New Listing Just in Time for the Fourth

If you or someone you know is looking for the perfect family home in Okemos, I just listed it.

Ever thought of living in a neighborhood where the kids can play for hours around a pond or in the large park down the street? Of having a beautiful river in your back yard with a peaceful wooded setting? Walking into your home everyday and being welcomed by beautiful hardwood floors throughout a flowing home designed for family and entertainment? This rare opportunity has arrived in prestigious Tacoma Hills. Located on the farthest street back in the community, this home is in a low traffic area, as you stand outside you can hear how peaceful this setting is. Yet it is minutes from the mall and shopping. Your opportunity has arrived, make sure you take it.

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.

Suburban's E-home perfect fit for Michigan Families

Suburban Homes of Mid-Michigan has just released their new housing line to help combat the new construction housing slowdown experienced in the area. "Many of the homes built can have up to 10% of the materials brought to the job sites thrown out instead of used in the construction of the home. This money comes directly out of the pocket of the consumer. This home has been engineered to be extremely efficient to build allowing us to bring our home owners a product with lots of square footage at a very competitive price. We feel that this is a perfect product for Mid-Michigan families and allows them to have a great home with an affordable payment." Stated Dave Netti of Suburban homes. Dave is able to build a 2100 Square foot two story starting at $179,900. His ranch home starts at$135,000. I will post a picture of the homes with actual square footages later this week.
I spent a couple of hours with Dave and a couple other select Realtors from around the Lansing area including John DeMarco of Keller Williams. The concept of these homes were very well accepted and the overall consensus is these will be a big hit in the greater Lansing area. The one disadvantage is the lack of choices that the consumer has in color choices, of paint and doors, but the cost of the home will more than make up for that shortcoming. Forsberg has a few home sites around the Greater Lansing area that these homes could be built on. The prices quoted above is a turn key house, meaning it is a livable house at that price. If you are interested in finding out more about these, please contact me at brentforsberg@gmail.com or leave a comment here, and I will get back with you more information. This home will be springing up all over mid Michigan this year, and I will bring more pictures of it and updates as they get completed. Have a great day.

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.

Market hangover brings valuable lessons

Last night I was at a Christmas party at Dublin Square. I think out of the two hundred or so people there, 199 asked me, “so how’s the market right now? “ I respond with the same generic answer “slow in some segments, but steady in others.” Lately in Lakeside, I have been able to say we have three homes under construction for new neighbors out there. This really seems to open eyes when people hear that comment. They think housing is at a complete stop. The truth is, this market is not dead. We are seeing people still buying nice homes, the difference is, they are getting more value for the dollar. The party of the housing boom is over, and the United States housing market has finally awoken with a huge hangover. Unfortunately, some people got hurt when they fell victim to predatory lending. Others really thought the housing market would never crash and bought more than they could afford because they felt that the appreciation would bring them riches in the future. This is going to hurt for a little while nationally, but hopefully we can take a few lessons from this situation. I know I will be more careful on how little equity I leave in one of my properties so should I need to sell it fast I won’t be in a position to bring money to close. As goods become more expensive and gas prices raise again, this is a good time for all of us to readjust our budgets, and put together a program for a rainy day. A home is still a good investment if you need a place to live, but listening to a Rich Dad tape, Robert explains how a house is really a liability as a personal investment for our future. I did not understand this at first, especially being in the real estate profession. We are taught to show the tax advantages, appreciation values, and all of the other benefits that come on paper from owning a home. These are all true, but after watching the foreclosure rate, it all comes down to the simple fact of how much money is coming in the door versus what is going out. It is unfortunate that so many people are learning this at the expense of their homes.

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.