The recent near blizzard conditions here in Northern Michigan brought to mind the topic of Weathering the Storm.  Like many areas in the country, Michigan’s real estate market has taken a beating.  Honestly, our entire state economy has been struggling.

 The thing about real estate markets, though, is that they’re local.  In our area, we’ve got one county showing a 15% drop in average sales price, while the neighboring county is down only minimally.  SE Michigan continues to struggle mightily, but when that market turns (and it eventually will) we’re going to benifit in the vacation/retirement mecca here in the north.

 So what to do in the meantime?  Work hard, get good listings, make sure they’re priced well, and tell the world about the deals available.  And there are deals!  I’ve got a list sitting in front of me that includes 286 bank owned properties in a 5 county area.  These banks don’t want to sit on these properties- they want them gone, and among these 286 listings are some great deals.  Aside from bank owned properties, there are private sellers who are ready to make someone a very happy owner. 

I’ve literally got one owner right now who is all but begging me to buy his property.  And I might just give in and do it, because it’s a GREAT deal.  But I can’t buy all the great deals, as much as I’d like to.  I need to keep finding buyers who are ready to move when these deals become available.  So that’s what I’ll be working on this week.  Calling contacts and pitching them a deal, one that I should probably take, but so far haven’t.

 I’m really optimistic about the upcoming year.  It’s the buyers turn in the drivers seat, and as prices adjust, buyers can afford more home.  That means more happy buyers, more dreams fulfilled, and more excitement.  And for me, those are the rewards that last, that fill you with hope when deals go bad, that make you smile when you head to the office, that make you feel like you make a real difference.  I’ve said often to friends and family that “I still want to save the world, to make it a better place.”  When dreams get fullfilled, I can see that I’m doing that, bit by bit.

If you want a copy of the list I referenced, or want to be on my “hit list,” send me an email, or post a response.  It’s a great time to be a buyer!

Great video, giving some pretty realistic and good advice to anxious home sellers.

http://www.msnbc.msn.com/id/21134540/vp/22646065#22646065

You can also go to my website at www.2cases.com and click through to the video there.

I wrote an offer today on a house that’s listed for $19,900.  While it is beat up, it still is a house, on 1.2 acres, for $19,900.  As my friend Jesse said…”that’s like buying a car!” and it got me thinking.  The last time I sold a house in this price range was about 6 years ago, and that was a single wide mobile on a tiny lot in Thompsonville.  Don’t take this to mean that we’re back to pre 2001 levels across the board, but there are some great deals out there.

 So good, in fact, that Tammy and I are talking about selling our house.  We know we won’t net out what we might have hoped not long ago, but it’s all relative.  There are deals available that I’m having trouble passing on, and so we can make it up on a purchase.

 Word is starting to get out, and the really good deals don’t last for long before they’re snapped up. 

 I read an interesting analysis comparing and contrasting the foreclosure issue in Michigan and Ohio to that in California and Florida.  Here’s that article.

 Enjoy

I know, it seems to run counter to all we’re hearing about the real estate market, but some people still do realize a gain when they sell.  Today I had a client whose property I have listed ask me about how he’ll be taxed on his gain.  Seems he inherited the property some time ago.  The basics, I told him, are as follows:

Your gain is calculated by taking your net proceeds from the sale and subtracting your adjusted basis.  What’s your adjusted basis?  Well, it’s your basis when you acquired the property, plus any improvements, less any depreciation or partial sales taken.  In other words, its what you bought the property for, plus improvements (that you can prove) minus anything you’ve taken away from the property.

Once you arrive at this figure you can calculate your taxable gain- if you’ve owned it for more than a year, you’ll be at the current long term capitol gain rate.  Otherwise it’s taxed as ordinary income.

 So smart sellers want to know how to avoid this tax… For your home, there’s an exemption that may apply.  For investment properties, you can’t avoid it, but you can defer it by way of a 1031 Tax Deferred Exchange.  In a 1031 you’re rolling your gain over into a new property, as opposed to putting it in your wallet.  This isn’t a casual transaction, and requires an intermediary and some planning.

Now for the disclaimer.  The US Government has a habit of changing the rules for this sort of stuff, so make sure you talk with your CPA or financial professional to make sure you’re using what’s available to your best advantage.

One of those days that make living in Northern Michigan unique.  It was supposed to be rainy all day, but the sun broke through until thunderstorms rolled through.  The colors are out, which I wasn’t sure would happen due to the dry summer and hot fall.  I took a few photos on my way home… watch for those here soon.

On a less cheery note, the late news is featuring reports of tornados that touched down in Kalkaska and Cheboygan counties as part of the storms.  That’s pretty rare for this area, so as expected it’s getting top billing.

I’ve put off launching this blog long enough.  I’m not a blogophile, but I think I can write and will try to make this an enjoyable read.

In my role as 2008 President of the Traverse Area Association of Realtors, I was recently asked to comment on what I see happening in the region’s residential real estate market for 2008.  Here’s what I said:

“I expect the condition of the real estate industry for 2008 to be challenging for sellers and agents, with those who are most dedicated and motivated coming out on top.  Sale prices and numbers of sales in the region will likely be flat to slightly down, and the market will be rife with opportunity for buyers.  As Boomers look toward retirement our region will continue to benefit and likely outperform most markets in the state.  If we see a turn around in the Southern Michigan real estate market in 2008, I expect we’ll see increased traffic in our area as sellers from those markets become buyers in ours.”

 

Well, there’s a start!