Jeff Duneske's Blog

A question I have been asked more and more is do foreclosures affect house values. In the most simplest answer, yes. The question is how much do they actually depreciate the market. The scenario that is happening more and more is this...

Majority of all homes in metro Detroit are purchased by a means of financing with a new mortgage. Every lending institution requires appraisals to justify the value of the property. What has happened over the past 18 months is with the declining house values and increasing low foreclosure sales being recorded, many homes that were purchased 1-3 years ago are not worth what they were bought for. Now with the ARM (Adjustable Rate Mortgage) adjusting, this is the wicked cycle that continues on a daily basis and home owners cannot refinance for what they own on the property and for many home owners, they cannot afford their mortgage payment and in many cases, the foreclosure cycle continues. Banks inherit these homes and and they want to clear the bank debt and will lower these homes 10-20% below market value to sell them quickly.

The cycle continues and until the foreclosure rate slows down, the market will continue to struggle with this issue. Granted, not all communities are as hit with foreclosures as others. That is why you need a real estate professional to consult with you on this very important issue.

Being an active member on the Government Affairs Committee with the Western Wayne Oakland County Association of Realtors, I read today that a vehicle bill, HB 5198, that would allow for a sales tax on services passed the House late last night and is headed over to the Senate.

Being an active real estate salesperson in the Novi and Metro Detroit real estate market, the last thing we need is a tax that would effect the real estate market and industry. With 1 in 88 homes being in some form of foreclosure in Metro Detroit, the last thing we need is a tax on real estate salespeople, title insurance and all other real estate services, that would more then likely be passed on to a already struggling home seller that is attempting to come to the closing table with at best case scenario, no out of pocket cash to sell their home.

I hope you will contact your senator to help keep this bill from going any further and help this already bruised Michigan real estate market. You can find out who your Senator is by visiting this link below. Thank you!

http://www.senate.michigan.gov/FindYourSenator/michiganfys.asp

Many of my clientele come from home sellers that either tried selling their home by owner and have decided to hire a professional real estate agent like myself or home sellers that are listed with a real estate agent and after 3, 4, 5, 6 months did not sell and their listing contract expires and they decide to put their home back on the market with another real estate agent like myself.

The most common question I am asked is "Why did my home not sell?".

There are three very crucial factors why a home will not sell, whether it is here in Metro Detroit or any real estate market in the country.

The first reason why a home does not sell is price. Here in Metro Detroit, with there being such a large inventory of homes on the market and fewer buyers, homes must be priced to SELL. Buyers want a bargain, and do not want to pay market value. Many buyers are skeptical that the market may be still on a down turn and want to make sure if they buy, there is enough room for a depreciation to take place in the market, yet not loose any money on the original purchase. You must price a home to SELL! I have always advised my selling clients, price your home ahead of the market and not chase it with price adjustment after price adjustment. At first this may seem like you are loosing money, but I always advise my clients to take the market average, and price the home anywhere from 3-5% percent below the average. Buyers are smart and they will see the good deal on your home and will ultimately come to view your home and eventually make an offer. Price your home to sell with the professional advice of a real estate expert like myself.

The second factor in why a home will not sell is condition of the home. Buyers very seldom will want to inherit your problems, to-do's, or home improvements in the works. If it means taking a few extra weeks to get your home to be in great condition, do it. Once your home is the market you can never take back the time it is on the market nor can you very seldom get that second chance to impress the buyers with a second viewing. Stage your home to sell with the professional advice of a real estate expert like myself.

The third and most important factor in why a home will not sell is marketing. It is so crucial that if your home is not seen, no matter how well it is priced or how well the condition is, if your home is not seen, it will never sell. Never rest on thinking that just putting your home on the MLS will sell your home. Many discount brokerages say that all you need is MLS exposure to sell your home. That is the furthest thing from the truth in this metro Detroit housing market. With over 80% of home buyers searching on their own on the web before ever contacting a real estate agent, it is crucial that your home is placed in the top real estate websites along with high definition virtual tours and multiple pictures to show off your homes features.

With the proper consulting, your home can have all of these factors work in your advantage. If one of these factors are not correct, it will result in your home not selling. I always tell my sellers, I can give you advice on how to price your home and stage it to show wonderfully, however these two items are out of my control if you do not take these suggestions and act on them. I have sold over 95% of all of the homes I have ever placed for sale and I would love the opportunity to help accomplish your home selling goals.

In Forbes.com over the weekend, Detroit Area received a mark of being one of the most affordable housing markets in the country. Detroit was actually ranked number three on the list, to follow Indianapolis and Cleveland. The median home price is $154,600.

"Affordable markets are in a better position for a strong recovery, because more buyers can come in once prices fall," says Mark Zandi, chief economist at Moody's Economy.com.

The skeptics might cry "Rust Belt!" here and point out that the Detroit market is not exactly healthy. This is certainly the case here in Detroit, which has suffered from massive subprime lending practices, emigration and poor local economics; prices there are affordable as a partial result.

Most importantly, we need job growth and increased wages so that we can have more buyers purchase homes and help recoup the Metro Detroit housing markets value. With the great housing buys, this should help attract more people back into the metro Detroit area.