Real estate recovery: 2012 Washtenaw County home sales up 9.2 percent
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Alex Milshteyn of Howard Hanna, pictured outside a house for sale on Enclave Lane in Ann Arbor, said the 2012 real estate market in Washtenaw County was "very dynamic."
Courtney Sacco | AnnArbor.com
Home sales in the county increased 9.2 percent over 2011, while the average home sale price showed steady improvement for the fourth consecutive year.
Ann Arbor Area Board of Realtors 2012 home sale data
The average sale price increased in 8 of 9 school districts tracked by AABOR
- Chelsea: 4 percent gain
- Manchester: 4.77 percent gain
- Dexter: 18 percent gain
- Whitmore Lake: 20.36 percent gain
- Saline: 10.5 percent gain
- Lincoln: 5.64 percent gain
- Milan: 2.8 percent gain
- Ypsilanti: 16.84 percent gain
- Ann Arbor: 2.2 percent loss
Year-end data compiled by the Ann Arbor Area Board of Realtors show there were 3,340 home sales in Washtenaw County last year, with an average home sale price of $210,616. The average number of days on the market was 69, compared with 79 days in 2011.
“2012 was a very dynamic market for us,” said Alex Milshteyn of Howard Hanna Real Estate Services, formerly Edward Surovell Realtors. “We’ve kind of come out from this cloud we were under for a while there.”
Matt Dejanovich of Real Estate One agreed, saying: “We’ve returned to low inventory, high demand, increasing average sale price and lower days on the market. All of that is making for a great environment to be buying and selling houses.”
Some key points from 2012 Washtenaw County housing data:
- Total dollar volume of residential sales increased 18.3 percent in 2012 compared with the previous year, reflecting increased activity and higher sale prices.
- Since 2009, the average home sale price in Washtenaw County has increased by 15.5 percent.
- The area with the highest average sale price was the city of Saline at $303,898.
- The area with the lowest average sale price was Ypsilanti at $96,636.
- Sales of condominiums in 2012 were up 12.7 percent over 2011.
The Washtenaw County data is indicative of some national trends; total home sales in the U.S. was up 9.2 percent this year over 2011, and also the highest in five years, according to the National Association of Realtors.
To be sure, the residential real estate market is still in recovery and home sales aren’t where they were a decade ago when the average sale price in the county was $259,000. Still, of the nine markets tracked in Washtenaw County, average sale prices increased everywhere except Ann Arbor in 2012, which was down $6,000 from 2011.
“Prices are definitely strengthening; prices have increased and values have stopped dropping,” said Elizabeth Brien of Charles Reinhart Company.
Dave Lutton, president of Charles Reinhart added: “Prices are still — across the board — down 20 percent from what they once were.”
“I believe we’re going to see gradual improvement,” he continued, “but it may be 15 years (or more) in many areas before we get back to 2004 levels."
The biggest challenge Realtors and buyers are reporting right now: low inventory levels due to a recovering economy and extremely low interest rates. Finding rental properties also is getting more difficult with low supply and increasing prices.
“The inventory levels are as low as I’ve ever seen them in Washtenaw County,” said Real Estate One’s Wayne Esch. He said there are currently 754 residential homes and 133 condominiums available in the county, whereas a decade ago, Esch said there would be anywhere from 1,600 to 2,600 homes for sale.
Realtors report low housing inventory with more buyers looking for properties in Washtenaw County.
File photo
“The inventory is half of what it was 10 years ago,” he said.
What does that mean for buyers?
Competition is high for houses and people are getting into bidding wars, sometimes above the listing price. Milshteyn said he’s receiving multiple offers on properties and his houses were only on the market for an average of 12 days last year.
“If you procrastinate or think too long or think you can offer a seller 10 percent below asking price on a perfectly good house, you’re going to be frustrated because you’re not going to get the house,” Dejanovich said.
Lutton added: “Buyers have to be prepared to act, have gotten a start on finances and make the most competitive offer they can.”
Other concerns in the real estate market include appraisals and foreclosures, although foreclosure activity in the county is declining. Michigan is ranked 7th nationally in the number of foreclosures, with one in every 732 housing units receiving a foreclosure filing in December 2012, according to Realtytrac. That’s an improvement over the one in every 282 filings in December 2010.
