“All indicators point to this spring being the busiest since 2006.”

A few weeks ago, Jonathan Smoke, the Chief Economist at realtor.com, exclaimed: “All indicators point to this spring being the busiest since 2006.”

Now, Freddie Mac has doubled down on that claim and is saying that 2016 will be the best year that the real estate industry has seen in a decade. In their March Housing Outlook Report, Freddie Mac explained:

“Despite the challenges facing the housing market, we expect this to be the best year for housing in a decade. Home sales, housing starts, and house prices will reach their highest level since 2006 according to our latest forecast…Challenges remain, with low housing supply and declining affordability being a key concern in many markets, but on balance, the housing markets in the U.S. are poised for the best year since 2006.”

The key indicators that have given Freddie Mac such a positive outlook are:

• Low interest rates
• A resilient labor market
• An increase in household formations
• A projected increase in newly constructed homes

Bottom Line

2016 looks to be shaping up as a great year for residential real estate. Whether you are thinking of buying or selling, now may be the time to sit down with a real estate professional to discuss the new opportunities that are arising.

Michigan home prices rose 9% in January vs. 2014

JC Reindl, Michigan.com12:29 p.m. EST March 3, 2015

Homes prices across Michigan were 9% higher in January than a year earlier, outpacing the national 5.7% rate Michigan experienced the biggest

Michigan's real estate market has continued to improve in the new year.

Homes prices across the state were 9% higher in January compared to the same month a year ago, outpacing the national 5.7% year-over-year increase, according to new housing numbers released today by California-based real estate data firm CoreLogic

The data also shows that Michigan home prices remain 17.3% off their peak reached in late 2005. The nationwide figure was 12.7% below the April 2006 price peak.

The CoreLogic report did not specify actual prices or draw comparisons. The closely watched Standard & Poor's/Case-Shiller Home Price index has home prices in metro Detroit about 41% below the national average.

CoreLogic predicts that nationwide prices will rise 5.3% between this January and January 2016.

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.

Consumer sentiment remains strong in January; touches 11-year high

Submitted by Chelsea Polachuk, Uncover Michigan, on Fri, 01/30/2015 - 17:18

U.S. Consumer sentiment in January remained strong and touched 11 year high. The strong consumer sentiment has been helped by lower oil prices, job growth and positive news about economy. Most of the big companies in the United States have reported positive results and many of them might consider wage hikes.

The University of Michigan final consumer sentiment index touched 98.1, marking a strong positive move from 93.6 in December 2014. The consumer sentiment has reached a level last seen in January 2004.

Americans expressed positive outlook for the economy and jobs market in near future. The consumer spending remained strong during the holiday season. Online retailer Amazon has reported better-than-expected results. Apple has reported strong quarterly results as the company managed to record impressive sales for iPhone 6.

The University of Michigan survey also gauges the current personal finances of consumers under current conditions index. The index touched high of 109.3 during January, the highest since January 2007.

American consumers expect the economy to continue with its positive momentum. More than 50 percent of Americans feel that the economy will remain strong for next five years. Consumers are expecting inflation to remain 2.5 percent during 2015. As the oil prices are expected to remain in $35-48 per barrel during 2015, consumers will have more money to spend on other goods.

Richard Curtin, the survey's director, said, "Consumers judged prospects for the national economy as the best in a decade, with half of all consumers expecting the economic expansion will continue for another five years."

The jobless claims touched multi-year low last week. Real estate experts are expecting the markets to remain strong and expect higher demand for single-family homes during year 2015. The stock markets are expected to remain strong during the year as the companies are reporting strong results.

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.

Walsh College economic predictions for 2015

Dr. John Moore of Walsh College, last week at a meeting held with the Southeastern Chapter of the Michigan Mortgage Lenders Association (MSA), outlined a very upbeat picture for our local economy. His presentation centered on some very basic economic elements that provide for the high possibility of a good 2015 for real estate.

1. Real Gross Domestic Product (GDP) throughout the U.S. is trending upward and is at the highest level since 2007.
2. Medium Household Incomes in Michigan have regained strength and have almost equaled those of the entire U.S.
3. Real estate associated stocks have grown at about 16% over the last three years and almost 19% in the last 12 months.
4. Interest rates on 10-year treasuries have been in the 2-3% range keeping mortgage rates very reasonable.
5. The U.S. savings rate to GDP has been upward trending at about 15%, making more money available for real estate purchases.
6. The employment rate in Southeastern Michigan is growing, making buyers better able to qualify for mortgages.
7. Residential building permits from 2012-14 have more than doubled the previous two-year period.
8. Michigan and the Detroit MSA are cost effective places for businesses.
9. Detroit is in the midst of a strong resurgence.

The signs are there. 2015 is shaping up to be a good year for the real estate industry in our market area.

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.

Average sale price in the Woodward 5 Communities in 2014

The average sale price of existing homes in the Woodward 5 Communities grew by an average of 11 % in 2014 over 2013.  The Woodward 5 Communities are Berkley, Ferndale, Huntington Woods, Pleasant Ridge and Royal Oak.

Ferndale posted the highest gains with 19% growth over 2013.  Huntington Woods had the slowest growth coming in at 7%.

The average size of the homes sold over the year fell by an average of about 4% in 2014 compared to 2013.  Pleasant Ridge ran opposed to the trend with an average growth in the size of homes up about 4%.  Ferndale posted the largest difference over 2013 with a drop in the average size of the home sold of 12%.  

While the growth is more modest in relation to what we have seen over the last three or four years, this growth is much healthier.  In some quarters over the last few years, the growth has been as high as 30-40%. In those high growth quarters, buyers had sensed that the market had bottomed out and housing prices were not going to fall anymore.  Influenced by an improved economy, buyers rushed to the market to get the house they wanted.  This pushed prices higher because of multiple offers for many homes.

Now, if the market could be called anything, it is more normal.  Housing prices can sustain a growth of 8-11% annually.  It will stay ahead of inflation but will not create irrational bubbles.  

The following are the details for the Woodward 5 Communities from 2013 to 2014:

Berkley

Average Sale Price

2013 $158,496

2014 $171,277

Difference Sale Price + $13,000

Percent Difference + 8%

Average Square Foot

2013 1,222

2014 1,121

Average Price/Foot

2013 $129

2014 $141

Ferndale

Average Sale Price

2013 $100,972

2014 $119,855

Difference Sale Price + $18,883

Percent Difference + 19%

Average Square Foot

2013 1,157

2014 1,139

Average Price/Foot

2013 $87

2014 $105

Huntington Woods

Average Sale Price

2013 $305,636

2014 $329,805

Difference Sale Price + $24,169

Percent Difference + 7%

Average Square Foot

2013 1,930

2014 1,891

Average Price/Foot

2013 $158

2014 $174

Pleasant Ridge

Average Sale Price

2013 $234,057

2014 $271,601

Difference Sale Price + $37,544

Percent Difference + 15%

Average Square Foot

2013 1,600

2014 1,664

Average Price/Foot

2013 $146

2014 $163

Royal Oak

Average Sale Price

2013 $187,520

2014 $207,103

Difference Sale Price + $19,583

Percent Difference + 10%

Average Square Foot

2013 1,354

2014 1,353

Average Price/Foot

2013 $138

2014 $153

Of course, there are things you should keep in mind.  This is only the raw average of all homes sold in the communities.  In some cases a few higher priced homes sold in one community can have an impact on the average sale price.  The price of any one home might be different depending on age, general condition of the home and market trends.

Price and other data were collected from RealComp Multi Listing Service.

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Huntington Woods, Pleasant Ridge and Royal Oak.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.