Ann Arbor Real Estate Talk

We’re Everywhere, We’re Everywhere

The graph below is called a friend wheel. It is an application I downloaded on Facebook.

How many hours would it take you to draw this? Hours, I imagine. It takes about 60 seconds to download all your friends on this graph. Take a look, notice all the Activerain members on Facebook. 

I started my profile a few months ago and there is a market place group where you can upload your listings.

Just this week they started a new application where you can put you listings in and they upload to Google base. It is called LivePads. Cheryl Johnson posted on LivePads a couple of days ago, so I went and added a few listings. My kids are amazed I have 149 friends on Facebook. WEB 2.0 is about being connected.

If you don’t want to be poked, hugged, thrown food hat, served a drink, give and receive flowers, be poked, be super poked, don’t come !!

Another one I just signed up for is Realty World, check out my profile here.

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The wait is over….University of Michigan hires Rich Rodriguez, from West Virginia as the new Head football coach at University of Michigan.

He will be introduced at a press conference Monday morning. Personally, I’m glad the search is over. It has been a month long search since Lloyd Carr resigned.

You can read the entire saga here.

The blogs and Sports Talk Radio have been going crazy. Geoff Larcom, one of Editors from the Ann Arbor News, called me last week to see if I knew anything about Les Miles wife buying a house in Ann Arbor. The rumors were flying. As Geoff said, this is the first big hiring since the day of the internet, and blogs.

One day I was listening to Talk Radio WTKA, and someone called in and it was hillarious, they said, “Ok, all you bloggers and people listening to talk radio, get off your computers and come on down to Main Street and we will march to Connor O’Neils, have a few beers and figure this thing out.

You can read the story here.

Last year, U of M. hired the head basketball away from W. Virginia, John Beilein.

Sorry, Jeff Belonger, I know you love West Virginia and Sarah Cooper, I know you did too.

Rich Rodriguez is known for his spread offense attack and I am thrilled, Michigan and another Big Ten football school will be getting in the 21^st Century for football.

I wonder if he will still coach West Virginia in the Fiesta Bowl? I think I fell for him when he lost the game to Pittsburgh and he cried at the press conference.

Guess we’ll have wait until tomorrow.

Finally…

Go Blue !!!

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My good friend, Jeff Belonger, recently wrote a post on Active Rain. Active Rain is a Real Estate blogging community of over 60,000 Realtors, Lenders, Home Stagers, Builders, Brokers, Feng Shui Specialists.

I have been following Jeff’s posts for over a year. He is most definately the FHA Expert.

Last night Jeff wrote a post on FHA Bill Passing in the U.S. Senate. I asked him if I could copy it here for the Ann Arbor community. The last several years many lenders moved away from doing FHA Loans. Most of them wrote what were 80/20 loans or 80/10/10 loans.  Rates were low so that is what their recommendation was for most buyers.

Here is Jeff’s post on the FHA reform working its way into law.

today - 12/14/07

Today the Senate passed the FHA Modernization bill aka the FHA reform bill. This bill is the  American Homeownership Act of 2006 (H.R. 5121) which has been through several approval stages since its inception. This bill now heads back to the House for “reconciliation” before heading to the White House where President Bush has his pen inked, ready for his signature.

In regards to everything that has happened this year; the subprime meltdown and just recently the fannie mae & freddie mac (by Rey Gallegos), this is a huge lift for the mortgage industry.

So what are these changes going to be in the near future? Tim Bradford explains it all hear. Proposed change to FHA MIP scheduled for change Jan 1, 2008.  But I will give you a quick breakdown from a source close to this issue. The new bill would :

• Increase the fha mortgage limits. There are still mixed reviews on what direction will be finalized when the bill is signed by the president. HUD has proposed that they use $417,000 across the board. And in high cost areas, keeping that number around $500,000 and in low cost areas around $290,000.  The old calculation was a little more complexed. FHA’s current loan limits for high-cost areas are derived from 87% of the government sponsored enterprise (GSE) and in lower-cost areas are 48% of the conforming loan limit. The other side of the new proposal would be that HUD uses 95 to 100% for the high-cost areas and 65% for the lower-cost areas. Which would be better?  Keeping the main number at $417,000. But either way would be a huge improvement over what we currently have.

• The original bill was looking at zero down payments. But what seems to be on the horizon is that they will be lowering the down payment of 3% to 1.5%.

• Allow FHA to offer another type of term, such as a 40-year mortgage. This would serve two different purposes. It would make it easier for someone to qualify for a little more of a house while keeping their payment the same if the house value was less. Or, it would just give them a cheaper payment if comparing the same price of a home.

• Also allow FHA to price borrowers accordingly to the credit risks that are described in Tim Bradford’s post mentioned above. Even though this is defined as risk base pricing, something that we have seen with the conventional market just recently, this will still be cheaper for everyone involved. How this will work? Those with least amount of money down and with the lowest credit scores will pay the highest premium. You might think that this is negative, but it really isn’t. Right now, the premium adjustment, which is called One-Time Mortgage Insurance Premium, is only 1.5% of the base loan amount. There is talk that they would raise it to 3% as a maximum. Again, this is not as bad as it seems because back in the mid ’90s it was 3%. It’s been lowered 3 times since then.

