Michigan Seeing Fastest Comeback

It's becoming old news that the housing market and economy are slowly displaying improvements nationwide. However, Michigan, by far one of the most troubled states during the recession, is experiencing a more rapid comeback than many other states across the country.

Michigan home sales were up 10% through June compared to a national growth rate of only 5% (National Association of Realtors). Home prices have also seen a steady increase, spurring more homeowners to consider selling where-as they might not have considered it even a year ago. Home prices in the Detroit area rose for the twelfth consecutive month according to Standard & Poor's Case-Shiller index.

The housing market is not the only area that Michigan is showing a positive shift. Economically, the state has begun to  see other areas of recovery. In April and May, Michigan's retail sales grew while nationwide they fell .2 percent. The Michigan Retailers Association reported that more than half of the Michigan retailers who responded to their inquiries showed rising sales in May, the highest sales month since January. Business investors also remain hopeful according to a survey conducted by Wayne State University and Institute of Supply Management, which found that many southeast Michigan purchasing managers expect the business environment to improve or, at least, remain stable. 

Considering the steadily improving economy and housing market, now is a great time to buy or sell a home. If you live int the East Lansing or Lansing areas and would like information about current market values or homes for sale, please contact me at MyRealtorRob. I also specialize in the sale and acquisition of licensed rental property so please feel free to contact me by email for information about East Lansing rental housing.

Mortgage Rates Drop and Short Term Loans Rise

The housing market has seen a recent influx of buyers and with continually decreasing mortgage rates, it's easy to see why. Freddie Mac's most recent mortgage survey reveals a 30-year fixed rate loan carries an average mortgage rate of 3.75 percent, down from 3.78 percent the previous week, reaching the fifth straight week of record lows. These rates are appealing to most buyers, but even more appealing is the average mortgage rate for a fifteen-year fixed loan, which came in at 2.97 percent, down from last week's 3.04 percent rate. This is the first time during the 21 years that Freddie Mac has tracked the rates that the 15-year loan came in below 3 percent (RisMedia).

These record lows are drawing more people to the faster pay-off loans; however, the majority of individuals taking advantage of the fifteen-year loans are refinanciers. One drawback to the shorter term mortgage is that they do carry a significantly higher monthly payment. These can range from several hundred dollars to a thousand or more monthly. Another incentive to choose the fifteen-year mortgage is Obama's Home Affordable Refinance Program, which reduces fees for new borrowers if they opt for loans that are shorter than 30 years.

One of the major perks to choosing a fifteen-year mortgage over the thirty-year is the sheer amount of money that you save in interest over the life of the loan. However, these types of mortgages are generally only recommended for homeowners who are secure financially. According to Bob Walters, chief economist at online lender Quicken Loans, people should only choose these short term loans if they have at least a year's living expenses in liquid assets and a debt to income ratio below 35% (Yahoo Finance). His reasoning behind this is quite simple, the high monthly payment can quickly spiral out of control if the homeowner loses their job or experiences an illness or other emergency.

Benefits to a 15-Year Fixed Rate Mortgage

• Lower mortgage rate
• Faster payoff time
• Less interest paid over life of the loan
• Forced savings plan

Potential Issues with a 15-Year Fixed Rate Mortgage

• High monthly payments can become unaffordable
• Less money to invest elsewhere

If you would like more information about mortgage loan options or you want to get pre-approved for a home mortgage in the East Lansing or Greater Lansing area, please contact me at MyRealtorRob. As an East Lansing realtor, I can help you buy or sell investment or residential property.

Buyers Purchasing Before Homes On Sale

If you have any doubts that the current housing market is in an upswing, just refer to a recent article published by RisMedia. According to the popular Real Estate website, house hunters who are disappointed by the current housing selection have begun to contact homeowners whose houses are not even on the market. In most cases, these buyers work with a Realtor who has access to the database of houses in their desired area that were previously listed and did not sell as well as upcoming listings that have not yet hit the market. Many Realtors, myself included, will also contact the homeowners of a house that my client really loves simply to discover whether selling is something that may interest them. 

According to Joe Grunnet, a Minneapolis broker, a shadow market exists that includes many potential sellers who would like to sell their homes, but have chosen to rent them out or wait for a turn in the market. They are unaware that many people are currently buying and that right now is a prime opportunity to find buyers willing to pay full or close to full asking prices. Grunnet's firm specializes in the sale and rental of downtown condos and lately, as the number of available units has dwindled, he has begun to contact condo owners who rent their properties to see if they are willing to sell. It appears to be working since he has sold more off-market condos in the first four months of 2012 than in the previous three years combined. 

The important thing to remember when pursuing a home that is not on the market is that the owner's may not want to sell. Flexibility and an open mind are important. Fortunately, there are may homeowners who are ready to sell, but are unaware of the recent influx of home buyers and the shortage of viable properties on the market. 

How To Access the Shadow Housing Market:

1. Find a good realtor: Get connected with someone who specializes in the location that you desire to own a home. The more people they've worked with, the more connections they will have to potential sellers. 
2. Figure out exactly what you want: Narrow down what you want from number of bedrooms to a basement rec room. This will help your realtor when searching the MLS for previously listed properties. 
3. Drive around: If you're bent set on a specific area, spend some time driving around the neighborhood. Let your realtor know about any homes that you would love to make an offer on, listed or not. 
4. Get in contact: As the buyer, you can leave this task to your realtor, but make sure to follow up with them. Some realtors will contact potential sellers with a quick note in the mail explaining that they have a party interested in their home. Other options include calling the owner directly or stopping by their house to inquire about the possibility of a sale. 
5. Get comfortable: Home selling takes time even when a homeowner has listed their property and is ready to move elsewhere. When you're purchasing a home from someone whose property was not listed, you can expect it to take time for that person to settle on an asking price, find a new house and prepare for the actual move. If you've found the home of your dreams, it's worth waiting for so allow the process to unfold naturally. 

