The “average” market statistics hide the true strength of the current market. Overall, the average Months Supply of Inventory (MSI) is 4.1 months (for SE Michigan), but in reality, 84% of the market is operating with a MSI of 1.5 months while the rest of the market (70% of the homes for sale) is operating with a MSI of 18.5 months. The result is a strange world where 70% of all sellers complain about a slow market with few offers while 84% of all buyers complain about a wild market with no saleable homes to purchase. Both are correct! The reality is those 70% of the homes that are in the 18-month MSI “slow zone” are not really relevant to the market since they are not attracting much market attention.

What does that mean for a buyer? It means over bidding on list prices, sight unseen offers, waiving appraisal contingencies and pricing wars above the asking price. Most importantly, it means make your best, strongest offer the first time since we are approaching 50% of all transactions with multiple offers.

So buyers have two choices: jump in and play by the new rules of a Sellers Market – move fast, be aggressive and patient since you will most likely lose out on a few before you get one, or go after the other 70% of the listings that are sitting quietly and find that diamond in the rough.

For sellers, throw your line in the water. Don’t be crazy about the price. You might be surprised what the market will give you, but be prepared to be honest about the condition and features of your house. Buyers are willing to pay a larger premium for a home that is updated, without deferred maintenance, and with a design consistent with the neighborhood (i.e. points off for a contemporary in a Colonial neighborhood, etc.). It may be worth the time and money for some basic updates before putting your home on the market.

April of 2011 was really the start of our heated up market, but even so we still showed growth over our previous year, which was strong, and buyer demand continues to grow.

Who’s The Boss? – Managing Your Rental Property Are you going to manage your rental property yourself or will you hire a property management company to manage it for you? If you manage it yourself you’ll have to screen tenants, handle repairs and maintenance, and collect the rent. If you hire a property management company, they should handle all this for you—for a fee, of course.

Repairs – Are You a DIYer? Are you a handy kind of person who can take late phone calls from a tenant saying their toilet is broken or their pipes are frozen? Or would you prefer to have a handyman on speed dial whenever your tenant has a maintenance problem?

If you have a full time job, it may be hard at times to fit in maintenance work on your rental property, especially if it’s an emergency such as no heating in the middle of winter. It may be easier to have a trusted handyman available whenever there’s a problem, but a handyman is going to be more expensive than if you undertake the maintenance yourself.

Show Me the Money! It may be fun to think of all the rent money you’ll receive from your tenants, but a landlord also has expenses. The mortgage payment, taxes and insurances have to be paid every month. It’s also wise to factor in at least a 25% vacancy and repair rate.

Here’s a hypothetical example: Your single-family home rents for $1,000 per month, but your mortgage payment is $500 per month and taxes and insurance are $55 per month. A 25% vacancy rate is $250 per month. That all adds up to $805 per month. Your cash flow (what’s left over after expenses) is $195 per month.

Screening Tenants – Do They Pass Your Test? If you’re managing your rental property yourself, you’ll need to screen your prospective tenants by having them fill in a rental application and getting their signed authorization in order to run a credit and criminal check on them.

The basic rule of thumb is that a prospective tenant should earn at least three times the amount of rent. It’s also important that your prospective tenant has the security deposit and first month’s rent ready and waiting. You don’t want to receive the security deposit in dribs and drabs, $400 now, $300 next week and the remainder next month!

Owning a rental property can be an exciting and fun journey, but only you know if you’re ready to take the plunge!

That first offer may not have been what you were hoping for, but it is a wise seller that considers several factors before responding to that first offer. Think about the season, competition, time on market and your price vs. your Realtors recommendation. All of these should be weighed when deciding to accept, reject or counter that first offer.

Your first instinct may be to hold out for a better offer, especially if your home has not been on the market that long or if there is a lot of showing activity. Well that activity declines after the first couple weeks, after that many of the buyers currently looking will have already seen your home. Buyers rush out to see newly listed homes. If it is the best they have seen, they may make an offer. They have been looking for a while and understand the market. They are ready to move on the right home. That offer they make is based off of the other properties they have seen during their search and if you’re the seller, they have seen more of the market than you. Compare that initial offer to what your Realtors pricing suggestion was.

After those first few weeks the only showings you will see are from new buyers on the market. They are at the beginning of the search and usually are less motivated to make a quick offer. They also don’t have the market familiarity built up and will want to err on the side of caution. This will cause offers from them to be lower than a buyer more educated in the market.

The longer your home is on the market the more shop-worn it becomes and the perceived value erodes. Realtors and buyers become less interested in seeing or showing your property. Some will wonder what is wrong with your property that it has not sold. Even if they find nothing wrong, they will be skeptical and offer less so they don’t lose money if they need to sell.

