with us. The good news, we have seen employment numbers stabilize over the last year. This is a good sign for the market, because we should start to see our local market stabilize over time. For buyers right now, if you need a home there has never been a better time to find a good deal on a piece of property. When the market does stabilize and we start to see growth, people who purchase now are going to have the best chance of being in a great equity position in a few years. If you are thinking about real estate investing, now is the time to start researching properties and neighborhoods to learn values. With foreclosures at an all time high, interest rates at an all time low, and the new job announcements in Lansing and the surrounding area this market is showing signs of being healthy again faster than many of the other areas in Michigan. If you are interested in seeing what properties are available right how, please visit my website www.lansingrealestate.com, click on listings and MLS. You can either search properties my company currently has listed, or search all listings in the MLS by clicking on the MLS button in the upper right corner. If you are interested in government foreclosure homes, check out www.homesales.gov. This will give you the list of all the government foreclosed properties in the US. For strictly HUD homes in Michigan here is the link to Michigan broken down by cities. http://sales.clfres.com/SelectCities.aspx?State=MI&DollarExclusive=Y
If you are interested in viewing any of these homes, or have any questions regarding real estate investing or purchasing, please post a comment, or email me at brent@lansingrealestate.com. I will also be posting some of the podcasts that I listen to regarding real estate investing and real estate in general, as well as links to other sites I find useful.
Please let me know what other good sites are out there, I am always looking for more information. I am working on setting up to interviews regarding real estate investing. One from an investor that just purchased and flipped his first piece of property, and one from a gentleman who has been buying flipping and renting properties for quite some time. I hope to have these within a week.

Go Green Lansing

The green building movement is something relatively new on the American scene. Most people know the term green but do not know exactly what the standard is. In the residential housing industry, you can have the five star energy rating for a home, which means it is energy efficient. This is kind of the beginning standard, then you can get into the types of glues used, renewable finishings, such as bamboo flooring, and many other features that can be used to save energy and be more environmentally friendly. In Commercial buildings, I am aware of Leadership in Energy and Environment Design, or LEED. It is the standard developed by the U.S. Green Building Council. Here is the link if you are interested in finding out more about the standard, www.usgbc.org/LEED/. The National Association of Homebuilders announced that it is going green and is really pushing its new green building courses. In Lansing Gene Townsend announced his new project on the Corner of Kalamazoo and Cedar with its retail shops, condos, and apartments as a green building. I am really excited about this, and I think Gene is going to make a real impact on this town with this. As far as I am aware, this it the biggest green project that Lansing has ever seen. This may be the only true “Green” building in Lansing. This type of project is something that Lansing really needs. I hope that it is a great success for Mr. Townsend, and shows the other developers in the area that Lansing is ready to “Go Green.” (Hopefully that last line does not infringe on any copyright of any certain University)