In many cases, Realtors report, appraisals haven’t caught up with what the buyers are willing to pay.
As for new home construction, Lutton said it’s returning to the county because of the low inventory levels.
Washtenaw County permits for single-family home construction totaled 307 in 2012, up from 158 in 2009, according to data compiled by the Southeast Michigan Council of Governments. However, that number is still significantly lower than the 1,167 permits submitted in 2005.
With the busy spring real estate season just around the corner, Brien is predicting the market will continue to improve.
“I think we have more buyers coming in,” she said. “Obviously, employment is changing, automotive companies are doing so much better and there’s a lot of other job opportunities…I think we’re going to continue to see that this year, and we should have a very solid year of real estate.”
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
Fresh Start
Tue, Jan 29, 2013 : 12:06 a.m.
Remember you need a two-fold increase to counter a decrease of the same percent. For example, if you have a $200,0000 house that decreases in value by 30% (or $60,000) and is now worth $140,000 you need a 60% increase to put you back to being even. Guess 9.2 % is good if you bought in 2009-2010 but, if not, its probably not too much to get excited about.
a2girl
Sun, Jan 27, 2013 : 10:39 p.m.
Under Dog Guys comment, Basic Bob wrote: "Back in 2000, we sold a house to a family who could not qualify for a mortgage. Our clever realtor convinced them to pay full price for the house while we gave them back $7k that they could use at closing as a down payment. Of course she earned her commission on the full amount including the $7k. I will never again believe that a realtor is working for the client. They are working for the commission." I submit that this practice is more sever than what Bob is describing. I recently noticed several property transactions reported on a2gov.org that indicate "sale price" and "adjusted sale price." Perhaps I am misinterpreting what these numbers indicate, and I invite someone to explain what these numbers mean if I am incorrect, but I would think that the adjusted price is what the buyer is paying after money is given back to them by the seller at the close. If this is the case, I applaud the city for including this information. I have found several transactions (without trying very hard) that indicated substantial amounts given back at the closing. Anyone that has bought and sold houses knows that there is pressure to include some money in the sale price for closing costs, small repairs, etc. But some of the amounts that I have seen are so significant that it makes me think that someone needs to write an honest article about real estate values in Ann Arbor.
say it plain
Mon, Jan 28, 2013 : 1:05 p.m.
hmm, very interesting observation indeed! I wouldn't for a second doubt that this is actually an official strategy of the RE people in town; perhaps even being suggested often as a 'deal-sealing' proposal by agents. I'd love to see more about that...what a great 'market-enhancement' technique all around! Encourage a sale *and* make the numbers for price trends look better! Then come on-line and in-print (where still available ;-) ) and tell about the recovery and go on about how people better move it or lose out, perfect!
Tom Todd
Sun, Jan 27, 2013 : 10:32 p.m.
prices will be below the all time high for at least fifty more years!
conundrummy
Sun, Jan 27, 2013 : 5:55 p.m.
I recommend people try to sell as for sale by owner to help recoup any loses they may have to deal with due to the bubble burst. There are plenty of online services and info to achieve this.
justcurious
Sun, Jan 27, 2013 : 9:40 p.m.
Or if you don't want to totally go it on your own there are companies like Help-U-Sell. We used them years ago and were happy.
sHa
Sun, Jan 27, 2013 : 6:57 p.m.
Great recommendation! Realtors don't have exclusivity to information. It's all on-line now. If the market is truly as dynamic as the agents are claiming, it would definitely be more profitable and worth the effort to do things on your own.
MRunner73
Sun, Jan 27, 2013 : 5:07 p.m.
The simple fact is that anyone who bought a home during the bubble years whether they got could afford honestly a mortage, paid top dollar. Not to mention the interest rates back then. So, for those who are underwater because of that and are planning on selling in the next few years, are likely to see the affects of the loss. It is indeed a good time to be a buyer and a seller if the home was bought more 20 years ago.
missy
Sun, Jan 27, 2013 : 4:11 p.m.
Couple of things, full disclosure...I am a Licensed Broker, the hardest part of the recovery which is effecting "all" of Washtenaw County...not just A2 is the buyers not understanding at this point in time, that they are not getting to negotiate "much" and they have to jump quickly. Some buyers are having to write multiple offers to finally get under contract. I have the graph of the other area's on my blog, if anyone wants to look. http://www.annarborrealestatetalk.com/december-homes-sales-up-from-2011/
say it plain
Sun, Jan 27, 2013 : 6:57 p.m.
