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.

State equalized property values rise

State equalized property values rise in Metro Detroit
detroitnews.com  by Gary Heinlein

Metro Detroit’s seven-county area experienced its first increase in state equalized value of properties in six years, according to a report released Monday — a small but lagging sign that the region’s economy continues to recover.

SEV — or half of the market value a city assessor assigns to property — increased 0.2 percent this year, the Southeast Michigan Council of Governments said. It’s another sign that the region’s economy is improving, the group said.

“The growth of total SEV is definitely good news for a region that suffered a great deal in the recent collapse of the real estate market,” SEMCOG Executive Director Paul Tait said in a statement.

By contrast, property taxable value — the main tax base for municipal governments — fell 0.2 percent, according to SEMCOG. About 60 percent, or 141 communities in Southeast Michigan, experienced gains in property taxable value this year, the group said.

“The trend local governments have faced for several years of declining local property taxes appears to be over,” Tait said. “Local governments must, however, continue their efforts to make the most efficient use of tax dollars to deliver the highest possible quality services to residents.”

David Sowerby, portfolio manager at Loomis Sayles investment management firm in Bloomfield Hills, said even a small increases in real estate values is good news for the region.

“It is interesting SEMCOG is seeing an increase in SEV for Metro Detroit,” Sowerby said. “But it certainly has been at least a one-year-plus experience that real estate values have been leading the economic recovery in Metro Detroit.

“There are lagging indicators — and there are lagging, lagging, lagging indicators, and SEV is one of those,” Sowerby explained.

The SEV rise “bodes well” for the future for collection of property taxes, but that won't necessarily be felt immediately, he said, and maybe not for at least another year.

The number of communities losing more than 10 percent of taxable value declined to six this year, down from 24 last year. More significantly, 141 communities gaining value is up from 27 communities that do so last year.

Improvement in taxable value was uneven.

Oakland County’s Lyon Township Oakland led with a 5.2-percent increase, while Monroe County’s Luna Pier saw a 16-percent SEV drop.

Pontiac lost 15 percent. Other older communities also experienced significant losses, officials said.

detroitnews.com  by Gary Heinlein

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 monthly market report - July 2013

Michigan Monthly Market Report - July 2013   

Buyer demand in June continued at a strong pace in terms of new purchase contracts written (pending sales). June also continued the trend of more sellers putting their homes on the market, which should “in theory” relieve some of the significant inventory shortages. We say “in theory” because although new listings did rise, so did buyer demand, quickly absorbing the additional homes. In spite of more homes coming on the market, the available inventory continues to fall, reaching a new low for Southeast Michigan of 2.1 months (1.5 months for homes on the market less than 90 days). As we have shown over the last few months, the rate of growth for both new sales and listings continue their upward movement resulting in fewer days on market.

Enlarged View: Annual Appreciation Graph 

It is not surprising that the home value trend continues to accelerate, as well.

Enlarged View: Price per Square Foot Graph 

Interest rates were the biggest news in the past 30 days, rising in anticipation of the federal government rolling back their support of low mortgage rates. Showing appointments slowed a bit in June, which might indicate a reaction to the rising rates. So how high will rates move? Since jumbo mortgage loans (loans over $417,000) do not have a federal subsidy, they are the best gage of where interest rates should move. Right now both conventional and jumbo rates are nearly identical, meaning they have moved to their true market level and we can expect them to remain stable in the short run. However, as the economy continues to improve, rates will rise.

What is the “cost” of waiting in the current market?  For buyers the math is pretty easy. If values go up 10% and interest rates rise 1%, their buying power is reduced by 20% (i.e mortgage payments increase 20%), which is of course why so many buyers are attempting to buy now.  For Sellers, that 1% rise in rates will negate a 10% increase in value. Therefore, over the next few years rising rates will offset some of the rising appreciation, reducing buyer demand and limiting the amount of wild cash offers given to sellers.

Buyers should be aware that in more and more cases, sellers are requiring the buyer to commit to covering some or all of the short fall if the appraisal comes in lower than the agreed purchase price. Prices have not yet reached their 2005 peak levels so overbidding is still a safe bet to get the home you really want, even if the appraisal comes in lower. Appraisers have a very difficult time catching up with a rising market, since they rely on historical sales data to determine the value of a property.  

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.