$1 million-plus home sales hit record in metro Detroit

A red-hot auto industry, bullish stock market and steadily recovering home prices ignited the top end of the real estate market last year in suburban Detroit.

The number of home sales in the lofty $1 million-plus category hit a new tri-county high in 2013 as more C-suite executives moved up in property and out-of-staters transferred in for high-paying jobs.

There were 210 new and existing residences that sold for $1 million and above within Oakland, Wayne and Macomb counties, according to data compiled by Farmington Hills-based Realcomp, a multiple listing service. That is a 42% increase from 2012, which itself was a surprise boom for million-dollar homes sales after several molasses-like years during and after the housing collapse.

It was a solid year across all price points, with total sales in the tri-county region rising 26% from the previous year, according to a review of property transfer records by Bloomfield Township-based Advertising that Works, which tracks home sales.

The median home sale price was $116,250, up 29% from 2012 but still about 25% off the metro Detroit region’s price peak in 2005 and early 2006. As a whole, prices in metro Detroit were back to spring and summer 2008 levels.

Why the big rush for $1 million-plus homes? Experts attribute the boom in part to the return of strong profits in the auto industry, which translate to greater confidence and job security among the region’s executives, even those who aren’t directly in the car business.

\Doctors, lawyers, business owners and other top professionals were also feeling buoyant from the improving economy and, in many cases, were lured into buying by the still-low mortgage rates that most economists expect to continue rising this year.

What’s more, many of these high-net-worth individuals were in positions to benefit from the big stock market gains of 2013.

Home Sales Are Highest In Five Years

Just when it seemed that home sales were taking a breather, new data from the National Association of REALTORS® (NAR) says that home sales in 2013 were the highest since 2006, well before the housing meltdown.

For all of 2013, housing sales totaled 5.09 million units, which is 9.1 percent higher than in 2012.

Lawrence Yun, NAR chief economist, explained, “Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market. 

Yun says some momentum was lost toward the end of 2013 from disappointing job growth and limited inventory, but the year ended close to normal given the size of the population.

The national median existing-home price for all of 2013 was $197,100, which is 11.5 percent above the 2012 median of $176,800. That's the strongest gain since 2005 when prices rose 12.4 percent.

One bright spot was the decline of distressed homes in the mix. Foreclosures and short sales were 14 percent of December 2013 sales, down from 24 percent the year before.

Total housing inventory at the end of December fell 9.3 percent to 1.86 million existing homes on the market, a 4.6-month supply at the current sales pace.

Homes took longer to sell in December from November, but less time than in 2012.

The NAR suggests that home buyers and sellers face a few challenges in 2014. Mortgage rates are expected to continue to rise, and lenders and borrowers face new mortgage rules, such as new Qualified Mortgage underwriting standards.

But there's still plenty of pent-up demand, with more young adults moving out of their parents' home and into their own homes. The key is job growth, says the NAR. Only the confidence that stems from job security can enable first time buyers to buy and move-up buyers to purchase their next homes.

Fortunately, a new report by the U.S. Conference of Mayors suggests that nearly all U.S. cities are forecast to see economic growth this year, including some cities that have not really recovered from the Great Recession.

Southeast Michigan home prices increase by double-digits for 10th straight month

Growth for metro Detroit median home sales prices continued in December, rising by 40 percent year-over-year according to Farmington Hills-based Realcomp.

Realcomp, the multiple listings service for southeast Michigan, reported a median selling price of $120,800 for metro Detroit homes in December 2013, compared to $85,750 in the same month of 2012.

Sales in terms of units were flat at 4,077 homes sold in December 2013, compared to 4,069 a year prior.

Here's a closer look at year-over-year home sales by county in December:

Wayne
The median selling price jumped 67 percent to $75,000, while total units sold dropped 12 percent to 1,467 homes.

Oakland
The median selling price grew 21 percent to $168,250, while total units sold rose 9 percent to 1,452 homes.

Macomb
The median selling price rose 28 percent to $111,750, while the number of units sold increased 11 percent to 940 homes.

Livingston
The median selling price increased 13 percent to $180,950, while the total units sold fell 3 percent to 218 homes.

