Random Clapper

Life After the Tax Credit:  Some thoughts from a Michigan Realtor® Round table

Remerica Hometown One, a Michigan based real estate company recently held a Realtor® round table to discuss life after the home buyer tax credit.  Here is a brief synopsis of the discussion:

Well, here we are almost 30 days after the end of the Home buyer Tax Credit, with the big questions being, how will the next 30 days go?  How will the summer real estate market be in Michigan's Metro Detroit and Ann Arbor Area?  The Hometown One round table came up with a few thoughts...

• - There may be a "mini correction" over the next 45 days, due to home buyers expediting their purchases to receive the tax credit, leaving a void of buyers for a brief time. This will only be a short vacuum followed by a slow, constant recovery: Kind of like watching a rusty clock move!
• - We may see an increase in inventory, but as we have discovered, many areas are seeing a lack of saleable listings, causing multiple offers, and a pent up demand from buyers. Whether this new inventory is from foreclosures or human controlled transactions, this inventory increase may pose very little negative impact and may be devoured by the current buyers in the market.
• - Appraisals are still a concern. There are adequate comparatives in most price ranges to prove a slight increase in value around Western Wayne and Oakland County, Washtenaw County, etc., yet the appraisal problem rears its head on an estimated 40% of current transactions. Why is there so much pressure to the down side when it's obvious there is some upside pressure? It's not that complicated, appraisers need to determine "market value" not "bank value"!
• - Jobs will still play a role in the real estate recovery in Michigan. The news is getting better on this front. It's about time! It was suggested that Michigan will be the recovery hero to the Country! Boy I hope that comes true!
• - Interest rates are the lowest in 50 years. Getting a home on a 4.5% fixed rate for 30 years compared to 6.5% of a year ago, gives you 3-5 home buyer tax "credits". These lower rates may do more to help the market stabilize than the tax credits. The funny thing is, rates were supposed to go up, but the European flock to safe harbor bonds has really been great for (at least) real estate!
• - Elections: As we head toward November, wow, who knows, but the Round table did think that the elections will at least have an effect on the psyche of today's home buyer and seller.

Well that's all from the most recent Remerica Hometown One Realtor Round table.  I know this is a basic "in the trenches" outlook, but that is where our clients and we live, in the real world. Our community is probably just like your community. "Street level" where we are going to solve our problems and challenges!  We would love to hear your thoughts.