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Monday, July 23, 2007Woe or Go?This past Saturday I toured 7 houses in Ann Arbor in an attempt to decide if I seriously want to start looking to buy there now. This came about because my Father mentioned to me a couple weeks (months?) ago that Ann Arbor's housing prices are dropping, and I might be able to afford them now. I can, and I do (want to).After coming back from that trip - a little sad for one house, a little happy over one, and much interested in at least three neighborhoods - I called up the real estate agent who helped me buy my condo to start seriously talking about selling the condo, and fast. The preliminary news is that I'll take a serious hit if I sold now. As in: I can't afford to sell without depleting ALL my savings, and that's if I'm lucky. Which would leave me without any money for a down payment for a home anywhere, much less Ann Arbor. I'm waiting on a specific report from my agent for what I can reasonably get for my condo. But if I want a quick sell I'd have to go lower, and that I simply can not afford at all. The money does not exist in my possession. But on the flip side, NOW is the time to buy in Ann Arbor. The market is about 20% lower than last year (that's HUGE), and there are plenty of houses under $200,000. Some of which are even really nice! Couple that with Fall on the way - and that being the best season to sell but not necessarily buy - and that one of the forces driving the market down (Pfizer moving and selling houses for its employees, so it can sell cheaper) seems it might be coming to and end, and interest rates at lows (though forecasts say they should get lower in the first quarter of 2008). Much of this information I found out today as, on the advice of my Mother, I've been looking around online for local real estate advice. Numbers wise, it would make sense to sell my condo and buy a house in Ann Arbor. 1) Selling now I'd be doing so at a 10% loss to what I bought my condo for. But Ann Arbor is at a 20% loss, so I'd actually be gaining 10% in value by doing the move. 2) As my Mom pointed out to me on Sunday during a two hour call that made me feel a lot better after the very disheartening news of Saturday: I've saved anywhere from $3,000 to $4,000 (or more) per year on my taxes due to owning the condo. Since I've had it for almost four years, that adds up to somewhere between $12,000 and $16,000 dollars. $15,500 is about what I'd be losing on selling the condo. So I've actually not lost any money, it'd be a wash. That's really not bad at all! The real issue comes in when accounting for having to pay the real estate agent(s) for selling the place. That's where I loose all the money I have saved up. I don't dare do a for sale by owner, *especially* in this market! Even if the market was good, I've dealt with real estate without an agent before. BAD idea. So... what can I do? I'm not sure yet. Mom proposed an interesting scenario with the quirk of the one house I've seen that I'm interested in. The real estate agent I'm buying with told me that closing costs can be rolled into the mortgage, so that would take care of needing money for that aspect. I'd still likely need to come up with about $7,000 for a down payment though. I wanted to do something with the bank that owns my mortgage now, but when I called I got referred to the new mortgage department who then referred me to the website. Sucky customer service. But I feel I need to try again in person, find a banker who will work with me to figure out what options there may be for me. That's a note to self. For my own reference, here are some links I found via my Google Search which very useful and may want to check again, or that are not yet useful but claim they will be: Ann Arbor’s #1 Source for Real Estate Information -> specifically: Ann Arbor Area Housing Stats Detroit News Online | Real-Estate http://househuntnews.com/mr.php?c=mi-ann-arbor http://househuntnews.com/mr.php?c=mi-livonia http://mioaklandcounty.com/blog/2007/03/15/michigans-real-estate-market-is-improving/ http://realtytimes.com/rtmcrloc/Michigan~Ann_Arbor http://realtytimes.com/rtmcrloc/Michigan~Livonia I also went to the NATIONAL ASSOCIATION OF REALTORS directly, and found some very interesting and good stuff there. Such as Metro Home Price Analysis Reports (here is Detroit's pdf) and at the very bottom of Home Buying and Selling Research is a set of PDFs giving "The Value of Housing Characteristics". Super interesting! Labels: Home Buying |
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