International Builders Show Full of Engery

I am out here in Las Vegas at the end of the first day of the International Builders Show. I will be speaking tomorrow on how to get rid of existing homes and Thursday about foreclosures. Despite the building industry still in a slump nation wide. The economic forecast is showing signs that the proverbial spring has begun and markets are stabilized in a lot of states and there may be some growth this year. Energy seems good at the conference so hopefully there are good things in store for the new home industry this year!

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!”

Market report on Lansing housing supply

I apologize for not getting the investor interview posted, I have had some scheduling conflicts with getting the interview done. I am hoping to record it this week. I have just run a market report for my company using the Realtor multiple list data. I do this every couple of months to try and keep a pulse on our local market. When I ran these numbers in July we had seen a constant rise in the amount of homes available on the market of both existing homes and new homes. This has been right in line with the national numbers that we have all seen on T.V. and in the papers. As of the end of November there were currently 4978 residential properties listed in the MLS. Looking at the amount of homes sold year to date, this means there is currently just over 14 months worth of housing stock available in the greater Lansing area. This is about a month more of supply than was available earlier this year. We are starting to see the market stabilize especially in new construction where permits pulled for new homes have declined more than 40% year over year for two years in a row. For the first time since the early 1980’s we may see less than 600 new homes built in this area. If you are interested in buying a home, it has been over twenty years since we have had this strong of a buyers market. I have many homes that come across my desk daily that would be a good buy, and there have been several that are almost steals. Whether you are looking for a home to live in, or for an investment, now is the time to really start doing your homework and seeing what’s out there. It might not be the best time to flip properties, but if you can buy and hold, it will be worth it in the future. You can start looking at properties by going to www.lansingrealestate.com and clicking on the home search function. If you are interested in learning more about investing I have a few good links on the side of this page you should check out. If you have any questions, please feel free to send me an email at brent@lansingrealestate.com or call my office at (517) 349-9330 ext. 206. Have a great day.