When will my house sell? Avoiding Foreclosure and Short sale in Michigan.
By Clint Maki, Michigan Real Estate Expert
I have been a real-estate marketing professional for over 25 years now in the state of Michigan and right now I specialize in Short sales, foreclosure help, foreclosure prevention, REO properties, distressed properties. I get a lot of questions from people on my website HTTP:WWW.foreclosurehelpmichigan.com and we talk a lot about issues that are current to real estate in the state of Michigan specifically.
The most common question I get from people is “When will real estate come back?”.
I am not a real big fan of that question because it’s a fuzzy question. Everybody has a different reason for asking and everybody wants to know a different answer to a different question. Most of the time what they are REALLY asking me is “When will my house be worth what it used to be?” or, worse yet, “When will my house be worth a little bit more than what I owe on it?”
A lot of people got caught up into the culture of “bigger is better” and then went out and got second mortgages and they rolled all their debt– the car debt, the credit card debt – into their house and when their house plummeted in value, they found themselves completely wiped out financially.
Here’s how this worked. The real estate market was chugging right along, doing great in 2001 all the way through about 2008. So, it was doing really good. It was going up, up, up, up. In about 2008, mid–stream and mid-market, all of a sudden the infamous bubble burst Real estate prices kept going up, then all of a sudden they dropped to a tune of about 30% to 50% drop in value.
That’s a big hit for people to take especially if you just bought your house or you just did refinance, re-mortgage, second mortgage anything like that or you put additional debt on your home – pretty tough to take for most people. So, what their position is they are upside down in their equity over a period of time to just a couple of months the market dropped that much.
It happened to everybody. It happened to you too. You lost 30% to 50%, depending on what you own and where you are and what kind of property it is. So, people in certain areas got hit a little bit harder and it happened to everybody.
The common statement I hear again and again from people is, “I am going to wait until the real estate market comes back.” Let’s examine that statement.
What they are saying to me in essence is that “I want all my money back.” “When will my house be worth what I paid for or what I owe on it?” “I am not going to lose money” is what they are trying to say. “I am not going to lose money on my house.” I hear people say it all the time. “I am not selling this at a loss.”
You know what? You already lost it. Pretty BRUTAL statement, huh? It’s already gone.
The equity that you had evaporated. The same thing happened to your son’s, your daughter’s, your cousin’s, and your friend’s equity. It happened to everybody at one time.
This is how it works – it dropped like a rock and it’s going to roll like a flower. It will appreciate at a rate of about 5% per year maximum. It could appreciate some more than that just because something really incredible happened to the area. Maybe the local Municipality brought in some sort of economic stimulus like a new factory, a freeway, something like that that made a certain area grow. Appreciation in Real Estate is subject to the laws of supply and demand in our country and that’s just the way it works.
The Michigan economy is not rebounding very quickly because we don’t have a lot of industry coming to Michigan; they are leaving Michigan as a matter of fact. They are manufacturing their products somewhere else. I don’t want to be negative about this, but it’s a fact.
Recent articles that I have been reading are indicating that it will start to rebound nationally from 2012. Now, we don’t know what Michigan’s going to do because Michigan is a very special case for manufacturing. Depending on what the new Governor and his administration does, what people do with bringing jobs and industry back into Michigan, it’s going to be a long time.
We are going to see appreciation very slowly over time. We will see people’s house values going up slowly over time. It will take somewhere, depending on where you live, between 8 and 10 years for your home to appreciate after the market rebounds.
You get to do the math on your house. What’s it truly worth right now at 3% to 5% appreciation from the real number, (ie. not what you owe) and how long will it take for you to recoup your money to make it worth what you owe on it or what you paid to buy it or build. Take into consideration the number of payments that you have to make on it, the taxes, loss of opportunity, relocation, whatever it is and do the math on it and it will all add up to a number of some kind and what it takes you to hold that property and you get to decide; is it worth it to you?
These days a lot of people just can’t stick around and wait for that to happen. Time is VALUABLE. We have people that are selling their homes and moving out of state. They can’t afford to make the payments anymore, they are upside down and they know it, they know that they can continue to pay for that house and pay off that debt if they want but it will take them so long and cost them so much money to hold that that they are better off selling that house short. So they just leave and let foreclosure happen. (see my previous articles and videos for Short sale tactics at Youtube/RealtorClint ) This perpetuated the downward price spiral because people can continuw to buy something cheaper. I see a lot of people doing that and it’s a strategy that only you can decide if it’s worth it to you to keep the house or sell it regardless of the price you get out of it.
I specialize in short sales, foreclosures, loan modifications and a lot of these different structured settlements that are going on out there today and I am really able to help you. You can go to my website foreclosurehelpinmichigan.com and you can get some information there from me that may poit you in the right direction. There will be a white paper on How to Compare House for Sale During a Short Sale, How to Avoid Foreclosure. These are the issues that we deal with these days and we specialize in finding ways to avoid people destroying their credit reputation and we help preserve people’s credit rating and get on to what’s the next in your life.
So many people lost everything and it’s time to go ahead and reset your equity, get back started again paying on a house that is worth what you paid for it. Let’s just get back on our feet again together.
I can help you. You can reach me. Go to my website and opt-in and watch the videos. You can reach me at (616)837-7630. My email address is Michigan.REO.firstname.lastname@example.org.
Clint Maki, Broker-Thresholds for Living realty