Earlier this year, the Detroit City Council aggressively encouraged anyone who failed to pay their 2003 property taxes to do so before May 25, 2006, or face foreclosure and the loss of their homes. Now, a couple of months after the deadline, the nine-member City Council unanimously voted to approve the Mayor’s tax plan, which he says will provide homeowners with significant relief from the city’s high property-tax rate.

From Saturday’s online edition of the Detroit Free Press:

Detroiters’ efforts pay off: Council approves tax relief
By Marisol Bello
Free Press Staff Writer

In the last week, dozens of residents in 25 Detroit neighborhoods, from Rosedale Park to East English Village, have bombarded the Detroit City Council with letters, e-mails and phone calls, urging members to approve a plan to cut their property taxes by up to 35%.
On Friday, their efforts paid off.

The council voted unanimously to approve Mayor Kwame Kilpatrick’s tax plan, which he said he hopes will provide homeowners some relief from the city’s high property-tax rate. The cuts range from 18% to 35%, depending on the property’s value.

Themilie Bush, who lives in the Arden Park neighborhood, is one of dozens who wrote council members and urged her neighbors to do the same.

She and her husband bought their home in 2002. They pay $7,500 in property taxes, $5,000 in car insurance and $3,800 in homeowners insurance, she said.

She was ecstatic that her family would receive relief that would help them, and others like them, remain in the city.

“We appreciate that council took this first step,” Bush said.

About 20,000 homes are eligible for the tax cut. Homeowners are eligible if they bought their homes after 1997 and the homes sit on parcels mapped before 1968.

The cuts will take effect beginning July 1, 2007; the city will notify eligible homeowners by letter in the coming weeks.

The city plans to expand the program to 47 neighborhoods over the next three years.

Hats off to the Detroit City Council?¢‚Ǩ¬¶ rarely do homeowners ever see moves like this one. Way to go! Home ownership in metro-Detroit just became a little more affordable.

The July 24th issue of Time magazine had an interesting write-up about what inflation means to the average citizen. If you’re thinking about buying a house, and you do not subscribe to Time, here are some things to consider:

Inflation’s Impact on Your Debt:

Every time the Fed ups interest rates in response to inflation, that takes a bite out of anyone carrying a lot of credit-card debt or holding an adjustable-rate mortgage–the tools that have fueled the housing boom, particularly in the big metro areas of California and South Florida.

Ann Johnson, 57, a saleswoman in Kansas City, Mo., cringes thinking about what could happen to the mortgage that looked so appealing two years ago and wonders if she’ll be able to sell her condo in a cooling market. “I tell my sister to keep that spare bedroom open for me,” Johnson says. She also buys gas strategically on long trips to lower the cost of a tankful (hint: skip Kansas). Painful as it may be, that’s exactly the effect that Bernanke is looking for. As consumers limit their spending, inflation follows suit and tapers off in turn.

Inflation’s Impact on Your Salary:

One indicator that has lagged most others is the one attached to labor. Average weekly earnings rose 4% in May–not enough to keep pace with inflation. So even with a few extra dollars in their pockets, most workers have to cut corners to stay afloat. Believe it or not, economists consider this a good sign. If workers were successfully pressuring for higher wages, that would reflect an expectation of even more inflation to come and lead to a spiral of rising wages and prices.

It’s the job of the Fed, Bernanke has said, to use smart policy to keep those expectations in check by consistently taking action as soon as inflation starts to cut loose. “The Great Inflation of the 1970s,” as he calls it, is “an example of what can happen when inflation expectations are not well anchored.” So as long as we can stand a little lead in our pockets, relief may be in sight.

Inflation’s Impact on Your Wallet:

While tame compared with the double-digit rises of the 1970s, oil prices are again the driving force behind inflation, with energy costs rising 31% at an annual rate so far in 2006. That ripples through the rest of the economy, showing up as fuel surcharges on services like airline tickets (up 7.9% so far this year) and higher prices on pretty much anything that travels before reaching a store. Even clothing has been inching up after months of deep discounting. “I wouldn’t expect a lot of relief on gasoline prices,” says Richard Berner, chief U.S. economist at Morgan Stanley. In addition to geopolitical tension, the hurricane season and its potential to disrupt refineries on the Gulf of Mexico lie ahead. And as we grudgingly get used to $3-per-gal. gasoline–it’s been nearly two years since crude oil broke $50 a barrel–companies feel more comfortable passing along their own higher costs to customers.

Dorothy Bourdet has an interesting article in this morning’s online edition of The Detroit News (about our local real estate market). Key takeaways include:

• Over the past few years, acres of Metro Detroit soil that once fed corn and soybeans have been sliced into neat subdivisions with new colonials and trilevels. Now, those new homes are putting unwanted pressure on the housing market, adding to the mound of buyer options.
• Between 2001 and 2004, slightly more than 62,000 building permits were issued in Wayne, Oakland, Macomb and Livingston counties, according to Clarkston-based Housing Consultants, Inc. The pace has slowed since but the impact of that new-home surge lingers.
• While the seller’s market would undoubtedly be tough without the glut of new homes, the added competition makes it even tighter… Acres of new subdivisions have given buyers an option they didn’t have before.

If you would like to talk with us about the Warren/metro-Detroit Real Estate Market, please call our office today at 586-751-0000.

Detroit Free Press staff writers Amber Hunt and Ruby Bailey present a compelling argument for why now’s such a great time to buy real estate. From this Sunday’s online edition of the Free Press:

Owning a cottage Up North has been a dream of generations of Michiganders, but now the dream is in limbo for many and second homes aren’t selling like they used to. Properties in northern Michigan, where vacation homes are the bread and butter of dozens of real estate agencies, are going wanting.

“I’ve never seen anything like it,” said John A. Rowling, who runs his own agency in Lexington. “I’m glad I’m 88, and I’m glad the show’s about over.”

For buyers, there’s a big upside: People who’ve long wanted to buy their vacation or retirement dream homes only to watch prices climb every year finally have a buyer’s market. “It’s not all doom and gloom,” said Dennis Stanley, broker and co-owner of Coldwell Banker Pete Stanley & Associates in Au Gres, northeast of Standish.

On Friday, Stanley sold a home that had been on the market 510 days. The 700-square-foot cottage, along 50 feet of sandy Saginaw Bay beach, sold for $190,000 — 17% less than the original asking price of $229,000. “Properties are selling,” he said. “Sure, not as fast as we’d like, but we have nice properties and our location is wonderful.”

Click here for the rest of the article. And if you’re in the market for a house–be it a primary residence or vacation home–give us a call, because now truly is a great time to be looking!