Livingston Co. Real Estate Market Update - June 2011

Hello and welcome to our June 20-11 Livingston County Market Update.

This month I have some interesting slides to share they come from an organization that we belong to that compiles real estate data and reports.

The first piece shows the comparison between Median income and Median home prices in the country over the last 30 years. For about 20 years, from 1981 thru 2001, home prices were between 2.7 and 3.1 times the Median Income. Starting in '02, homes became less affordable and prices, prices were artificially inflated and at one point, the Median price of a home in the US was over 4 times more than the Median income. As we know, then the bubble burst, values dropped and now that the ratio is at its lowest number in the last 30 years. So home affordability unbelievable right now! Share this information with anyone you know who does not currently own a home. The source on this information is Citi Investment Research and Analysis which is a part of Citi Group.

I think the next slide also supports the timing to purchase right now. You can see Michigan homes prices fell 41% from June '06 thru March 20-11. I can tell you that the majority of that depreciation came '06-09. It's not surprising that only states that had more depreciation were Florida, Nevada, Arizona and California. Who would have thought North Dakota would have been the most stable place in the States?! Again, I want to reiterate that although values dropped significantly, they have been fairly flat in our area for the last year.

A quick look at the sale stats shows May was a solid month with basically the same amount of total sales, traditional sales, short sales and foreclosures. The average sale price was up again. I'm a little concerned about the inventory creeping up a little with over 1400 homes and condos on the market. Time supply of inventory crept up too with about 7.5 months. This is still a balanced market but about 1 month higher than it was at the beginning of the year. One new stat that is now available is the number of short sale listings on the market. That number for May is encouraging because the number of short sale listings has decreased 24% from a year ago. Fewer in the pipeline means fewer short sales, which means more price stability.

Lastly, I wanted to touch on a reoccurring challenge we are experiencing with sales: low appraisals. The National Association of Realtors recently reported that 1 in 4 sales are impacted by a low appraisal with 10% of the sales delayed, 14% renegotiated sale price and 11% of sales nationally fell thru completely. We continue to take steps to minimize the likelihood of low appraisals, but you should know this is happening.

The market is hopping right now and we are excited to help our clients buy and sell.

As always, Karen Jolley, our team and I are here to answer any questions you have at 810.229.7000.

Our passion is helping YOU get where you want to go. Take care.

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