There are also the costs associated with holding your property longer. Every month that goes by you have a mortgage payment, insurance payment, taxes and cost of utilities. All these costs add up over time will quickly erode a few thousand dollars difference in the price received.

What this adds up to is you are never in a better position to receive the best price than when your home is fresh on the market. Even if that offer is less than you were hoping for you don’t want to be kicking yourself in a few months time for not just taking it. You may just wish you had. That rule of thumb it more true than not. Your first offer is usually your best offer.

1. Not–so-nice DIY projects.
You may have saved thousands by remodeling the kitchen or adding on an entire new room yourself. However, if a potential homebuyer can walk into your house and know immediately that the work was done by the homeowner and not a professional, he will start seeing dollar signs as to how much it will cost to remodel the kitchen or repair the extra room. If you are not a professional contractor, reconsider any major do-it-yourself home improvement projects before putting your house on the market.

2. Oops! The buyer just fell into the pool.
You may have spent long summer days enjoying your backyard pool, but a pool is not always an asset when selling a house. That’s especially true if the pool takes up most of the backyard or doesn’t have a safety fence. If a buyer steps out into the backyard and almost steps into your pool, you can easily lose that buyer. If you have a large pool and a small backyard, you will have lost many potential homebuyers. This can include those who have small children, plan to have children, have dogs, and those that just don’t want the hassle of keeping up a pool.

3. Maybe hire a house cleaner?
The goal when selling a house is to make buyers feel comfortable and want to stay in your house exploring for as long as possible. The longer potential buyers are in the home, the more likely they are to make an offer. However, if your house is a mess with dirty laundry flung on floors and showers or toilets that have not seen a scrub brush in many weeks, then the potential buyers are going to rush the viewing. They will not feel comfortable looking in every closet or cabinet but instead want to get out as quickly as possible.

4. What’s that terrible smell?
Even the best pets with attentive owners can make mistakes. However, if your cat’s “mistake” involves marking the carpet, then do not try to cover up the smell. Adding scented candles or plug-in air fresheners only make the entire house smell worse. Mixing chemically made rose scents with the powerful scent of cat urine really will not make your house welcoming or help others picture themselves living there. They’ll be too distracted wondering where that smell is coming from. If your pet has damaged any floors or other parts of the house, do not try to mask the smell. Remove and replace the damaged flooring.

5. Wish away the wallpaper.
You may have carefully selected the wallpaper for your favorite room. However, wallpaper is out of fashion and not popular with most homeowners. Like the do-it-yourself project, potential homebuyers see wallpaper and begin calculating how much time and money it will take to remove it. When choosing between two well-liked houses and one has wallpaper and one does not, the house without the wallpaper will often win the buyer’s bid.

Some of these are home features that you just can’t change, such as a large pool. If that’s the case, then have reasonable expectations when selling the home. It may take longer to sell the home or you may have to lower your asking price.

Wayne County: MSI improved 14%, sales 4% and inventories fell 11%. Excluding Detroit, Wayne MSI for under $75,000 was actually under three months. For the first time in a while, the City of Detroit did not fare as well as the rest of the county in terms of sales activity.

Oakland County: MSI improved 21%, sales 5% and inventories fell 16%. Under $100,000 moved to a Seller’s market with the balance of the county in neutral territory.

Macomb County: MSI improved 50%, sales 16% and inventories fell 40%. Macomb made the most significant improvement over last year and is the first county to move into a Seller’s Market overall.

Livingston County: MSI improved 18%, sales 13% and inventories fell 7%. Under $100,00 moved to a Seller’s Market with 75% of the market at Seller’s or Neutral.

Washtenaw County: MSI improved over 25% for combined condo and single family sales, sales fell 8% and inventories fell 30%. Although sales did not match last year, Washtenaw has been the strongest market in SE Michigan, so quarter-over-quarter gains will be more difficult.  Inventories continued to fall, improving the strength of the market, even without an increase in sales.

Grand Traverse Market Area: MSI improved 26%, sales 8% and inventories fell 16%. The NW Michigan markets are about six months behind SE Michigan, but continue to see improvements in sales, and MSI for waterfront and non-waterfront properties at all price points. Under $100,000 has moved to a Seller’s Market.

St. Clair County: MSI improved 43%, sales 48% and inventories fell 14%.  Like Macomb, St Clair County jumped over last year, with 92% of the market in neutral territory.

Genesee County: MSI improved 25%, sales 19% and inventories fell 11%. Neutral markets make up 96% of Genesee. Both Genesee and St. Clair are particularly hard hit in terms of economic growth, but great pricing seems to be taking hold and drawing activity to both markets.

We’ll be looking forward to second quarter market reports where the upward trends will possibly grow even stronger. All signs point to a Seller’s Market in the near future.

