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Archive for September, 2010

Lake Orion Michigan- Sale Prices Up 4 Months In a Row!

Normally hearing that year to date median sale prices are down 3.4% wouldn’t be good new. But when you consider Lake Orion Michigan/Orion Township Michigan prices have been plummeting since 2005, a slight decrease in prices truly is good news.

Even better news is the median sale price has been up over the previous year the last 4 months in a row. And the extraordinary news is the total sales volume is up from last year.

lake orion michigan median sales price by month

Median Sales Price Through August
2009: $152,000
2010: $146,850

Unit Sales Through August
2009: 227
2010: 270

Bank Owned Sales Through August
2009: 113
2010: 99

Short Sales Through August
2009: 20
2010: 54

Total Sales Volume Through August
2009: $38,935,780
2010: $41,645,700

Active Listings
9/28/2009: 235 with a median asking price of $209,900
9/18/2010: 159 with a median asking price of $174,900

Are we on a recovery in Lake Orion Michigan? It’s hard to say right now; only time will tell if this is a trend. The reduction of both bank owned homes and the major reduction of inventory could certainly contribute to a stabilization of prices. The increase of both unit sales and total volume is also encouraging.

The best way to determine how a specific subdivision or neighborhood is doing is to contact me for a market analysis or for a more general idea of neigoborhood prices check out the neigoborhood pages linked below.

Individual Neighborhood Sales and Community Information

Lake Orion Michigan/Orion Township Michigan Sales Data

Lake Orion Michigan Homes For Sale

Search The MLS

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It’s no big secret that Michigan residents in general have been going through some rough economic times. I say in general, because not everybody is hurting. But with unemployment/underemployment at 20% or more many Michiganders have felt a financial pinch.

Some of that financial pinch shows in many of the houses that have sold in the past few years. Not as well maintained and some foreclosures are downright destroyed. For those who have taken advantage of our buyers’ market, you will more than likely need/want to make repairs and improvements on those homes. And while making those repairs and improvements you may want to consider the fact that the cost of energy has been on the increase with no end in site at this time.  Personally, my electric use is down, but my electric bill is higher than for the same period last year.

We can only tackle the cost of power itself with constant contact with Congress people (Cap and Trade, etc) and in the voting booth this fall. But we DO have some control on the amount of electricity and gas we use and get some of our tax dollars back in the process via tax credits and rebates.

There are Federal tax credits that don’t expire until 2016 for items such as Geothermal Heat Pumps, Residential Wind Turbines and Solar Energy Systems- 30% of cost with no upper limit.

And there are Federal tax credits that expire December 31, 2010 for 30% of the cost up to $1500 for items such as “biomass stoves” known to the rest of us as wood stoves (or corn, or pellets), central air, heating, water heaters, insulation, windows, doors, and roofing. You should go to the federal government web site for details and exclusions and consult with your accountant before purchasing anything.

Not covered are items like ceiling fans, CFL’s- those swirly light bulbs made in China (the last American light bulb factory just closed down), toilets, electric furnaces/boilers (like we all have natural gas available), clothes washers and dryers….

You state may have it’s own credits or rebates. Some of the rebates for the state of Michigan have run out of money (but there is sill money in the budget to promote breast feeding), but there is still some money left for the purchase of refrigerators, clothes washers and dishwashers. Check this web site for details.

If you are getting ready to sell your curent home, some energy efficient improvements may help when competing against the rest of the houses on the market.

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Michigan Tax Legislation Now in the House of Representatives- Good News for Home Buyers and Sellers

A brief explanation of how Michigan property taxes work. We have what is called the homestead exemption for a person’s primary residence in The Great Lakes State, which basically means if the house is your primary residence you get a break on the millage rate- up to 18 mills. On a house valued at $200K- or a taxable value of $100K- 18 mills equals $1800. Not chump change.

The way the law currently works is if you buy a house that isn’t a primary residence, such as a bank owned home, you must close and file your homestead exemption with the township prior to May 1. If you file after May 1, you will pay the higher rate for the remainder of the year. So if you close on your house in June, you will have both the summer and winter tax bill at the higher rate.