In the Grosse Pointe area, in which Realcomp includes all of the Pointes and Lake Township, the median selling price climbed 23 percent year-over-year to $214,900, while total sales by units grew 21 percent to 57 homes sold in December.

In the Detroit area, which includes the city of Detroit, Hamtramck, Harper Woods and Highland Park, the median selling price rose 30 percent to $13,000. Home sales by units dropped 23 percent to 358 homes.

Homes sold quicker in Metro Detroit in December of this year, spending 28 fewer days on the market at 49 days.

Across Realcomp's total coverage area, which includes southeast Michigan and a small portion of northern Ohio, on-market inventory shrunk 8 percent to 19,044 homes.

November Housing Prices Increase

The Detroit metro area's residential real estate market has been on a strong, nine-month rebound.

According to Farmington Hills-based Realcomp, the Multiple Listing Service for southeast Michigan, the median selling price of metro Detroit homes jumped 41 percent year-over-year in November to $120,250, The median selling price in metro Detroit in November 2012 was $85,100.

Real estate tracking firm Zillow reports that home values were up 23 percent in metro Detroit year-over-year in November. That's according to its Home Value Index, which it calculates by taking the median estimated home value for a given geographic area on a given day, including all residential, single-family addresses.

Americans Still Thankful for Home Ownership

The recession hasn’t shaken Americans’ confidence in home ownership, according to a new survey of 1,000 adults nationwide by NeighborWorks America.


About two-thirds of survey respondents say their opinion on home ownership has not changed over the past five years. Eighty-eight percent say owning a home is an important element of their “American Dream.” 
“Although the housing market took one of the largest hits ever, with home prices falling nationally and foreclosures rising to more than one million homes annually, home ownership remains a goal many want to achieve,” says Eileen Fitzgerald, CEO of NeighborWorks America. “But it’s important to also note that the poll also underscores that we need to have quality and affordable rental homes available for those people who simply prefer to rent.”

The majority of renters and home owners surveyed say they believe the home buying process is complicated. They attribute the major obstacles to personal finance issues, such as lack of job security or not having enough money for a down payment. One in four surveyed say they have no familiarity with the mortgage products available. 

Still, about half of those surveyed say they feel more prepared today than five years ago to buy a home. Forty percent, though, say they are less prepared. 

“These results tell us that most consumers believe that they know when the time is right for them to buy a home — and feel strongly that home ownership is important — but that their personal situation may have been affected in the past five years and is holding them back from pursuing home ownership,” Fitzgerald says.


Source: “Consumers’ View on Homeownership Remains Optimistic,” National Mortgage News (Nov. 22, 2013)

Can Programmable Thermostats Lower Heating Bills?

An average household spends $2,100 annually on utility bills, and with the expectation that bills will rise this winter, electric and energy companies have taken matters into their own hands with the creation of wireless programmable thermostats.

This advanced thermostat is released just in time, as more than 90 percent of homes in the United States will have higher heating bills this winter season, according to the U.S. Energy Information Administration.

With energy use predicted to pick up this month for areas from the Appalachians to the Midwest, and into the northern Rockies due to wintry conditions, these thermostats could save consumers money and energy.

According to the government-backed program, Energy Star, these thermostats when used properly could save consumers approximately $180 in energy costs every year.

How Programmable Thermostats Work:
Like any thermostat, the system regulates the temperature within a house or business through turning on or off the air conditioning or heating systems. However, the big difference is that these recently developed programmable thermostats can be controlled from any location, as long as the user has the application on their desktop or mobile phone.

With the ability to control them remotely, these wireless thermostats bring forth numerous benefits to customers.

Heating and cooling costs combined make up 45 percent of annual utility bills for the typical household, according to Energy Star.

However, with these thermostats, costs could potentially be reduced.

"The new generation of web-enabled thermostats offer promise for better comfort and more energy savings compared to early programmable thermostats," Principal Researcher for the Energy Center of Wisconsin Scott Pigg said.

The components of these contemporary thermostats allow users to program their thermostat to match their daily schedule.

"You can access them from anywhere in the world," Director of Product Marketing and Software Services for Honeywell, Brad Paine said. "You can make adjustments on the fly."