In Southeast Michigan as well as both Southwest (Grand Rapids area) and Northwest (Grand Traverse) Michigan, the Months Supply of Inventory (MSI) hit another two-year low. (Southeast Michigan had the largest positive movement.) This is a very good thing because each month with a falling MSI moves us closer to a sustainable appreciation rate. For bank-owned, the MSI fell below 3 months, with non-bank at 4.8 months.  Most of that fall was a result of an increase in contracts written in March. Available bank-owned inventories fell, but non-bank remained about the same.
 
The rest of the nation appears to be joining us in the market upturn as well. Brokers across the country are reporting strong buyer demand and a lack of home inventories, similar to where we where in mid 2011. With the rest of the country joining our party, housing is beginning to move from an economic anchor to one of the key pieces fueling the recovery.
 
For those looking to move, a common question is should I buy/sell now or wait for the market to improve a bit? The chart below shows the cost of waiting to buy versus buying this year in terms of total cost of ownership. The chart used the anticipated mortgage and appreciation rates over the next few years to project the cost of waiting to buy versus buying this year (2012).

By waiting, a buyer faces both a higher interest rate as well as a more expensive home to buy. Each year buyers wait costs them more (blue line) and reduces their future appreciation gain (green line). For many homeowners, their mortgage gap is too wide to sell; however, that gap is closing every month, so it is more important than ever for sellers to ask their Realtors to track values.

1. It’s becoming more expensive to rent than to own.
Yes, renting is convenient, but living in a rental also comes with restrictions on what renters can do with their living space—a simple task like painting requires permission from the property owners. Low interest rates and reasonable home prices make owning look more favorable than renting, especially when rent costs are rising!

2. The population of the United States is still growing.
We are the only major industrialized nation that isn’t suffering negative population growth. All those households have to go somewhere, and many families are already doubled up.

3. Building has been almost nonexistent for several years.
Ultimately, it comes down to supply and demand. There are still lots of foreclosures to work through, but the absolute supply of houses is declining.

4. Investors are removing inventory.
As investors generate positive cash flow by buying bargain properties, more become landlords, reducing the available supply.

5. Homes can’t be replaced for their current prices.
When building finally starts, builders will be forced to charge more than existing homes fetch. The cost of lumber, copper, and petroleum-based products has risen, taking building costs with them. That will make existing homes a bargain.

In the history of this country, there has never been a down economy that hasn’t recovered. This one will too, and those who take advantage of record-low interest rates will do well.

Unfortunately, people don’t want to buy at a good time; they want to buy at the best time. Few realize it’s impossible to pinpoint that time until it’s past.

It’s certainly a better time to buy than before the real estate bubble. No one can say exactly how things will come out, but those who can afford to hold their property at least five years should do extremely well.

Amazingly, a couple of the Realtors have come up with prices that are lower than you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more. When you interview the third agent’s figures, they are much more in line with your own anticipated value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money.

But which Realtor do you choose?

If you’re like many people, you pick Realtor number three. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right? After all, everyone else does it!

The truth is that you may have just met an agent engaging in a questionable sales practice called “buying a listing.” He “bought” the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price.

Why do agents “buy” listings? There are basically two reasons. A well-meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home’s value. On the other hand, there are some agents who engage in this sales practice routinely.

Whichever the case, if you start out with too high a price on your home, you may have just added to your stress level, and selling a home is stressful enough. There will be a lot of “behind the scenes” action taking place that you don’t know about.

Contrary to popular opinion, the listing agent does not usually attempt to sell your home to a homebuyer. That isn’t very efficient. Listing agents market and promote your home to the hordes of other local agents who do work with homebuyers, dramatically increasing your personal sales force. During the first couple of weeks your home should be a flurry of activity with buyer’s agents coming to preview your home so they can sell it to their clients.

If the price is right.

If you and your agent have overpriced, fewer agents will preview your home. After all, they are Realtors, and it is their job to know local market conditions and home values. If your house is dramatically above market, why waste time? Their time is better spent previewing homes that are priced realistically.

Later, when you drop your price, your house is “old news.” You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Your house could take longer to sell.

Even if you do successfully sell at an above market price, your buyer will need a mortgage. The mortgage lender requires an appraisal. If comparable sales for the last six months and current market conditions do not support your sales price, the house won’t appraise. You deal falls apart. Of course, you can always attempt to renegotiate the price, but only if the buyer is willing to listen. Your house could go “back on the market.”

Once your home has fallen out of escrow or sits on the market awhile, it is harder to get a good offer. Potential buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.

Plus, remember those two conscientious agents who got aced out of the listing? If your listing agent routinely engages in “buying” listings, he has probably aced out scores of other agents in the same way. Being human, Realtors talk to each other. If they don’t like your listing agent, not as many of them will be showing your home.

In short, you may have ended up with an agent who was good at selling you, but not good at selling your house. And you’re going to pay them a commission for it.