Today I received an E-News Special Alert in my in box from the Michigan Association of Realtors letting me (and everybody else in their e-blast) know that Senate Bill 77 passed the Michigan Senate today with a vote of 36-0 and now moves to the House of Representatives. The email states that “This legislation would provide for an additional principal residence filing date of October 1st.” It goes on to state an amendment was added to move that date to November 1 for 2010 only. It wasn’t specific as to whether you have to file ON Oct. 1 or BY Oct. 1. As I find out more details, I will update you.

In the meantime you may want to contact your state rep to let them know how you want them to vote. I have also found when I need more details on a piece of legislation, my rep has had no problems in the past emailing me the complete text of a bill. Remember- our representatives work FOR us.

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The Foreclosure Process in Southeast Michigan

Many of the numbers the media likes to spout about homes going into foreclosure are a bit exaggerated. When you read about the number of homes in foreclosure the stats often quoted are the notices of foreclosure that have been served- not the new bank owned listings. There are also companies like Realty Trac that publish specific houses as foreclosed homes. And technically while that that may be true, those houses are not for sale and may never come up for sale.

Below is my attempt to dispell the myths floating around about foreclosures and explain as simply as possible how the foreclosure process works in Southeast Michigan.

Typically a person needs to be behind on their house payment by 3 months or more before they receive a notice of foreclosure. That notice of foreclosure will have a date for the sheriff’s sale– usually a couple months off. The bank (or first lien holder if there are multiple loans on a house) will buy the house back at the sheriff’s sale for the amount of the mortgage or fair market value or someplace in between.

After the sheriff’s sale the owner has what is called a redemption period to pay off their mortgage(s). Most homes will have a 6 month redemption period. Homes on 3 plus acres will have a year to redeem. During this entire time the owner still has full rights of use and has the ability to sell. But the media will still call these homes bank owned or “in foreclosure” during this period.

Many of these homes will never go back to the bank. Some people will catch up before it ever gets to the sheriff’s sale. Some will sell during that time; some people still do have equity in their homes and others may be willing and able to bring cash to the closing. Others will sell via the short sale route. Many times a lender will delay the sheriff’s sale if the owner is in the process of a short sale. Some will even extend the redemption period if necessary rather than take the house back and sell as an REO (bank owned) property.

I’m finding that the amount of true bank owned sales in North Oakland County are on the decline and a major increase in short sale closings. For very detailed sales statics please click the links below for very dry and for many boring sales data for Lake Orion, Oxford and Clarkston Michigan.

Lake Orion Michigan sales data

Oxford Michigan sales data

Clarkston Michigan sales data

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Oakland County Michigan Seller- You Accepted the Offer. Now What?

When we go over an offer to purchase from a buyer, I will go over price and terms as well as any contingencies. Typical contingencies are mortgage contingency, inspection contingency, subject to clean title, must appraise for at least sale price. And there are time frames for each contingency.

A normal offer will give 30 or 45 days to get a mortgage and the buyer must apply within 5 days. Usually 7 days for a home inspection and clean title prior to close. So let’s use these time frames to explain what happens next.

The buyer will call his/her loan officer and apply for the mortgage (formal mortgage application) but instruct his/her loan officer to not order the appraisal until after the home inspection. In the meantime I send a copy of the purchase agreement and pre-approval letter to our title company to get rolling on the title work.

Within the first week the buyer will need access to your house for approximately 3-4 hours. They may need to make 2 trips, depending on how many inspections they will have (radon requires the inspector to come back. Septic or mold inspection may require a second inspector). If everything is fine with the inspection, we should hear from an appraiser within a week or so. If there are problems with the inspection, the buyer will probably either back out of the offer or ask you to either make repairs or lower the price.

Assuming we get past the inspection ok, the appraiser will come out to the house. He/she will only be there around 15 minutes to maybe a half hour. Within a week or so the lender will get the appraisal back. An FHA appraisal may require some repairs. It will be addressed in the purchase agreement who is responsible for the repairs. An appraisal for a conventional mortgage is pretty much just justifying the sale price. For this example we are going to assume the appraisal comes back ok. A later post will address low appraisals.