Some interesting facts in regards to previous loan amounts :

• FHA has been priced out of many area housing markets. In California, FHA insured only about 5,000 home mortgages in 2005, down 95 percent from 109,000 in 2000.

My Opinion :  Will there be a Negative Impact?   Yes. Those lenders and loan officer’s that don’t know the basics of FHA financing prior to the new bill being approved. And those lenders that are trying to get FHA approved now so they can jump into the game. Why will this be negative?  I can say that I know for a fact that there were many loan officers that didn’t take their client FHA because conventional delegated underwriting and subprime was easier. I even worked with some that even told me so. But the end result? This will be very positive for so many Americans.  Even those that have 660 credit scores, FHA will be better now.

I would have to estimate that over 80% of the FHA loans approved are approved manually. Which means that you just can’t fool an underwriting system. An underwriter has to physically review the income, assets, and most of all, the credit. It has to make sense and most of all, that underwriter’s license could be on the hook. Keep in mind, it costs the lender money to be FHA approved, hence why so many never signed up in the past. But now so many want to jump onto this fast moving vessel that will be sailing into the sunset. The ship that might just ridden some of this mess that was created in the last several years. Make sure that you speak with an FHA Expert and not someone claiming to be part of this elite crew.

Some key FHA tips :

• Shoppers that shop themselves right out of the market……

• FHA Shopping, rate shopping, fee shopping…. call it what you want, just be careful!!!

• Good Faith Estimate  –  What to look for when shopping……

• No Closing Cost Loans VS Closing Cost Loans

• FHA - Conventional - APR vs Rate –  Understanding the difference……

• FHA origination fee and what it means……

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Contrary to what the print media will tell you, it is a great time to buy a house in Ann Arbor, MI.

The surrounding area’s of Saline, Dexter, Chelsea, Ypsilanti, Manchester and any place in Washtenaw County has fantastic home buying opportunities.

The interest rates are still incredibly low. If you have good credit 0% financing is still available.

I just refinanced my own home, combining my Home Equity Line of Credit. (HELOC) and my primary mortgage into one 15 year rate at 5.75%.

Currently, we are still getting calls for Pfizer homes, and the MAJORITY of these are sold.

Many of my clients work with Maria Labie at Citizens First Bank for  their loans. As a banker she is able to hold many loans in portfolio that don’t meet Fannie Mae or Freddie Mac guidlelines.

As of March 1st, 2008 many of the guidelines will be changing.

FICO score < 575, regardless of LTV or AUS response

·         No Documentation (No Doc) Loans

·         No Income No Asset (NINA) Loans

·         Alt A loans with Non Traditional Credit

·         Alt A loans with a FICO score < 660

·         Property Inspection Waivers (PIWs) or Property Inspection Alternatives (PIAs)

*** If you are in the market for a new home, condo, or move-up don’t wait too long. You can begin your search of all the houses listed in Ann Arbor by clicking here.

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Who says there are no buyers in today’s real estate market?

Ann Arbor homes and condos are selling. While most areas throughout the board are showing a buyer’s market (over six months of inventory), there are some bright spots by area and price point throughout the residential and condo markets.

What is selling in this market? Properties are selling where price and quality converge. This is the case in every market, not just where there is an over abundance of inventory. The high levels of inventory only magnify this point and make it appear as though there are no buyers.

Price you home right and it will sell. I am seeing as a Realtor in Ann Arbor and Washtenaw County for 13 years that the MAJORITY of homes are priced to sell.

Ann Arbor:

Homes: Throughout Ann Arbor, there is a 6.9 month supply of homes currently on the market.

The $1 Million< price point is showing its weakness with over 4.5 years worth of inventory (55 months).

The $600,000-$699,999 price point is the strongest in Ann Arbor with only 3.7 months of inventory currently on the market, nearly a seller’s market (defined as 3 or fewer months of inventory).

SW Liberty to Main area has the least amount of inventory at 5.5 months.

Scarlett & E Pittsfield area of Ann Arbor is showing nearly 8.5 months of inventory.

Condos: Overall, the city of Ann Arbor is carrying over 11 months worth of

condominium inventory. Unfortunately, the $500,000+ price point is saturated with 73 months of inventory.

Westside S of M14 shows the softest condo market with nearly 22

months of inventory.

NE & North Campus maintains under 7.4 months of inventory, the strongest condo market in Ann Arbor.

If you would like a detail report of every area in Ann Arbor, and the Washtenaw County Quarterly Marketing reports just email me at

Missy@MissyCaulk.com

Buyers: You will not know the market has turned until it is over. So Search for all the homes in Washtenaw County at Search Ann Arbor Houses.

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