As an East Lansing Realtor, I am happy to assist you with all of your real estate needs. If you're a buyer looking to tap into the shadow housing market or a seller ready to take advantage of the current surplus of home buyers, contact me at MyRealtorRob. 

Michigan's Positive Real Estate Trends

Anyone who has been living in Michigan during the market fluctuations of the previous several years, can take heart knowing that we appear to be coming out of a pretty hefty slump. Across the state, housing prices are on the rise, buyers are buying and sellers are beginning to recoup some their housing investments. As a realtor in East Lansing, Okemos and the Greater Lansing areas, I have celebrated this upswing as both a real estate professional and simply as a Michigan resident. It's rather frustrating to sell houses when the public opinion keeps veering towards doom and gloom, which is why it's so wonderful to offer news of the positive sort.

On a personal level, I recently received a request from a buyer to view a home for the second time, with the intention of making an offer. However, when I went to schedule the showing the home had already sold! This is the second time that this has happened to me in the last two weeks and few signs are more clear that a market is turning than houses disappearing off the market before an interested buyer can get an offer in.

According to a Michigan University finance and real estate professor, the risk of home loan defaults is at a seven year low (IQRealEstate). This he contributes to several factors, including stabilizing home prices, record low interest rates and an improving economy.

A recent Reuters.com article states that U.S. housing sales jumped in February, an 11 percent increase over the same month last year and prices rose. The article cites both Realtors and builders who are commenting on the notable change in home sales, but is careful to warn that the recovery will be slow and often spotted with minor setbacks such as increased home foreclosures.

If you're a buyer searching for a new home in the East Lansing or Lansing areas or are thinking about selling your home, please contact me at MyRealtorRob. As a seasoned East Lansing realtor, I can offer you a quick market analysis so that you can understand what your home is worth and provide you with detailed neighborhood information and other valuable home buying and selling tools.

Tools for Home Sellers

Today I'm going to diverge from my regular posts and offer instead a list of links for home sellers. These are links to articles and tools that can be helpful during the process of selling your home. You will find home selling tips for everyone and below that a section for home sellers in East Lansing, Okemos and Greater Lansing because I am a Realtor in those areas and thus know them well.

Home Selling Tips and Tools

Realtor.com: How to Choose a Realtor

HomeSellingBlues.com: Home Selling Spring Beautification Kit

FrontDoor.com: Home Selling Guide

Bankrate.com: 20 Tricks to Selling Your Home

HGTV.com: The Ten Best-Kept Secrets for Selling Your Home

IRS.gov: Tax Topics for Home Sellers

Realty101.com: Costs Involved in Selling Your Home

East Lansing and Lansing Home Selling Tips and Tools

IQRealEstate.com: Michigan Real Estate Market News

MyRealtorRob: Neighborhood Values Report

MSHDA.gov: Michigan State Housing Development Authority

"Risk comes from not knowing what you're doing." -Warren Buffet

The Benefits of 60 Plus Years: Reverse Mortgages

As we all know aging is a part of life. Fortunately, aging can have its perks, especially after you’ve entered the 60 plus age range. According to Mike Fak on WryteStuff.com, he’s found a plethora of perks for hitting 60 years of life. For instance, he now can wear white socks with any outfit, including suits, and not have a care what other people think. He can also justifiably get exhausted assembling his new exercise machine and no longer has to tell the librarian that the large print book he’s checking out is for an aging relative. These are only a few of his perceived 60 plus benefits, but another great one to add to the list is the option of a reverse mortgage.

Now before I dive into the reverse mortgage, let me add that this lovely option actually only applies to those 62 years and older, but once you’ve hit 60, you’re awfully close.

What is a Reverse Mortgage?

Stated simply, a reverse mortgage is a loan that allows you to borrow against your home’s equity. This means that instead of sending the bank a payment every month, they’re sending one to you. Not only that, but the repayment on this loan is delayed and may not have to be paid back in your lifetime. That’s a pretty sweet deal.

So Who Qualifies for a Reverse Mortgage?

Once again, you have to be 62 years of age or older. You must own your home outright or be capable of paying the remainder of your mortgage with proceeds from the reverse mortgage. You must also live in your home and there are certain criteria that your home has to meet according to HUD.

How Much Can I Borrow with My Reverse Mortgage?

This one varies according to several factors including your age, current interest rate, the appraised value of your home and any government enforced lending limits. You have several options for receiving the proceeds of your reverse mortgage. These include a single lump sum, tenure (monthly payments while you live in the home), term (monthly payments for a fixed period of time), and/or a line of credit.

How Does the Reverse Mortgage Get Paid Back?

The three major incidences when the loan will need to be paid are when you pass away, sell your home or move. If you stay in your home until death, the sale of your home or money from your estate will be required to pay back your reverse mortgage. If the sale of your home does not cover the amount of your mortgage, the lender is required to take a loss and they can request reimbursement from the FHA (Federal Housing Administration).

Possible Drawbacks to the Reverse Mortgage:

There are fees associated with reverse mortgages, which usually include mortgage insurance premiums, loan origination fees and closing costs in addition to ongoing insurance and service fees. You must also consider that choosing to pull the equity out of your home now reduces your savings for a later date, when you may need it more.

If you're interested in learning more about reverse mortgages or have other real estate related questions, please feel free to contact me at my website MyRealtoRob.

Find out more about Reverse Mortgaes at AARP Online.