April 2017 – Your Real Estate Matchmaker

Based on number of transactions, March 2017 fell short in Saginaw County home sales when compared to a very robust March of last year, and even behind the 5 year March average. Don’t despair! If you are a buyer or seller there is still good news.

Despite the lower number of sales, Saginaw’s 12 month average sales price ending in March 2017 was at $104,314. This is up 3.33% over last year at the same time. I remember back in 2008 when the average home sale was at a whopping $64,143 – so we’ve made a lot of progress getting back to the “Pre-crash” price in 2005 and the average was just over $107,000.

Lots of numbers. What does it mean? Well, we can’t really formulate a trend from the low March sales. I’ll be keeping an eye on it to see if it was a statistical anomaly for the month. A slow March in essence is really a slowdown of activity in January. The plus side is the increase in home values for our various communities. That’s good news for sellers. This in turn, realistically is also good for buyers. Why? Well, all year we’ve seen low inventory of good homes. As word spreads that home prices are continuing to rise, more sellers are likely to get their homes on the market. This gives a buyer more choices, which also gives them more leverage when making an offer.

The March trend was different for Bay and Midland Counties, despite how closely tied our Mid-Michigan communities are. Bay County saw 25% more transactions this March over last year which is great; however the average sales price rose less than 1%. Midland also saw about a 20% increase in number of transactions over last March plus had a 6.13% increase in values.

Quarterly reports should be out soon and that will perhaps give a little more insight as to whether March was a trend or an anomaly. Always good to keep in touch with the heartbeat of your community. If you would like to know more specific information for your area, please feel free to call or email me. If you’d like to receive a free home market analysis – I’d love to hear from you.

~Build a better world by building a better you

Monique Gilbert – Your Real Estate Matchmaker – Connecting Buyers & Sellers for a Perfect Match

Recently Saginaw was deemed the 2nd Best Housing Market in the United States. I know that seems to be contrary to what most people think when they ponder the state of Saginaw, with its loss of population and manufacturing jobs over the past decade. There were a lot of factors that went into the study which gave us this infamous title. Though many of the factors are good things for us; higher number of residential sales in 2016 than any other in 10 years, average sales price climbing, etc – there’s more to it than that; and it and of itself could be a series of articles. But my point today is with the current changes in our market, could real estate investing be a good avenue for you?

If you are active in the stock market you are well aware of the volatility over the past years. If you’re toward the end of your working age, or recently retired – you may have had to make drastic changes to your retirement plans due to extensive losses. What do you consider a good Return On Investment? (ROI) Many in the stock market are averaging 5-8%. You might be thrilled at a higher amount.

What if you purchased a home for $25,000 and put in $3,000 of repairs and rented it for $650-$800/month? Taking out taxes and insurance, even on a $650/month home, your income would be about $5,500. That in one year would be an APR ROI of almost 20%. Granted, you will occasionally need to do maintenance, perhaps pay a fee to a property management company. I would always suggest that for the first year, all of your rental income be kept in a designated savings account for future maintenance issues, as well as a good 10-15% each year.

With this income of 19.6%ROI annually, you would have a steady income and when the day came you wanted to sell, history tells us that you should get at least 100% of your original investment back as well. Why isn’t everyone doing this? Well, a lot of people are. I don’t have any stats about the percent of homes being purchased in Saginaw by out of area investors but I know it is much higher than any other time in the past ten years.

Let me be very clear that being a landlord, even if you hire a property management company, is not risk free. You need to do a great job in selecting tenants (or the PM co. does) You need to be sure you’re setting those maintenance funds aside. There will be tenants who do crazy things and cost you money.

You may decide the risk for damages would be less if you were dealing with more expensive rentals. For example I recently had a client who purchased a home for $60,000 in the Township and then rented it for $1300/month. That’s an awesome ROI, but a higher initial investment. You have to do what you think is best. And that might be nothing at all! But I believe it bears thinking about.

If you think investing might be worth looking into, feel free to call or email me. We have a great property management division here at Berkshire Hathaway too. If you want some honest advice I would be happy to sit down with you.

Month: April 2017

Less Sales – Higher Prices for Saginaw County

Is Real Estate Investing For You?