When radio host Lucy Ann Lance asked Ann Arbor REALTOR® Kathy Toth about the local housing market, she received a wealth of information. “Average home prices year-to-date in Washtenaw County are up 18 percent,” Toth reported. “Meanwhile, the number of units sold did not change by much. The shortage of home inventory accelerated our home prices.”
Lance questioned how this has affected Ann Arbor home buyers. “We had multiple offers and bidding wars,” Toth explained. “Buyers who made their best offers first, and who used escalation clauses in their offers, were the most successful.”
Buyers who resisted the market trends were often disappointed. “A two thousand dollar difference in price is only about twenty cents a month on your mortgage payment,” Toth added. “There’s nothing worse than calling your buyers the next day and telling them the house was sold to someone else – over such a small difference in the offers.”
Ann Arbor and Dexter are the most competitive markets in Washtenaw County, with home absorption rates of 3.2 months and 3.8 months, respectively. Absorption rates under 6 months indicate a seller’s market. The fastest-moving market segment involves homes that are priced from $200,000 to $400,000.
When Lance asked what challenges remain for the market, Toth pointed to low home appraisals. “Appraisers remain skittish, and sometimes appraisals are based on outdated information,” Toth says. “In some cases we can point out mistakes made by the appraiser, or prove that the market has more recent data to use.”
Ultimately, if a low appraisal stands, there are still ways to save the deal. Toth illustrated an example. “If a home is truly over-priced, a seller may agree to a price reduction. Home buyers can also bring more cash to the table to cover the difference between their financing and the sale price.”
When questioned about the status of short sales and foreclosures, Toth had good news to share. “Two and a half years ago, distressed sales were 21 percent of our market. Now they’re only five percent of the market.”
Toth explained that homeowners who are experiencing a hardship suffer an emotional burden on top of a financial one. She advocates short sales as an important solution. “I’ve seen lenders forgive as much as $150,000 in debt,” says Toth. “We’ve negotiated debt forgiveness with first, second, and sometimes even third lien holders. We also negotiate credit reporting to help protect the seller’s credit history.”
The key to a successful short sale? “Comply with the paperwork demands,” Toth says. “And be patient.”
Looking to the future, Toth sees market conditions remaining positive in 2014. “We are on the right track, but there is more room for recovery. As long as interest rates remain stable, we should continue to see home price appreciation through 2014.”
Kathy Toth & Team have been serving Washtenaw County real estate including Dexter, Ann Arbor, Chelsea and Saline clients for over 20 years. They are among the top one percent of REALTORS® nationally and have been featured twice on House Hunters HGTV. Toth works directly with listing and buyer representative partners, with a goal of exceeding her client’s expectations while meeting their real estate purchase or sale objectives.
A recording of the radio broadcast aired by WLBY 1290AM can be accessed online at www.KathyToth.com/radio_shows. For more information about Kathy Toth & Team and their array of client services, visit www.KathyToth.com.