These thermostats and their corresponding applications let consumers view current temperature and humidity levels within their home or business, switch between heating and cooling modes, adjust temperatures, view energy history and set up various programming modes for vacation time or hours in which the residence is empty.

The mobile and desktop applications that go along with the thermostats also send customers various alerts for everything from temperature changes in their home to when to change a filter.
"Alerting is a big advantage," Paine said.

The company Honeywell has even developed a new wifi thermostat that is voice activated and allows buyers to interact hands-free with the device.


The Options:
While these programmable wifi thermostats can become pretty pricey, there are various options available under any budget.

Prices range from $100 to $500, depending on installation, thermostat features and companies.
Two of the leading companies in the field are Honeywell and Nest Energy, both of which offer mobile applications, various day settings and a multitude of other features.

Other companies such as LockState, Ecobee and Homeworks Worldwide also offer the thermostat product
.
Do They Actually Save Money?
"They can save several hundred dollars," Global Public Relations Manager for Honeywell Tammy Benker Swanson said.

The amount of money that can be saved is mostly based upon geographic location. However, fueling prices range by location dependent upon local weather, energy efficiency and the sheer size of the area being heated or cooled.

Despite claims that these thermostats save customers money, some studies suggest that this is only true in some cases.

A study conducted by the Energy Center of Wisconsin in 1999 found that the average self-reported thermostat setting does not vary substantially by the type of thermostat used.

The results of the study showed that the difference between those who set points from a programmable thermostat versus a manual thermostat were only 0.1 of a degree.

"It's more about the people who are controlling the thermostat then the technology," Principal Researcher for the Energy Center of Wisconsin Scott Pigg said.

However, the last finding of the study showed correlation supporting that a respondent's attitudes toward energy conservation and efficiency may affect their heating bill.

"People that are very conservation-oriented set back their thermostat a lot and they save a lot of money," Pigg said. "Other people put a premium on their comfort and they get their comfort but they pay for it."
Despite the research, Pigg agrees that these modern thermostats could potentially do a better job of keeping people comfortable while helping them save money on their heating and cooling bills.


"The new generation of web-enabled thermostats offer promise for better comfort and more energy savings compared to early programmable thermostats," Pigg said.

Metro Detroit median home selling prices rose 42 percent in October

 October marked the eighth straight month that the median selling price in Metro Detroit rose by double digits annually.

According to Realcomp, the Farmington Hills-based Multiple Listing Service for southeast Michigan, the median selling price for homes in Metro Detroit was up 41.9 percent year-over-year last month to $127,000.

Realcomp defines Metro Detroit as Wayne, Oakland, Livingston and Macomb counties.

While prices again climbed at a impressive clip, the number of total sales by units was far more modest in metro Detroit, as the 4,985 homes sold there last month represented a rise of just 2.0 percent over October 2012.

A closer look at year-over-year home sales by county in October:

Wayne
The median selling price jumped 43.6 percent to $75,000, while total units sold decreased 4.6 percent to 1,845 homes.

Oakland
The median selling price grew 18.7 percent to $174,550, while total units sold increased 10.8 percent to 1,787 homes.

Macomb
The median selling price rose 46.2 percent to $119,900, while total units sold edged up 0.9 percent to 1,078 homes.

Livingston
The median selling price increased 14.5 percent to $182,000, while the total units sold rose 1.1 percent to 275 homes.

Home sales by units in the Grosse Pointe area, in which Realcomp includes all of the Pointes and Lake Township, increased 10.0 percent to 66 homes in October, making it the only other region to have a double-digit rise in unit sale besides Oakland County. The median selling price in the Grosse Pointe area climbed 38.2 percent to $213,500 last month.

In the Detroit area, which includes the city of Detroit, Hamtramck, Harper Woods and Highland Park, home sales by units fell 9.6 percent to 463 homes, while the median selling price rose 17.4 percent to $13,500.

Across Realcomp's total coverage area, which includes southeast Michigan and a small portion of northern Ohio, on-market inventory shrunk 10.9 percent to 22,309 homes. Of the 6,345 homes sold across Reaclomp's coverage area in October, 5.6 percent of the transactions were short sales, and 34.5 percent were cash sales.

Homes sold quicker in October of this year, spending 22 fewer days on the market at 56 days.