So now your house has cleared the inspection and appraisal contingencies. We are probably at least 2 weeks into the transaction at this point. Your title work should be back and clean since I order pre-title at the time of listing and any problems can be taken care of at that time.

Now we just wait until the lender finishes approving the buyer and we set a closing. The buyer will probably walk through the house prior to closing to make sure it’s in the same condition as when they wrote the offer. If possession is at close, they will also want to make sure you have moved out.

You will need to call the utility companies and let them know when you will be moving out and the name of the future new owners. It would be a courtesy to leave any manuals for appliances, or furnace, etc. for the new owner.

Then we all proceed to the closing and it’s a happy happy day for all!

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Lakes of Indianwood, Oxford Michigan

Lakes Of Indianwood Oxford Michigan Lake Orion MichiganLakes of Indianwood is an upscale subdivision (higher priced, larger homes) covering Orion and Oxford townships in North Oakland County Michigan. The majority of the lots are heavily wooded – some waterfront. There are approximately 90 acres of lakes and streams, 125 acres of wetlands (aka waterfowl habitats), and the Polly Ann Trial runs through the sub.

House ages range from the early to mid 90’s until now, and there are still vacant lots available. The entire subdivision is in the Lake Orion school district. Lakes of Indianwood is serviced by city sewer and community water, underground utilities. There is no duplication of houses throughout the subdivision. The minimum square footage requirements are 2400 for a ranch, 2700 for a one and a half story, and 3000 sq. ft. for a two story home. 65% brick, stone, dryvit or a combination is a requirement on all elevations.

“Back in the day” it wasn’t uncommon to see sales in the $600,000-$900,000 range and even sales over Lakes Of Indianwood Oxford Michigan Lake Orion Michigana million.

2009 there were 14 houses sold ranging in price from $267,300-$459,000. In 2005 the MLS reported 12 sales ranging from $420,000-$839,000 – only 2 houses in 2009 sold for more than the cheapest house in 2005

There have been 16 closings so far this year (as of 9/18/2010) ranging in price from $210,000- $545,000- 3 bank owned and 1 short sale. There are currently no houses pending. As of 9/18/2010 there are 6 houses for sale. None of the houses currently for sale are short sales or bank owned. Asking prices range from $379,900 to $629,900 with the 6th house up for auction asking $4,698,000.

Search for homes for sale in Lakes of Indianwood
Home Buyer Blog

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Home prices in Oakland County and Lapeer County Michigan may be stabilizing (or at least not falling as fast), and if you have been considering upgrading to that home you couldn’t afford 5 or 6 years ago, now might be a good time to consider making that move.

Houses that were selling for $300K are selling for less than $200K. That dream house from 5 years ago that you couldn’t afford may be selling for less than you paid for your current house. Interest rates are low, and if you have a job, some cash and decent credit you can probably get a mortgage. That doesn’t necessarily mean you have to give your current house away. An option many home owners are opting for is to lease their current house after upgrading to that dream home.

You would need to talk to a good loan officer; there may be issues if you are severly upside down on your current mortgage. I believe you would have to qualify for both mortgages- these are questions for your lender. But if you qualify to buy without selling, there is a demand for nice rentals. Half the current market in the North Oakland County and Lapeer areas are short sales and foreclosures. Those ex-homeowners need a place to stay and many won’t/can’t move into an apartment. 

Home prices will come back. It may take some time to hit where we were in the peak years, but it will happen. So why not let someone pay your house payment until prices do come back? Depending on what price range you’re in, it could mean the difference of fifty or a hundred thousand or more in the long run. And in the meantime there are potential benefits to owning rentals (a discussion to have in depth with your accountant).

Please don’t hesitate to contact Jackie Hawley with any questions about selling or leasing your Oakland County or Lapeer County home.

Jackie Hawley
cell: (248)736-6407
email: Jackie@JackieHawley.com

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