Real Estate Information Archive

1. Selection, selection, selection. There are about 10,000 resale homes on the market in Grand Rapids Metro Area, Regardless of the price range a buyer desires, there are plenty of houses from which to choose. Just a few years ago the resale inventory dropped below 3,000-4,000 units. A buyer was forced to make compromises if they were going to locate the home of their dreams. There is a great selection of attached homes, condos, and townhouses. You can find large lots, small lots, and a lot that will accommodate your boat or RV. There are lots of options in this market.
   
   
2. No Bidding Wars. In 2005 we had one client that made an offer on ten homes. They lost the first nine to the 'feeding frenzy' that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyer's market.
   
   
3. You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today the sell price list vs. price ration is about 96%. A seller will not be insulted if you 'make them an offer they can't refuse'.
   
   
4. Patience is tolerated. In the hot seller's market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer.  Today a buyer can take their time. Look at several homes and think about your decision for a few hours.
   
   
5. Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection, termite inspection, and appraisal. In 2005 many buyers waived these contingencies in order gain an advantage with multiple offers.
   
   
6. There are plenty of specs. In the not too distant past buyer had to 'play games' if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines. R.L. Brown estimates that builders have thousands of specs ready for immediate occupancy.
   
   
7. Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold 'as is'. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
   
   
8. Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyer caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It's a great time to buy without having to compete with hundreds of prospective landlords.
   
   
9. Location, location, location. Today's buyers can find homes closer to work. In the past buyers flocked to Maricopa and Queen Creek in order to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, rapid transit lines, and relatives.
   
   
10. Real Financing is available. The 'wink, wink' zero down, no doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers, and police officers are back in business. It's a great time to buy real estate!

There is a tremendous amount of misinformation spun into the marketplace regarding consumers' credit rights. Here are a few examples of the most prevalent myths.

Myth #1- When I pay off an account, it will no longer be reported or be considered negative…Wrong!

Myth #2- If a negative item is deleted, it will just come right back on my report…Wrong!
Myth #3- Certain items such as bankruptcies, foreclosures, and tax liens are impossible to remove from a credit report... Wrong!
Myth #4- Disputing a credit report is easy and any consumer can do it for themselves… Wrong!
Myth #5- Creditors will read my 100-word statement and take my side of the story into account... Wrong!
Myth #6- Credit Bureaus are infallible, a branch of the government, or otherwise beyond reproach... Wrong!
Myth #7- I can get a new credit file by getting a federal ID number... VERY, BIG MISTAKE!
Myth #8-If I build enough good credit; it will offset my bad credit... Wrong!
Myth #9-A Credit Counseling Service can help me restore my credit rating... Wrong!
Myth #10-The law requires that an item remains on a credit report for 7 years... Simply not so.
Myth #11- I can’t have too much good credit... Wrong!
Myth #12 Multiple mortgage inquiries will NOT hurt your credit as long as they are pulled within x number of days. If you are telling your clients this, you are doing them a disservice. Invest a few minutes to find out the truth. (Your clients deserve it)

1. Selection, selection, selection. There are about 57,000 resale homes on the market in Maricopa county(Phoenix). Regardless of the price range a buyer desires, there are plenty of houses from which to choose. Just a few years ago the resale inventory dropped below 5,000 units. A buyer was forced to make compromises if they were going to locate the home of their dreams. There is a great selection of attached homes, condos, and townhouses. You can find large lots, small lots, and a lot that will accommodate your boat or RV. There are lots of options in this market.
   
   
2. No Bidding Wars. In 2005 we had one client that made an offer on ten homes. They lost the first nine to the 'feeding frenzy' that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyer's market.
   
   
3. You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today the sell price list vs. price ration is about 96%. A seller will not be insulted if you 'make them an offer they can't refuse'.
   
   
4. Patience is tolerated. In the hot seller's market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer.  Today a buyer can take their time. Look at several homes and think about your decision for a few hours.
   
   
5. Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection, termite inspection, and appraisal. In 2005 many buyers waived these contingencies in order gain an advantage with multiple offers.
   
   
6. There are plenty of specs. In the not too distant past buyer had to 'play games' if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines. R.L. Brown estimates that builders have thousands of specs ready for immediate occupancy.
   
   
7. Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold 'as is'. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
   
   
8. Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyer caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It's a great time to buy without having to compete with hundreds of prospective landlords.
   
   
9. Location, location, location. Today's buyers can find homes closer to work. In the past buyers flocked to Maricopa and Queen Creek in order to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, rapid transit lines, and relatives.
   
   
10. Real Financing is available. The 'wink, wink' zero down, no doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers, and police officers are back in business. It's a great time to buy real estate!

It's the mantra of the real estate industry, posted on yard signs everywhere: It's a great time to buy.

If you are in a financial position to do so, statistics continue to show the mantra is true.

The average home price in the Grand Rapids area last month was $147,148, a drop of 6.5 percent from September 2006. The average price year to date -- $152,742 -- represents a 4.4 percent drop from this time last year.

Part of that reduction is attributed to the laws of supply and demand.

While there are 8.5 percent more listings than this time last year, residential sales last month were down 6.7 percent from September 2006.

Jamie Starner, president of the Grand Rapids Association of Realtors, said he would like to see more sales, but a drop in the number of listings joining the market was promising.

Nearly 11,700 residential properties were on the market last month. Based on overall sales figures, that equates to more than a year's supply of homes for sale.

