I read on Yahoo that the next energy saving feature should be a white roof on homes and buildings. According to the Nobel Laureate Steven Chu ( who is also the current US Energy Secretary) if we all painted our roofs white it would amount to energy savings equal to removing all the cars on the road for 11 years. That seems impressive. But I wonder what the neighbors will think. Can you imagine the first person on the block, ladder leaning against the house, paint cans lined up on the peak and the owner up there rolling away. The roof going from a traditional brown, green or black to a blazing white. It would be easy to give directions, " Just turn left on Elm and I'm the house with the white roof." It could be a selling bonus, " The only white painted roof in town keeps the home cool and summer electric bills low. Please do not look directly at the roof without protective lenses." You might even become an FAA landmark, "Roger flight 2L2Q continue to white roof beacon and turn to heading two niner seven." But I guess the real question before I get on the roof is a more complicated one. Should I use porch and floor paint? Do I use oil or latex? Is roof paint on the market? Do I use a roller or brush? And finally is this like a deck where I have go up there every two or three years? Hmmm.

As we end 2008 in West Michgan the rate of short sales and foreclosures are at almost 75%. That means almost 3 of every 4 homes sold in the area are being sold under distress. For the year 48% of all sales were under distress. So homeowners who sold during the year were competing against distressed homes which are driving down values.

Half of all homes sold in the area were sold because the either the bank owned it or the home was worth less than was owed. Home values in the area have dropped 16% so far this year. That means more people are falling under the line everyday. Pile on top of that the upcoming rate adjustments for buyers with adjustable rate mortgages that are currently paying 0% to 3% and are going to see rates move to 6% or more and I think the % of homes that will sell due to short sales and foreclosures will rise in 2009.

Unemployment in the area will increase. The upcoming shrinkage of the auto industry will increase those numbers next year. The continued slow economy (call it a recession) will impact those numbers next year. And people leaving the state because they cannot find a job will increase those numbers next year. Increasing the number of homes in distress and on the market in 2009.

The number of homes sold this year in West Michigan was up 1% while total dollars were down 15.3%. I think that trend will continue in 2009.

The hope for owner occupied homes is that there seems to be developing a division amoung buyers. One group consists of investors and bargain shoppers who are hunting primarily foreclosures and the other group is looking for their next home and don't want to deal with the issues that come with bank owned homes. This second group does'nt have the either the time, skills or capital to conduct the work needed to get most foreclosues back into prime condition and want a home in excellent condition. But they still want a bargain and currently have the power and selection to find that bargain.

For home sellers this means there are buyers looking for their home, but it has to be in excellent shape and in a good location. There are too many choices for these buyers to put up with flaws that used to be overlooked. If the site is not good, abutt bad views, have lots that are funky the seller will struggle. If the floor plan is too specific or specialized then the seller will struggle. If the condition is not good with newer mechanicals, updated appliances, newer roof and updated paint then the seller will struggle. If the price for the amount of home is not a value then the seller will struggle.

What does struggle mean? It means the home will sit on the market without offers and the seller will need to drop the price of the home until it becomes an obvious bargain. It means the home owner will have to accept that they are competting directly with foreclosures and will have to price their home accordingly.

Even well built, beautifully crafted homes located on ideal lots with all the latest updates will struggle if not priced at a value. No one wants a fair deal today, they want a bargain. Today any offer has to be carefully considered. Recent similar sales (comps) have to be reviewed and there is no room for idealism. Sellers have to objectively look at what they have to offer versus the market and decide if the offer is competitive to what other comps are bringing. While that is not so very different from has always happened, the level of pricing and discounting is unfortunately much greater.

Home buyers will continue to find great deals in 2009 and home sellers will continue to lose value. If your planning on staying where you are, make sure to reivew your tax assessment. Now is a great time to argue that your home is worth less in 2009 than it was in 2008.

If your in your home this year and have a happy healthy family then give thanks for those blessings. You are in a better situation than alot of other people during this difficult time.

Merry Christmas and Happy New Year.

Well here it is 2008 and I have finally relented to creating a blog. I can't promise alot of stuff but I'll try to make some notes here that are helpful.