Housing Prices Stabilizing by Stronger Job Numbers and Lower Interest Rates

 For the last 45 days as the interest rates have fallen to 4-4.25 percent, the result has been a real estate market that has spiked. There are many people who have waited for the market to bottom out to take advantage of the low prices and rates. How do you know when the market has bottomed out?... when prices start to climb. The last month or two, the real estate market has been on fire. Buyers, sellers, real estate agents and appraisers have recognized the market trending upward.

An example is Island Lake where in the past two years I have sold 18 homes and condos. Only two out of nine lakefront condos sold last year at or above $400,000. In 2011, three out of four lakefront condos sold at or above $400,000. I have agents asking me when I will have the next lakefront listing because they have buyers ready to purchase. Therein lays another major issue. There are fewer choices for a buyer today than one year ago. Condos and houses have appreciated in Island Lake at a rate higher than the average Novi home. When you have a resort-like neighborhood with many amenities, borrowing another $10,000 at 4 percent puts Island Lake within reach. Forty dollars per month to be in a home where your children can attend the second-rated elementary school in Michigan, Deerfield Elementary, enjoying a community pool overlooking a lake with a swim club, two beaches, four miles of walking trails, it’s an easy choice to make. Employment numbers are stabilizing and people are interested in moving up. This example that is true for all Novi neighborhoods. Novi is a place where families want to live.

Lower rates are not just benefiting people who are moving, but they are benefiting those who are trying to better afford their home. If you have a Liber loan and it adjusts each year and you can’t qualify to refinance then you are saving 100’s from where you were 5-6 years ago. A Liber loan can literally be the difference between a short sale, foreclosure or actually affording your home. If you have been able to refinance, you can lock your housing costs into a 10-, 15-, 20- or 30-year loan. That savings is better than a tax cut, and it takes the politicians out of the game. You win no matter what your price range. This avenue is better than the government trying to stimulate the housing sector by offering taxpayer money in the form of a $9,000 check to those who purchased as they did in 2008.

The more people that are able to buy homes the more money is spent in the local community. Three and one-half jobs are created when one home is sold and 1.1 jobs are created by a $100,000 remodeling job. Realtors, loan officers, title companies, inspectors, appraisers, furniture companies, lumber, handymen, home improvement stores, and many more service-oriented companies benefit from homes being sold or remodeled. At the end of the day, people feel more self worth when they are in a home they can afford.