I love it when real estate agents try to tell us that buyers need to move quickly. That they are 'messing up' the market by not jumping quickly enough...how is that messing up the recovery?! It might be affecting (not effecting) your ability to get as much money quickly from your buyers, because maybe people still think prices are too high. I love it when interest rates go down and asking prices go up so that mortgage-payment-per-month stays about the same, that's a funny bit too. Full disclosure--it's obviously totally in the interest of the RE people to get folks to think they'd better quick quick quick make big decisions or else 'lose out'. That's one of the BIG things that created a real estate bubble in the first place, and there is apparently *never* any disincentive for RE "professionals" to avoid creating the next one...
Tom Whitaker
Sun, Jan 27, 2013 : 3:42 p.m.
I wonder what the problem was with Ann Arbor? Is this proof that other towns and townships in the county were more attractive than Ann Arbor was to home buyers? Is all the attention paid by the City on anything and everything DOWNTOWN, causing our neighborhoods to be ignored and services neglected? Ann Arbor has spent millions on a greenbelt that appears to only be making the rural areas more attractive to home buyers who know the bucolic nature will be preserved, courtesy of the City of Ann Arbor taxpayers. Meanwhile, we continue to spend millions on commuter transit schemes to help those township residents live in the townships and small towns, but work in Ann Arbor. Don't get me wrong, I'm in favor of preservation of land and open space, and I also think mass transit is more efficient and desirable than single-occupancy-commuter vehicles. But we'll only achieve environmental efficiency or "sustainability" when we have a city where people of all ages and family situations desire to live closer to work, shopping and amenities, using pre-existing infrastructure. We need first-rate schools that are well-funded, police and fire departments that are fully staffed and equipped, quality roads and other infrastructure, and reasonable taxes and fees. We need our residential neighborhoods to be seen as better places to live than township subdivisions or small towns 5 to 20 miles away. I'd like to challenge the mayor and city council to stop focusing on downtown, on out-county commuters, and our main drags (N. Main, S. State, Washtenaw), and to start looking to improve the desirability of our city's residential neighborhoods. The University needs to step up and help, too, providing incentives for staff and faculty to buy houses in town. Seems, in the long run, that would be far cheaper than buying houses just to tear them down for multi-million-dollar parking structures.
justcurious
Sun, Jan 27, 2013 : 9:37 p.m.
I agree with Mike. Some of us just don't want to deal with constant traffic noise, tiny yards, people on top of people and the generally stressful nature of city living. I can breath cleaner air, see more stars and hear and see more of nature out here in the boonies. Ann Arbor is fast becoming the problem laden metropolis that the city leaders want it to be. Fortunately we have alternatives to going into town out here.
timjbd
Sun, Jan 27, 2013 : 5:35 p.m.
Mike, If parking downtown were free, you'd have nowhere to park because downtown residents would take all the spots. If what you want is unlimited free parking, then get your meals at Walmart. Which I suspect you may already do. It's the way loosy-goosy "conservatives" choose to live, right?
Mike
Sun, Jan 27, 2013 : 4:38 p.m.
Who wants to live in a city where you have to pay to park if you want to eat dinner or go shopping? You can't leave your car parked on the street while you're on vacation or it will be Impounded. Property taxes are out of control while services are lacking. The city manages to get on list after list of the best places to live but many of these lists are self-promoting. I'll take the solace and serenity of the country without all of the uptight, rules oriented, liberals any day...............
justcurious
Sun, Jan 27, 2013 : 3:26 p.m.
It is interesting that Ann Arbor is the only place listed with a negative number. I wonder if that signifies that less wealthy communities are attracting more buyers?
Basic Bob
Sun, Jan 27, 2013 : 3:54 p.m.
It indicates that Ann Arbor (School District) is still overpriced compared to the rest of the county. I wonder if the township parts are faring any better than the city?
Dog Guy
Sun, Jan 27, 2013 : 2:13 p.m.
Realtors always try to infect us with optimism.
timjbd
Sun, Jan 27, 2013 : 9:53 p.m.