It is human nature for you to want the highest price for your home. However, when you choose the agent who promises what you want to hear, it often leads to stress and frustration. Most of the time, it will take you longer to sell your home. Possibly, you will end up selling at a lower price instead.

1. Get an honest evaluation.
Invite an acquaintance who’s never seen your home to give you a brutally honest evaluation. People who’ve been in their homes for years don’t notice problems that are glaringly obvious to a newcomer. Ask your real estate agent for suggestions on home updates.

2. Don’t forget the pops of color.
Yes, you should neutralize your walls so the buyers can picture themselves in your home. But if there is no color anywhere, your home will look bland and boring. These homes tend to look especially bad in internet photos. The trick is to add the color in things that don’t stay and aren’t too large—a brightly colored cloth on a small table, some eye-catching throw pillows, or some pretty placemats. In very neutral schemes where color might be out of place, add interest with texture, shape, and line.

3. Face the fireplace.
Most buyers want a fireplace and will pay extra for it, yet furniture is often faced away from the fireplace. Worse yet, some people actually place furniture so it blocks the fireplace. Always place furniture so it calls attention to this and other attractive features.

4. Add a contemporary vibe.
Even in a traditional house, a few more contemporary pieces will make your house look like it’s been updated and well cared for. If all your furniture is old fashioned, it’ll look dated, which tends to turn buyers off. Adding some big glass vases with simple, bold shapes or some massive pillar candles in contemporary holders can give a traditional house an up-to-date flair.

5. Anticipate objections.
If your furnace is very old, hire a technician to clean and inspect it, and place the work order where the buyers will see it. If there is an obvious problem that you don’t want to fix, get several estimates on the cost of repairing it and make the lowest one available to your buyers.

6. Outshine the competition.
Browse home design magazines, and adopt an idea or two. Stealing ideas from professional decorators can make your house look stunning for very little money.

Cool off on this unseasonably warm first day of spring with a free ice cream cone, thanks to your local Michigan Dairy Queen owner.

On Tuesday more than 50 area Dairy Queen stores are participating in “free cone day,” a fundraiser for Beaumont Children’s Hospital, which is the southeast Michigan affiliate of the Children’s Miracle Network Hospitals.

According to Dairy Queen, in 2011 the 45 participating Dairy Queen stores served 27,644 free cones and raised $19,754 for Children’s Miracle Network Hospitals.

DQ stores will be open 11 a.m. to 10 p.m. Stores will be staffed to handle huge crowds and owners will give away free small cones to anybody that visits their store. No strings attached.

Stores will also accept cash donations today through a Children’s Miracle Network donation bucket with proceeds going to Children’s Miracle Network at Beaumont.

2012 Participating Stores:

Algonac – 1307 St. Clair River Drive
Ann Arbor – 2430 W Stadium
Auburn Hills – 3053 Walton Blvd
Brighton – 321 W. Grand River Ave
Canton – 266 N. Canton Center Road
Charlotte – 407 S. Cochran
Cheboygan – 117 North Main
Clinton Township – 16 Mile & Groesbeck Hwy
Clinton Township – 42345 Garfield Road
Commerce Township – 1599 Union Lake Road
East China – 1980 River Rd.
East Tawas – 118 W. Bay St.
Farmington – 22290 Middlebelt
Farmington – 33326 12 Mile Road
Farmington – 34414 8 Mile Road
Flat Rock – 28918 Telegraph Road
Fraser – 34513 Utica Road
Garden City – 28825 Ford Road
Harrison – 3187 N. Clare Ave
Hartland – 10490 Highland Road (M-59)
Highland – 2330 S. Milford Road
Inkster – 26706 Michigan Ave
Keego Harbor – 2886 Orchard Lake Road
Lake City – 101 N Main St
Lapeer – 888 S. Main St.
Lincoln Park – 2356 Dix Hwy
Madison Heights – 29371 Dequindre Rd
Marine City – 236 Fairbanks
Midland – 917 S Saginaw Rd
Mt. Pleasant – 210 S. Mission
New Baltimore – 35654 Green St
Novi – 41490 Grand River
Pontiac – 1525 Baldwin Road
Quincy – 145 East Chicago
Richmond – 68020 Main St
Rochester – 743 N. Main St
Roseville – 29580 Gratiot
Saline – 400 E. Michigan Ave
South Lyon – 22253 Pontiac Trail
Utica – 45814 Van Dyke Ave
Walled Lake – 551 N Pontiac Trail
Warren – 26633 Hoover Road
Waterford – 4683 Dixie Hwy
Waterford – 5608 Highland Road
Wayne – 3007 Wayne Road S
West Bloomfield – 6931 Orchard Lake Road
White Lake – 10531 Highland Road
Wixom – 49062 Pontiac Trail
Ypsilanti – 101 E Michigan Ave