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.

The Ann Arbor real estate market has been besting national trends with an increase in home sales over the winter months this year versus last with no wild jump nor dip in prices. The condo market in Ann Arbor over the same time saw prices drop which resulted in a surge of contracts.  Recently several condo complexes were added to the FHA approved list however, FHA will no longer along spot approvals for condos, which will limit FHA financing for many condo complexes. 

With strategic market placement, sellers have a much broader base of potential buyers for their Ann Arbor home or condo while rates are still so low and tax credits are still available. Again, with an increase in home sales over the winter, Ann Arbor home sellers are reaping the benefits of these federal programs that at first glance seem to primarily aide home buyers.

Until Next Time -

Martin

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.

New income limits apply now, as well: The extended & updated Worker, Homeownership, and Business Assistance Act of 2009 now has income limits of $125,000 for single taxpayers while married couples filing joint returns have a limit of $225,000. These are significant increases from the program’s original income limits of $75,000 and $150,000 for single and married taxpayers, respectively.

But What If I Already Own a Home in Ann Arbor?

Great news – there’s a tax credit available to you, too! Existing home owners aren’t being left out of the revised Worker, Homeownership, and Business Assistance Act of 2009. Qualified existing home owners can receive up to $6,500 in tax credits if they opt to buy a new principal residence on or before April 30. Again, the signed contract must be in place by this date and the closing must happen by June 30.

To find out how you can benefit from either of these substantial tax credits before they expire, give me a call at (734) 761-3060  - I’d be happy to talk to you about it and answer any questions you have about buying your first or next Ann Arbor home!

Until Next Time-

Martin

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

This is excellent news, as 100% financing has all but disappeared and FHA is the only avenue for low down payments.   Since many Ann Arbor Condo buyers are first time home buyers, and graduate and medical students, coming up with a down payment is often a problem.  As more financing options become available for these buyers, it increases the buyer pool for condominiums.

The complete list of approved Ann Arbor Condo’s is as follows:

• Pattengill Condos
• Walden Hills I Condos, Walden II Condos
• Weatherstone Condos
• Parkside Condos
• Landmark Pines Condos
• Georgetown Commons Condos
• Earhart Village Condos
• Chapel Hill Condos
• Brentwood Square Condos

If you are interested in purchasing a condo in a complex that is not on this list, you will have to go through spot approval.  

For any further information regarding FHA financing for Ann Arbor Condominiums, call The Ann Arbor Condo Specialists – The Bouma Group at 734-771-3060 or email us at info@bouma.com.   For more information about Condo’s for sale, or sold prices in Ann Arbor visit www.condohotline.com/annarbor

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.

Nationally, condominium owners are being pushed against the wall financially by their neighbors who are unable to pay the monthly dues.  As foreclosures, job lose, and financial troubles force more and more owners to stop paying their monthy fees, this problem will only get worse. Luckily, in Ann Arbor, this problem is not very prevalent, and hopefully, the demand side of the market will prevent it from becoming a common problem.

Do Your Homework Before Buying an Ann Arbor Condo

As a buyer for a Ann Arbor condominium,  I strongly recommend that you have your Realtor protect you by checking into the following items:

1. Ask for a copy of the most recent financials so you can check the reserves, and see how many fees are outstanding.
2. Check how much foreclosure activity is going on in the complex.
3. Verify the number of rentals in the complex.  If more than 10% of the units in a complex are rented out, financing can become a problem.
4. Verify if the complex can be financed by FHA.  This is important as many first time buyers don’t have large down payments.  If the complex you’re interested in is not FHA approved, you will be eliminating a large pool of buyers.

Owning an Ann Arbor condominium can be a very rewarding experience – especially with todays prices, interest rates and the tax credit.  For more information on how you can buy an Ann Arbor condominium, call The Bouma Group at 734-761-3060 or email us at info@bouma.com. We are the Ann Arbor Condominium experts. To see what’s available for sale in Ann Arbor go to www/condohotline.com/annarbor

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.

