Real Estate Transfer Tax Refund Clarity

At the close of 2015, Governor Snyder signed into law legislation providing clarity to Michigan's State Real Estate Transfer Tax. House Bill 4173, sponsored by Realtor®-member and Representative Dave Maturen (R-Brady Twp.) revises the State Real Estate Transfer Tax to clarify two items:

1. The party that paid the transfer tax may request the refund if a refund is due, and
2. Clarify that Exemption (u) applies when the SEV at the time of sale of a Principle Residence is less than or equal to the original SEV on the purchase.

The Michigan Supreme Court recently broadened the application of Exemption (u) by removing the requirement that True Cash Value be realized in a transfer. The legislation enshrines this change, offering important clarity and tax relief to distressed sellers. 

In addition, this legislation gives buyers the same refund rights as sellers when it is determined that the transfer tax was paid unnecessarily by a buyer. Refund rights under the Sate Transfer Tax are available up to 4 years and 15 days from a transfer.

To better aid members in reaching out to their former and current clients that may qualify, the refund application form is found here. (Please note that the current refund form does not reflect the change in law. The State Treasury will be updating the form in the coming weeks).

The following Q&A's are intended to illustrate exemption (u)'s applicability:
 
QUESTION: Some clients of mine sold their principal residence in 2013 and the SEV was lower at the time they sold it than when they purchased it. They just found out that they might be entitled to a refund of the state transfer tax they paid. They sold the house at a profit; will they still be entitled to the refund?
 
ANSWER: YES, to qualify for the state transfer tax refund, the SEV at the time of purchase must be higher than the SEV at the time of sale. The fact that they sold the house at a profit has no effect on their ability to get a refund.
 
QUESTION: Some clients of mine bought vacant land in 2011 on which they had a house constructed in 2012. They sold the house in late 2014. Will they be entitled to a state transfer tax refund if the SEV of their property at the time the house was completed was more than at the time of sale?
 
ANSWER: NO, since at the time of purchase, the land was vacant, they cannot claim a refund of the state transfer tax since the property was not their principal residence at the time of purchase.

Source: Greater Metropolitan Area Realtors

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.

Berkley November sales report

There is good news all around for home sales in Berkley, Michigan.

The average sale price (median) for homes in Berkley grew from $151,000 in November of 2014 to $162,500 in November this year.  That is about a 7% growth over last year.  If growth goes much beyond that, 7%, the market may be over inflated.  But 7% is an easily sustainable growth but still keeps ahead of the economy over all.

As a reflection of the growth, the number of days (DOM) on the market dropped dramatically.  The average this year was only on the market 36 days.  Last year DOM was at 43 days.

Finally, more homeowners thought it was time for them to make a move.  Many were perhaps finally able to get enough for their investment to upgrade their living arrangements.  The number of homes sold in Berkley went from 27 in November of 2014 to 32 in November of 2015.

As you can see, good news for all.

Keep in mind, these are averages for the market overall.  Individual homes may sell for less or for more depending on the neighborhood and the condition of your home.  

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.

Median prices for homes in Southeast Michigan highest in 10 years

Across southeast Michigan, the median sales price for housing hit $146,250 in October, 4.5 percent higher than October a year ago and the highest median October price level in 10 years – up from a low of $67,000 in 2010. Median means half the homes sold for more and half for less.

Median sales figures compiled by Realcomp and made available Thursday vary across the region down to the street level, but it reports housing and condominium activity primarily by county with some smaller areas broken out.

Realcomp defines southeast Michigan as Oakland, Wayne, Macomb, Livingston, Genesee, Lapeer, and St. Clair counties.

MEDIAN PRICES

Across the seven counties, Livingston County had the highest median sales price in October of $216,800, up 1.4 percent from a year ago. The median sales price rose 4.6 percent to $195,000 in Oakland County, 4.7 percent to $157,000 in Lapeer County, 9.3 percent to $139,900 in Macomb County, 3.5 percent to $132,000 in St. Clair County, and 12.1 percent to $108,750 in Genesee County.

In Wayne County, the median sales price rose 6.5 percent to $103,000. But the median sales price in Wayne County excluding Detroit rose 4.6 percent to $115,000.

SALES

In order, there were 1,811 sales in Oakland County in October, 1,691 sales in Wayne County, 1,143 sales in Macomb County, 476 sales in Genesee County, 312 sales in Livingston County, 225 sales in St. Clair County, and 104 sales in Lapeer County.

In other observations from Realcomp:

• The average days on the market fell by one to 46 days.

• The number of houses for sale was virtually unchanged at 25,071 compared to 25,068 a year ago.

• Median October sales prices have risen each year since 2011.

• Across southeast Michigan, the 6,408 sales in October is slightly below the October peak of 6,421 in 2009.

http://www.macombdaily.com/special-news-reports/20151112/median-real-estate-sales-prices-hit-10-year-high-across-southeast-michigan

By Charles Crumm, charlie.crumm@oakpress.com, @crummc on Twitter, Local News Editor Jeff Payne contributed to this report.

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.

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.

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.