How the end of federal programs affects the Ann Arbor real estate market.

With the federal tax credits for home buyers winding down, last week also saw news of the federal government ending their year-long support of the mortgage industry. This government backing helped banks keep mortgage rates at or near historic lows, allowing many first-time home buyers a chance to buy their dream home and existing home owners a chance to refinance or move into a new home.

So what does this mean for Ann Arbor home buyers?

Saavy house hunters in Ann Arbor can still combine low mortgage rates and the federal tax credit program to get them into the house or condo of their dreams! But time truly is of the essence. Federal support for the mortgage industry is slated to wind down at the end of March…at which point interest rates may start to climb again.

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There's still time to benefit from federal tax credits!

Looking to buy your first home? Maybe you already own a home in Ann Arbor and are thinking this might be the year to sell and move into a new home? There’s still time to benefit from federal tax credits for qualified home buyers…but the programs will be ending soon.

Ann Arbor First Time Home Buyers – Now’s the Time!

If you’ve been considering buying your first home in Ann Arbor, time is running out to benefit from the extended $8,000 First-Time Home Buyer tax credit! Qualified first-time home buyers can receive up to $8,000 in tax credits when purchasing a principal residence in Ann Arbor. But buyers only have until April 30, 2010 to get a signed sales contract in place and closing must happen by June 30, 2010.

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Ashley Terrace Condominiums were recently added to the approved FHA list along with several other Ann Arbor complexes.

Several Ann Arbor Condominium Developments have recently been added to the approved FHA list.

FHA will now allow lenders to determine project eligibility, review project documentation, and certify compliance. HUD will continue to maintain a list of Approved Condominium Projects. Some of the recent Ann Arbor Condo developments that have been added to the FHA approved list are as follow:

•    Ashley Terrace Condominiums – approved 11/23/2009
•    Cloverly Village Condominiums – approved 10/29/2009
•    Gallery Park Condominiums – approved 12/21/2009
•    Pittsfield Village Condominiums – approved 6/8/2009

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Affordable Prices Make Ann Arbor Condos Irresistible

Your condominium's financial security is critical to know.

The Ann Arbor condominium market offers a wonderful opportunity to get into the market at very affordable prices.  While there are many excellent opportunities to purchase a condo in Ann Arbor, you need to be certain that the condo that you are interested in purchasing is financially sound.  With the current Ann Arbor market conditions, it is very possible that delinquent fees at condo associations could push a condo association into either raising monthly fees, or even bankruptcy.  Nationally, this problem is more acute at newer developments.  The whole issue of foreclosures is dire and getting worse, and the more foreclosures in a development, the greater the chance that you could be running into problems.

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The Elementary School & Square Footage Equation in Ann Arbor Real Estate Values

When talking about real estate values in Ann Arbor,  people usually talk about the market in general – which doesn’t give the real story.  One trend that I’ve been watching is the price per square foot of sold homes in the different elementary school districts in Ann Arbor. By looking at the attached graph, you will notice that there are large variances  in both price per square foot of sold homes , as well as the change  in values from 2005 to 2009.    We can begin to see that certain areas of the Ann Arbor real estate market are beginning to recover.

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NAR just came out with a report which shows that Nationally, sales in November 2009, climbed 44.1% compared to the same month last year.  There was a lot of variance around the country.  The sales rate rose 53.5% in the Midwest, 52.7% in the Northeast, 44.8% in the South, 28.1% in the West when compared year-over-year in November.

Good News for Homes Inventory

While the meduim sales price was down 4.3% to $172,600, the good news is that the month’s supply of resale homes was down 40.9% in November 2009, compared to November 2009. It now sits at 6.5 months.

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As we head in 2010, the Ann Arbor Condo market looks like it may finally turn around.  There are several trends that are supporting this.

Ann Arbor Condo Inventory

Over the past 2 years inventory has decreased from a high of 990 condos for sale in June, 2007 to 347 as of Dec 20, 2009.  There has been a 55% drop in inventory when comparing December, 2007 to December 2009.  Of course, the less inventory there is, the more competition sellers have for their condos.  In this same time period demand has dropped 25%.  Even though demand is dropping, it’s not dropping as fast as the inventory which tells me that the market is strengthening.  This can also be seen in the months supply of condos.  More than 8 months supply of inventory indicates a buyers market.  Less than 5 months indicates a seller’s market.  Currently there is a 9.2 month supply of condos for sale in Ann Arbor.  This is down signifincantly down from an 18 month supply just 2 years ago.

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The Ann Arbor Real Estate Market is showing signs of recovery under $300,000.    One of the best indicators to watch is the months supply of housing.     Generally speaking, when the months supply of housing gets over 8 months, there is downward pressure on price.    Currently in Ann Arbor below $300,000, the months real estate supply ranges from 4.7 – 7 months.

Contrast that with the higher range of the market where once you get above $500,000, the months supply of housing is consistently over 15 months, and goes all the way up to 83 months once you get over $1,000,000.

Other Positive Signs of Ann Arbor Area Real Estate

Another indicator to watch is the Activity Index (AI) – which is the number of homes that are currently for sale which are under contract to close.  A number over 20% indicates activity that is generally seen in a seller’s market.    Under $300,000, the AI ranges from 25% – 40%.     The Northeast part of Ann Arbor  (bounded by US23, M-14, Pontiac Trail and Plymouth Rd)  shows even better signs of recovery, where 66% of all 2 story homes are under contract – an extremely healthy sign for a recovering market.

As we watch Ann Arbor area real estate trends, you will notice that the numbers for homes under $300,000 are better in August than July, however, once you get over $300,000 the numbers aren’t improving.    Hopefully as the market firms up in the lower end, we will begin to see a ripple effect up through the price ranges.

Staying Positive

I feel confident that we are at a turning point in the market.    For a long time, consumers have felt that the future was going to be worse than today.    For the first time in over a year, I sense that consumers are finally beginning to feel that the future will be better than today.    Once that thinking starts to take off, consumers will gain the confidence that will allow them to make large purchases, and the market will begin it’s slow recovery.

Contact me, your Ann Arbor area real estate expert when you are ready to learn more about purchasing and selling real estate in Washtenaw County.

Attention Ann Arbor Area Home Buyers!

There is a big push to pass a bill that would give home buyers a $15,000 tax credit, regardless of whether or not they’re first time home owners or their income.  Seeing how the housing crisis led us into this recession, it will lead us out of the recession, and it’s critical that every means possible is used to jump start the housing market.

It’s very interesting to note that national statistics indicate that each home sale generates $63,000 worth of commerce in the local community. This includes the fees that are paid to Real Estate Agents, banks, title companies; the purchases most new homeowners make when they move into a house such as curtains, appliances, furniture, etc; and the ripple effect from all of that spending that spreads throughout the local economy. Read the rest of this entry

You may think that we here at The Bouma Group are only passionate about helping folks buy and sell Ann Arbor Real Estate. While that is our main goal, we are also committed to providing people with information about the Ann Arbor Area -  and what better way than through photos! We are excited to have started a brand new photo blog that showcases all things Ann Arbor from local icons to restaurants to special events. Take a look at the Ann Arbor Photo Blog and let us know what you think.

Not only do we love sharing our ‘view’, we want to see what your Ann Arbor looks like. So, please email us your best photos of what this city is to you. We want this photo blog to become a great resource for people who already live here or are planning to relocate. Send your photos, along with a short description, to us at info@bouma.com.

Be sure to check our new Ann Arbor Photo Blog regularly, as we are constantly updating it with new and exciting photos.

-Martin