Like any profession, real estate has good people and less-good people. Some of my best friends are realtors and I'd trust them with anything. As for infecting you with optimism, every profession that involves sales tries to make the case for their products. If they have a product they believe in, all the better. Why shouldn't they be optimistic? Agents often put in many, many hours trying to find the right house for their clients and often come away with nothing to show for it. You'll see when you try to sell your own house that what they do is not easy. In a hot market, some houses "sell themselves" but still don't do the paperwork, title searches, inspections, arrange showings, etc, themselves. Caveat emptor.
sHa
Sun, Jan 27, 2013 : 6:46 p.m.
"it's pretty standard practice to get money back from the seller to cover closing costs, etc." That happens in a buyers' market; not usually the case in a sellers' market.
Westfringe
Sun, Jan 27, 2013 : 6:23 p.m.
Bob that it's pretty standard practice to get money back from the seller to cover closing costs, etc.
Basic Bob
Sun, Jan 27, 2013 : 3:51 p.m.
Back in 2000, we sold a house to a family who could not qualify for a mortgage. Our clever realtor convinced them to pay full price for the house while we gave them back $7k that they could use at closing as a down payment. Of course she earned her commission on the full amount including the $7k. I will never again believe that a realtor is working for the client. They are working for the commission.
sHa
Sun, Jan 27, 2013 : 3:19 p.m.
"If you procrastinate or think too long or think you can offer a seller 10 percent below asking price on a perfectly good house, you're going to be frustrated because you're not going to get the house," Dejanovich said. I agree, Dog Guy. Never trust a realtor. They will say whatever is necessary to close a deal, and it is not always in the best interest of their "client".
JimmyD
Sun, Jan 27, 2013 : 1:32 p.m.
I just hope that no one posts "but my house isn't worth what it was in 2006". That was a bubble folks. Nothing but froth piled on top of no-doc liar loans.
justcurious
Sun, Jan 27, 2013 : 3:24 p.m.
No PLGreen, some of us were duped by our banks into thinking our homes were worth a lot more than they really were. Banks lent us home improvement money on THEIR inflated values and we believed them. They came out smelling like a rose while many of our dreams of paying off our homes died.
PLGreen
Sun, Jan 27, 2013 : 2:18 p.m.
I couldn't agree more. People were buying and flipping homes that had no business doing so. People who took out mortages that they could not afford, only have themselfs to blaim.
Stephen Lange Ranzini
Sun, Jan 27, 2013 : 12:42 p.m.
This is excellent news not just for struggling underwater home owners, but on many levels: it's good for government budgets, local businesses, job growth, and getting the moribund home building industry back on it's feet. This article and a related MLive one notes that the population of Washtenaw County rose 3,171 (0.9%) during 2011 to 347,962: http://www.annarbor.com/news/washtenaw-county-sees-09-population-growth-in-2011/ This is just 741 below the growth expected in the entire 10 years from 2010 to 2020, when the population is expected by SEMCOG to be 352,616. At this pace of growth, if sustained, the county could meet SEMCOG's 2040 population projection of 384,735 by mid-2021, 19 years early.
Tom Whitaker
Sun, Jan 27, 2013 : 5:11 p.m.
There's still plenty of land available for development--all the various land conservation programs combined make up only a small fraction of suitable development land in the county. Also, what little "resistance to vertical development down town" exists has not stopped or even slowed the construction of high rises and several more are on the way. The city has greased the skids for residential development downtown, but unfortunately, the only thing being built is student housing. It's a false premise that downtown high rises draw people away from buying houses in Dexter, Whitmore Lake, or Saline (even if the high rises being built weren't solely designed and marketed for students). The Ann Arbor alternatives to Dexter, Whitmore Lake and Saline are found in our various neighborhoods, from the historic homes near downtown, to the 1950's and 60's tract housing further out, to the infill condos sprinkled throughout the city. Some speculate that student high rises will absorb enough of the student population to open up opportunities for families and young working people to buy former student rentals to live in (that is, if the University would stop over-enrolling students). This will only happen if the City, the University, and maybe some of the larger private employers step up to help make this both possible and desirable.
Mike
Sun, Jan 27, 2013 : 4:28 p.m.
The one problem I see is that with this growth and the resistance to vertical development down town and the development control measures in place (green belt) around the city perimeter that where to house all of the people. No wonder Dexter, Whitmore, Saline, and other surrounding communities are seeing their prices increase faster.