Real estate market improves
Jul 21, 2015 at 11:43 AM
Local, state and national sales numbers are rolling in like a warm welcome mat to an industry that has been shut out in recent years by a chilling economic downturn hammered with short sales, foreclosures and a glut of homes on the market.
After four years of slouchville, low interest rates and value pricing are combining for what appears to be a real estate rebound.
In Grand Haven, Spring Lake and Ferrysburg, 527 units have sold in the first eight months of the year, compared to 366 in 2011 — according to Dale Zahn, CEO of the West Michigan Association of Realtors.
But the average sales price is nowhere near shooting through the roof. Prices are even lagging behind last year —$181,761 through Aug. 31, compared to $187,149 in 2011.
Both those figures are down from 2008, when the average sale in Northwest Ottawa County was $195,299.
But any movement is good movement at this point, according to Zahn.
“Everything that we're hearing up and down the Lakeshore is that activity is up, Realtors are excited, transactions are getting closed and there are often multiple offers,” he said. “The average sales price is starting to tick up, but it will be a while until it gets back to the previous record levels of four years ago. It is coming back, but it is coming back slow.”
Zahn said historically low interest rates are a driving force in the rebound.
“The reality is, mortgage money is dirt cheap,” he said. “It's so dirt cheap that people ought to be lined up around the block.”
Zahn cautioned that good credit is mandatory for future homebuyers. He said questionable lending practices — such as loaning more than buyers could afford to pay back and writing notes for more than the home is worth — contributed to the recent recession and housing slump.
“That kind of policy was ridiculous,” Zahn said. “Many of us in the business knew it would explode and have consequences.”
Michelle Teitsma of Keller Williams Realty in Grand Haven said homes she and her team partner/mom, Mary, have had on the market for two years are finally starting to move. From May through July, 336 area homes sold and 133 sales are pending, according to Teitsma, for a total value of $62.6 million. That's up from 227 sales during the same period last year, at a value of just over $46 million.
“Things have definitely picked up,” Teitsma said. “Interest rates are phenomenal and people need to be taking advantage of these rates —3.625 (percent) for a 30-year fixed. You can own a home for less than you pay in rent.”
Teitsma has seen a sales price slippage, too. During May, June and July of 2011, the average selling price was $203,881. This summer, the average was $186,538.
Teitsma said the $150,000-and-under market is hot, especially for homes in the Spring Lake school district.
“I noticed it starting way back in February,” she said. “Usually, we're dead in the middle of winter, but we kept pretty steady. July was slow, but it typically is because that's when families are taking their vacations.
"Prior to that, we were swamped," Teitsma continued. "The phone was constantly ringing and we put quite a few deals together. I think September is really picking up again.”
Mark Gleason, associate broker for the Coldwell Banker Schmidt Realtors office in Grand Haven, said he sold a house, a condo and vacant land all in the same day last week. But he's not convinced the rebound is for real.
“It's kind of a mixed-up market,” Gleason said. “It's very difficult to get your hands around. I've been doing this for 30 years and I've never seen it quite as strange as it is. I can't say it's getting better. I can't say it's getting worse.”
Gleason said this might be the “new normal” for the real estate industry. He noted it's difficult to obtain financing for condominiums, and FHA financing has dried up a bit.
He said he and his real estate partner/wife, Kim, are seeing about a 10 percent increase in home sales over 2011.
Nationally, home sales were up 10.4 percent in July compared to the same period last year, according to the National Association of Realtors.