Ann Arbor Real Estate Talk

Michigan football, is all about the team, the team, the team.

Bo’s speech is inspiring to me, because it is spoken from the heart, in the passion only he can do.

GO BLUE!

Saline, Michigan Real Estate Market Reports

When I talk to buyers about the real estate market in Saline, I like to show a comparison of where the Saline Real Estate Market is now vs where we were the Saline Market was a year ago.

You can see from the chart below that the inventory in Saline, MI is DOWN. That is a good thing, unless you are a buyer looking in a certain price point or neighborhood.

Price of homes in Saline, Real Estate Market?

When working with buyers looking to purchase a home in Saline, Michigan it is important to know if the Saline Real Estate Market is consistent, down or increasing in value.

You can see from this graph that we hit a low ($192,000.) in March 2011 but now the price point is up to almost $220,000. This brings me back to the first point, inventory in Saline…Suppy vs Demand equals higher sale prices.

Saline Real Estate Market Report

The next chart is done monthly by Affinity Valuations, a local appraiser that I have known for years and trust completely.

I like this market report chart because Pete graphs out for the Saline, Michigan Real Estate Market data over a three year period. In this graph which Pete gleans from the Ann Arbor Area Board of Realtors, You can see the trend in price per square feet, number of sales each month.

The trend is price per square foot in Saline, Michigan has been consistent for the last three years.

Saline Real Estate Market Reports by email

On my Ann Arbor Real Estate Talk blog you can get monthly updates on the real estate market in Saline, either by checking back monthly or signing up for Executive Saline Real Estate Market Reports to be emailed to you.

Ann Arbor home sellers, did you know there is a tax of 3.8% tax increase included in the Obama Health Care bill when you sell your home after January 1, 2013?

How the 3.8% Tax Works on the  Sale of your Ann Arbor Home

Here is how the 3.8% tax increase will work, if you have a gain of less than $250,000.00 for single payers and $500,000 for joint payers you will not be taxed. It does NOT override the Federal Income Tax Law.

However, if you have owned your home for many years, and make $600,000.00, then your taxes would be increased 3.8% on the gain from the sale of your home starting January 1, 2013 . In this scenario you would pay 3.8% or  $3,800.00 on the gain over $500,000. For a single filer it would be anything over the $250,000.00 level.

If you purchased your home for $200,000. and are single, and sell it for $300,000. then your additional 3.8% tax liability could potentially be $3800.00 used to fund Medicare.

I know the tax increase doesn’t apply to that many people, less than 2% nationwide,  but for Ann Arbor home sellers, it is still a tax increase written into the Health Care Bill that many Ann Arbor home sellers may not know about. We live in a fairly wealthy community in Ann Arbor so this 3.8% tax increase will potentially apply to more.

 The 3.8% tax increase is for Medicare

The revenues generated from this 3.8% tax increase will be allocated to the Medicare Trust Fund that is part of the Social Security System. That fund is currently on shaky financial footing.

The Medicare tax hike would for the first time incorporate filing status into each person’s Medicare tax liability, and also for the first time, the Medicare tax will not apply just to wages but also to investment income such as income from capital gains, dividends, interest and rental property. In its first year of application, 2013, the new Medicare tax will hit approximately the top-earning two percent of families.

According to the National Association of Realtors, “The new 3.8% Medicare tax includes in the Health Care bill is assessed only when Adjusted Gross Income (AGI) is more than $200,000/$250,000. AGI includes net income from interest, dividends, rents and capital gains, as well as earned compensation and several additional forms of income presented on a Form 1040 Income Tax Return.

The tax is NOT imposed on the total AGI, nor is it imposed solely on the investment income. Rather, the taxable amount will depend on the operation of a formula. The taxpayer will determine the LESSER of (1) net investment income OR (2) the excess of AGI over the $200,000/$250,000 AGI thresholds. Thus, if net investment income is the smaller amount, then the 3.8% tax is applied only to the net investment income amount. If the excess over the thresholds is the smaller amount, then the 3.8% tax would apply only to the excess amount.

If you would like me to I would be glad to send you a pdf file published by the National Association of Realtor where you can read about different scenerio’s for investment properties, vacation homes etc..

Just send me an email or leave it in the comments below. There have been a lot of rumors circulating about this 3.8% tax increase on the sale of your home, let me know if you need the document.

Rentals in Ann Arbor are scarce.

Currently rentals on the market for single family homes in Ann Arbor are slim to none.

• Between the range of 500-850 a month there are only 2 rentals in Ann Arbor and I know one of them has a lease application on it.
• Between the range of 855-1200 a month in rent there are also only two rentals in Ann Arbor;one at 980.00 and one at 1050.00

Ann Arbor is a transient community in many ways, we have Dr.’s, Fellows, Residents that come in for 2-5 years, many just want to rent due to the uncertainty of the Michigan market. Plus the students that are looking to rent homes together which changes each semester.

Why are Rentals Scarce In Ann Arbor?

One reason that the rental market is scarce in Ann Arbor is due to the amount of Short Sales and Foreclosures of people that can not get a mortgage right now.

Another reason the rental market in Ann Arbor is scarce is consumers don’t have a lot of confidence that they won’t loose money if they are only going to live here a short time.

Scarcity of Rentals Creates Higher Prices

If you are a seller that has not been able to sell your home, now would be a great time to rent your Ann Arbor home. When the Missy Caulk Team takes a listing contract, it is put in the Ann Arbor Area MLS, we obtain a rental application from the potential tenants, one application for each person renting the property, we pull their credit so you can make a good decision on who you want to rent your home too.

Rental Options

Renting with an option to buy in Ann Arbor is also a great opportunity for both buyer and seller.The seller can rent out the home for a couple of years and when the tenant is able to get a mortgage they can proceed with the purchase. We get calls on this all the time.

Rentals in Ann Arbor are scarce but they don’t have to be with creative thinking in todays market.

Is Fannie Mae and Freddie Mac really helping homeowners stay in their homes?

Well not according to the investigative reporting at the Detroit Free Press.  They recently did a study and obtained documents via Freedom of Information requests and the results are disturbing for Ann Arbor Area home owners.

In December Fannie Mae announced via a top executive that they were doing everything possible to help homeowners stay in their homes. However, the documents 2300 of them proved otherwise. While the banks were trying to work out loan motifications via the HAMP (Home Affordable Modification Program) Fannie and Freddie were telling them to “Proceed with sale”.

Who It Hurts

• The obvious is the homeowner who is in the middle of trying to negotiate with the bank for a loan modification.
• It hurts the tax payers (us) as Fannie Mae knows we the home owners will bail them out. Right now they have an unlimited  check book to get more money from the government (or us as the taxpayers.)
• It may clean up the books but it hurts neighborhoods and property values for all of us.
• Since Fannie Mae and Freddie Mac were taken over by the government we have cost us over $1.4 billion.

Alan White a law professor at Valparaiso University who reviewed the documents obtained from the FREEP said, ” they are sabotaging the nations foreclosure crisis and helping drive down property values.”

Read the entire article on the FREEP for more details.

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What was the market like in July for the Ann Arbor Area ?

Well the news for July in Ann Arbor is really uplifting. Residential sales were up 29% over July 2010 with 331 closed transactions. There were 415 sales of all property types, which is a 10% increase.

The average sale price increased to $212,663. In July of 2010 the average sale price was $160,000.

Here are the stat’s for the individual school area’s. Which is how we search for homes in the Ann Arbor Area MLS.

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