But the number of listings entering the market in September was more than 10 percent lower than last September.

"We've got to burn off some of that inventory that we have," Starner said. "We've got to get back to a balanced market."

Pat Vredevoogd, a real estate agent and president of the National Association of Realtors, believes the market is turning.

"I see this in a number of marketplaces, where that number of new listings is stagnating a little bit now, and the number of homes being put on the market is quieting down," she said. "We're also seeing quite a few more people out in the marketplace."

The market is taking its toll on real estate agents.

Membership in the association is down 9 percent from a year ago. And agents say they are working harder for the same or less money.

The decrease in the sale price means a decrease in my paycheck, because it's all based on commission," said Ethan , an agent with A local Realty Company. "I sold about six more units last year than I did in '05 and made the same amount of money."

But as a real estate investor, Ethan also is reaping the benefits of the lower prices. He bought four homes this year to add to his stock of rental houses. They included a property next door to one he already owned.

"I paid less for a neighboring house than my wife and I paid five years ago for the house next door," he said.

The average sale price also is affected by the prices of homes being sold. Sixty percent of homes sold last month were priced for less than $140,000. Last September, it was 54 percent.

Twenty-two percent of homes sold were priced between $140,000 and $200,000, and 18 percent were more than that, including three priced at more than $1 million.

Why can’t we be more like Grand Rapids?

By JOANN FITZPATRICK

It’s such a big country, America. I don’t know it well, haven’t traveled from sea to shining sea, except by airplane from East to West several times. Last weekend I was in Michigan, not quite the heartland but close enough.

The combined effect of television programs, chain stores and restaurants and electronic gadgets is that we think we’ve been homogenized.

But it’s not so, thank goodness.

I know that when I visited New Orleans, before and after Hurricane Katrina, this is a place very different from Boston or anywhere else in America.

Texas, too. But what of the vast Midwest? Is it really different from New England or California?

Darned right, it is. I was in Grand Rapids, Mich., for a wedding. What I knew about Grand Rapids before going there was that it was the hometown of President Gerald Ford and site of his presidential library and museum. And also the home of Amway, though I and other out-of-town guests had only a vague idea of what Amway sells.

The small talk that predominates at events like this was punctuated repeatedly by wedding guests proclaiming to one another, ‘‘What a nice town, what a surprise!’’ Many if not most of the guests flew in from both coasts and interesting places in between, such as Santa Fe. There was elitism to spare but at the same time a willingness to be charmed by a place that truly seems to represent good old-fashioned American values.

If there are surreptitious litter police, they keep themselves well hidden, but the streets of Grand Rapids are as gleaming as the refurbished buildings throughout the downtown. Community pride is everywhere. I couldn’t help but compare what I saw to cities and towns back home.

Don’t get me wrong, I love Boston and New England, from the coastline to the old mill towns like the one where I grew up, Manchester, N.H. But there’s no disputing that the quality of life in this area continues to deteriorate. We blame government for not investing more in parks and beaches, but who’s dropping the garbage? It’s not the government; it’s us. The mounds of Dunkin’ Donuts cups scarring off-ramps on our highways is disgusting. Local streets are no better and because we seem not to care, the habit just grows.

In Grand Rapids, Midwestern friendliness and helpfulness were everywhere. I left my camera in a cab and within minutes of calling the hotel, staff was on the case. They called back 15 minutes later, not having located it yet but to let me know I had not been forgotten. I nearly fainted from the shock of random kindness. (Yes, I got it back.) When was the last time someone actually cared that you lost an item in their store, or even that you were shopping there?

Downtown Grand Rapids, a city of about 200,000, is a laboratory of urban renewal. Formerly a manufacturing city - home of Kelvinator, for example - it faces a huge challenge in reshaping its economy. The state of Michigan is no help, since its automobile-reliant economy has been in the hopper for years, with more bad news sure to come.

So what is Grand Rapids turning to? Health care. And here is where it could be interesting to Massachusetts. Spectrum Health, Grand Rapids’ biggest employer, is creating a cancer center and also expanding its medical research, including a new center for molecular medicine. Michigan State University is moving its medical school to the city. You may say, ‘‘So what?’’ But think about all those Boston-area college graduates, our biggest source of human capital, and the cost of living in Massachusetts, and then compare it to Grand Rapids. There you can buy a five-bedroom house in the historic district for $400,000. Yup, $400,000, and you could walk to work, breathe clean air and not worry about litter blowing in your face. And your children could attend a neighborhood school. The historic district, a microcosm of American architectural styles, was rehabilitated decades ago solely because of the efforts of public-spirited citizens.

I am not writing this to encourage young people to leave Massachusetts. I think it’s important to recognize, though, that we don’t necessarily have it all here. We have first-class hospitals and colleges with costs to match and housing prices that make building a future here ever more difficult. We also have a shortage of the kind of community spirit I saw in Grand Rapids.

There, the Amway Corp. and its founders put their names all over downtown, investing in public buildings they hope will rejuvenate the city.

Here, corporations hand out a few dollars to local charities, but there is less to donate as they are bought up by national companies more interested in naming rights on arenas than in philanthropy or rebuilding communities.

Look around your town: Can it be improved? Probably. I am tired of dirty streets and blaring car horns, bad manners and shoddy service. We’re better than that, aren’t we?

JoAnn Fitzpatrick, former editorial page editor

Copyright 2007 The Patriot Ledger
Transmitted Saturday, June 16, 2007