Thinking of buying or selling a home in Oakland County? I had a chance to talk to Oakland County Real Estate expert Lynn Baker of Hall and Hunter Realtors about the latest real estate trends and mortgage rates for house hunters in Oakland County.
Oakland County Moms: What should people be looking for when thinking about moving to or from Oakland County?
Realtor Lynn Baker: If buying in Oakland County, your taxes will be higher. And, you will not get as large of a home if you're coming from let's say Macomb or Wayne County. The appreciation in Oakland County in the last 18 months has probably been at least a 5-8% increase in value. The other counties are pretty much flat. So, when buying in this area your investment is usually safer.
Oakland County Moms: What can people expect to find when looking for a home in Oakland County, and how does it vary by city?
Realtor Lynn Baker: In Northern Oakland County you will tend to get newer homes because there's much more land to build on. You will also typically spend less on homes because it's not as a desirable place to live in Northern Oakland County because it takes longer to get Detroit. So, I would say you can use the dividing line of Square Lake Rd. If you go north of Square Lake Rd., which would encompass Rochester and then as you go forward t o Oxford, you will find newer homes on larger lots and the tax base will be lower. If you go south of Square Lake Rd., you're now dealing with Bloomfield, Birmingham, Troy, Royal Oak, etc. and you're going to be dealing with probably slightly higher taxes, definitely older homes, and definitely smaller lots.
Oakland County Moms: Are there specific cities in Oakland County that are trending up in sales? Where are the "hot spots?"
Realtor Lynn Baker: The hot spots in Oakland County, in terms of newer homes, is always going to be the Rochester, Oakland Twp. and Rochester Hills area. The area that will always maintain value just because of reputation is Birmingham, Bloomfield, Beverly Hills, Franklin and Bingham Farms. That's where you're going to buy the smallest home for your money, the smallest lot, and the higher taxes for your money.
Oakland County Moms: So resale in those areas is more secure?
Realtor Lynn Baker: Yeah, a little bit more secure. But what's happening is more people are becoming enamored with the newer homes and the bigger lots, so people are more willing to make that extra drive and go to let's say, the Rochester, Orion, Oxford areas.
Oakland County Moms: How much longer can we expect to have these low mortgage rates?
Realtor Lynn Baker: Well there are a couple things we can take a look at. The treasury department has been saying that they're probably going to keep these interest rates until the year 2014. The interest rates will remain low. But, what we have to consider who is elected in the fall. All bets are off. What we have to really find out is more about the economy recovery because that makes a big difference in where the interest rates are, the philosophies of the new or old president, and also how quickly the new home market is recovering. All those in combination will help them decide if the interest rates should go up. But I would anticipate that the interest rates will be where they are at least until the end of the year and then we'll have to see what's going on.
Oakland County Moms: In Oakland County, what would you say is selling better right now - new builds or previous homes?
Realtor Lynn Baker: I would say that if you're talking about under $250K, it's probably the older homes because there are not too many new builds in that price range. Definitely if you're looking for a new home and you can afford over $400K, there are areas where you can purchase homes between $400K to about $600K and those are moving really quickly.
Oakland County Moms: Many people want a new home, but can't take a loss on the sale of their current home. What are your thoughts on renting out your home so you can purchase a new home?
Realtor Lynn Baker: It's all about what your income is. Because if you're going to rent out your current home to go purchase the next home, you're going to have to show a minimum of a one year lease, and you're going to have to show a little bit of a higher income because they're actually going to use that home that you're renting against what you can afford. I always recommend before you start looking for a new home, talk to at least one or two reputable mortgage companies who can review different angles in terms of you purchasing, renting out your current home... and they can then advise you what would be the best thing to do. And, that's also the time you should be getting a good real estate agent who can also give you an evaluation on your current home, the rentability of it, and the sale price of it, and then you can combine that with the advice from the mortgage people.
Oakland County Moms: What is the best financial decision right now? Sell your home and take a hit, but save a ton on a new home. Or, stay put and wait for the market to improve?
Realtor Lynn Baker: The way I look at it is I don't think the market value in anyone's home is ever going to go back to where it was six years ago. It's just not going to happen. I think that you can anticipate between now and probably 2014, depending on what city you live in, you will either see prices staying where they are but not going down, in the more popular areas you've seen an increase in the last 12 months of a 8-9% increase in value. Because we are down in listings in all of Oakland County by 60%, it's all about supply and demand - so what's happening right now is we are driving up prices of homes of all levels, old and new, because of the fact that there's nothing on the market. People are having to pay either least list price or above to get these homes. So the good news is I see we're going to continue to go the 8-9% over the course of the next two years. What's really going to be a factor in all of this is the short sales and the bank-owned properties/held back by the mortgage companies. It's not going to be as high as in some of the other states. We're not sure how it will affect us here, but we'll know more in the next 10 months. So, if I was going to sell your house, I would sell it now and I would try to have it sold before the end of the year.
Oakland County Moms: How has the investment strategy changed over the years?
Realtor Lynn Baker: Before 1990, people purchased homes, they were happy to move in, and basically when they sold it they got their closing costs back and whatever they put into the home. Starting in 1990 and forward, people were buying homes as an investment and that was a whole different attitude for why we bought our homes. And what's so hard right now for sellers particularly, and buyers need to take note of, is that we are never going to buy our house again for retirement; we're never going to buy a house again for increased value that's going to give us a whole bunch of money. I tell people now when you buy your home, you can anticipate making some money, but you're never going to make the big bucks.
Oakland County Moms: What advice do you have for someone who is in the market to buy a home?
Realtor Lynn Baker: What I tell people is to try and buy something slightly larger than what you thought you wanted. I also tell them to think out of the box. I think what happens sometimes is you have an idea of what you want in terms of style and size. What I try to do as a broker is actually show them things they never even thought of, because many times once you're in it, you like it. So, you need to think out of the box and ask your agent to show you different homes to get a really good sense of what it is you want and to educate yourself about the market. And, as always, pick the best location if you can for resale.
I also had an opportunity to speak briefly with Oakland County Executive L. Brooks Patterson at a recent press conference about the future of home sales in Oakland County...
Oakland County Moms: Realtors have mentioned that there are fewer houses for sale and we may see an increase in home sale prices because of this. What do you see for the upcoming trends in Oakland County, Michigan home sales?
Oakland County Executive L. Brooks Patterson: I see that the back log of homes is being edged out very quickly. The average listing is now lasting between 4 and 6 days. So we're turning over our inventory very quickly. But the reason for that is we're selling at an oppressed value. Once the inventory's gone, then you'll see the prices increase.
Hall and Hunters Realtors
442 South Old Woodward
Birmingham, MI 48009