Ann Arbor Market Change in Last 12 Months

One exciting trend to notice is that homes in the Angell, Lawton and Lakewood school districts have actually seen an increase in value over the past year.  Values in Dicken have remained the same over the last year, while the other 14 districts still recorded a drop in value.  The largest drop in value occured in the Mitchell with a drop of 18% over the past year.

For all of Ann Arbor, prices have dropped  6.63% over the past year, based on MLS data on price per square foot.  Five districts did better than the market, and 13 districts did worse.  The average price per square foot in Ann Arbor was $131.07/SF.

Ann Arbor Market Change in Past 5 Years

Looking back 5 years, prices have dropped anywhere from  -40.52% in the Mitchell school district, to a low of -7.02% in the Angell school district.

For all of Ann Arbor, prices dropped 24.82% over the past 5 years, with 7 districts faring better than the general market and 11 faring worse.

What causes these variances? Generally, it’s supply and demand. In the districts where demand is strong, inventory is low, which cause prices to firm up.    In the districts where we’ve seen the largest drop in values, we are also seeing a higher number of foreclosures.

When looking to purchase or sell a home in Ann Arbor, you can’t generalize.  You need to look at what’s happening in the school district that you are wanting to buy or sell in.

With the market constantly changing, feel free to call Martin Bouma at 734-761-3060 or email him at bouma@bouma.com for an update in the area that you are interested in.

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.

Data from DataQuick Information Systems found that the medium price of resale homes and condos rose in 102 of 362 cities and communities over the past year.

Ann Arbor Home Sales are Up

Locally in Ann Arbor, single family home sales were up by 49% with prices staying essentially the same when comparing November 2009 to November 2008.    Price/SF was up slightly, while the average sales price was down to $265,549 from 272,000 in 2008.

Condo Sales Surge, Prices Drop in Ann Arbor

Ann Arbor Condominiums showed a completely different picture. Unit sales increased by 300% when comparing November 2009 to November 2008. However, prices dropped 26% in that same time period. The average sales price dropped from $206,166 in 2008 to $131,669.

For the full article go to http://www.inman.com/news/2009/12/22/nar-home-sales-spike-in-november

Let us know what your thoughts are about the market in Ann Arbor.  For any further information don’t hesitate to call Martin Bouma at 734-761-3060 or email him at bouma@bouma.com

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.

Condo Prices in Ann Arbor, MI

We have seen prices decrease 25% since 2007, which is creating some of the best condo pricing we’ve seen in years.  The effect of foreclosures may put continued downward pressure on prices, however, with demand catching up to supply, and investors stepping into the market, prices should stay firm.

Tax Credits & Buying a Condo

First time homes buyer’s qualify for an $8,000 tax credit, so long as they purchase their condo by April 30, 2010 and close by June 30, 2010.   There is also a tax credit for repeat home buyers of $6,500.  There are restrictions, so feel free to call us for the details.  This will definately give the Ann Arbor Condo market a shot in the arm for the first 4 months of 2010.

Historically Low Interest Rates

Interest rates are still at historically low rates, ranging in the 4.5-5% range.  Keep in mind that should interest rates rise just 1%, the mortgage amount that a buyer qualifies for goes down by 10%.  This translates into 10% less buying power.

Short of a major shift in the economy, all of the indicators are pointing to 2010 being an excellent year to purchase your Ann Arbor condo.  Seldom is there a time where every factor that controls price is lined up so perfectly.  Interest rates are low, inventory is the lowest in years, prices are the best in years, plus the government is offering a tax credit.

For more information about purchasing an Ann Arbor Condo, call the Ann Arbor Condo Experts at 734-761-3060.

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.

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.

I encourage everyone to contact their Senator and Representative in Washington to encourage them to pass this bill should it come to a vote. In my opinion, a $15,000 tax credit is well worth the $63,000 of local economic activity that is created with each average home sale, not to mention the benefit to the home buyer.

If you would like to know more about the $15,000 tax credit and buying an Ann Arbor Home, give me a call, I’d be happy to talk to you about it!

Until Next Time-

Martin

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