All I can say is “Unbelievable! I guess you can take that many ways but it sure sums up the year. From a business perspective we saw a year of uncertainty with a fairly flat market. We definitely saw a lot of buyers out looking for a great deal. We saw a lot of Seller’s coming to grips with the changing market and agreeing to sell at or below the current, fair market value.
Here at the tail end of 2011, I have seen a sharp rise in calls on properties that until now had virtually no activity. These past few weeks I have gotten calls on vacant land, new construction, acreage and existing homes. Prices are still at record lows as well as very favorable interest rates.
I see nothing to indicate any drastic change in the coming year. I feel that buyers are finally realizing that prices are about as low as they are going to get. Sure every once in a while we’ll see an occasional “steal” on the market but unless you are absolutely ready to pull the trigger, you’re unlikely to get that luck.
The key to successfully buying a property in 2012 is to build a relationship with an agent who you trust and who knows exactly what you are looking for. With all the technology available to the modern REALTOR, finding a home or property is not a difficult as you might think. Again the key is to be familiar enough with the market so you can strike when that property comes along and don’t be afraid to write an offer.
So what’s to come? You can look for steady prices in the next year or two as the foreclosure inventory keeps prices low. It will be nearly impossible for the market to rebound drastically until foreclosures dip back to a normal level. Interest rates should remain low as well to help stimulate the housing market.
Unique properties will likely rebound and appreciate the fastest. The more common the property the more inventory there will be, keeping prices low due to competition amongst sellers. Condo sales in our area have been strong and should continue to be as many buyers look for retirement home or look to downsize to maintenance free living.
Zero down financing is still readily available to anyone with relatively good credit. As the majority of the mortgage brokers have disappeared, we are seeing local banks being the best place to secure a loan. Despite what you may think, local banks are much easier to deal with, are more likely to have local underwriters who can get your loan approved faster, and are likely to have the lowest closing fees.
Buying real estate involves (at a minimum), a buyer, a seller, a REALTOR (or two), a title company and a lender. Since we all work together, I always recommend using local companies to speed your transaction along and make it as smooth as possible. As for a recommendation or two and don’t be afraid to interview the people you will be working with. Remember they are there to help you.
Also be prepared to be flexible and also set reasonable expectations. Despite what you might read on the web, not every market is depressed and not all sellers are desperate. Be prepared to weigh the value of a giving property, take into consideration all of your monthly expenses when shopping. Often times a home might be priced well but has higher utility costs, making a higher priced home a better choice if cash flow is an issue. Discuss all your concerns with your REALTOR so they can put their expertise to work for you.
If you are a seller communication and honesty is especially important. Be completely up front with your agent and tell them what you expect. Like any other business you will get different levels of service from different agents. Ask for a written plan of action as any good agent will have one readily available.
As for those foreclosures… don’t look for any sharp decrease in the coming year. As the unemployment rate hovers around 9% we will see no shortage of “Short Sales” and “Bank Owned” homes for sale. Short sales continue to evolve as banks and our government tries to come up with some way to short cut that process. Many programs have been tried and most have been unsuccessful at having any noticeable change in the market.
All parties continue to be frustrated by the whole process. Many banks have gone to great efforts to make the short sale process go smoothly but until a standard system is in place it will continue to be hit and miss. Unless you are patient and working with a REALTOR proficient with short sales, I recommend avoiding the whole process. It can be a great way to buy or sell but again, ask lots of questions and interview more than 1 agent. You’ll be glad you did.
To sum it up…. Don’t look for any drastic changes. You will see the market continue to evolve with steady prices. Financing will continue to be available and prices should remain steady. I feel that consumer confidence will begin to rise as we settle into this “new norm”.
As usual, don’t hesitate to contact me with any real estate questions about the Northern Michigan / Traverse City area. Have a Happy and safe New Year!
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