Every time the real estate market turns, someone potentially benefits and someone potentially loses out. When property values soar, home owners worry about paying higher property taxes. When values worsen, the end never seems in sight. In the current downturn, the losers are clearly identified as those facing foreclosure or who–because of market, job and credit conditions–feel like they have nowhere else to turn but towards using their house as an ATM machine or selling at a deeply reduced price.

The good news–if you can call it that–is, there are some mighty good deals to be had these days, and one needs to look no further than yesterday’s front page of The Free Press to see what we’re referring to. See the picture of the house below–the one with all the arrows pointing toward it?

Here’s a better picture:

If you had to guess how much this house is selling for–based just on the above image alone–what would you say? $750,000 to $1,000,000? After all, it has:

• 7 bedrooms
• 5 full bathrooms
• 2 half bathrooms
• Living room
• Dining room
• Family room
• Breakfast room
• Florida room / Sunroom
• In-law quarters
• Library
• Partially finished basement

All told, this mansion built in 1905 has over 7,000 square feet (7,187 to be exact), but because of current housing conditions, it is priced to move, and move quickly. Before we tell you the asking price, read the following clip from yesterday’s The Free Press:

Struggling housing market has Detroit’s gems slashing prices

January 19, 2008

BY ZACHARY GORCHOW
FREE PRESS STAFF WRITER

How can you own a house worthy of a millionaire, at a price typical of your standard three-bedroom, two-bath bungalow?

It sounds too good to be true. But in fact, buyers can find scores of historic, large homes available for astonishing bargains — some under $200,000 — in beautiful Detroit neighborhoods, deals that real estate agents say haven’t been this good in decades.

The listings are eye-popping, like the stunning six-bedroom, four-bath, 5,500-square-foot, 1923 colonial in the Boston-Edison neighborhood for $249,500 — about $45 a square foot. Or the five-bedroom, three-bath, 2,700-square-foot colonial in the University District for $149,900. If it’s a Cape Cod you’re eyeing, there’s the seven-bedroom, three-and-a-half-bath, 4,650-square-foot home in Indian Village for $314,999.

But what frustrates real estate agents and owners is the struggle to sell such historic gems — even at these prices. And some have slashed their asking prices by tens of thousands of dollars…

…The real estate market is sluggish everywhere in metro Detroit, and prices have plummeted.
But it’s in Detroit where prices have dropped the most, said Ron Simpson, the outgoing president of the Detroit Association of Realtors… Buyers have long been able to get more house for their money in Detroit than most suburbs, but today’s deals in the city are at “a whole new level,” Simpson said. …

… In the West Village on the city’s east side, when residents learn of someone interested in buying a house in Detroit, they recruit them to their neighborhood by taking them on a one-on-one tour and introducing them to the neighbors, said Bill Swanson, 33, a West Village resident who has conducted some of the tours. Four people have bought homes in the neighborhood in the last year thanks to this effort, Swanson said. “Once you meet people and realize it’s a great neighborhood, it makes buying in the neighborhood really easy,” he said.

Indian Village is another prized area in Detroit. There, a seven-bedroom, six-bath, 7,187-square-foot colonial is listed for $349,995. “A comparable house somewhere else would be millions,” said Joy Santiago, the house’s real estate agent. “It definitely should have gone by now. These are really good prices.”

That’s right… the 7,000+ square foot house referenced above–it’s in the Indian Village section of Detroit–is priced at just $349,995! In many other markets, this historical gem would sell for around $800k to $1 million. Interested in learning more? Here a few additional shots, this time from the interior:

To learn more about this property or others like it, call our office today and ask for Joy Santiago. The office number is (586) 751-0000.

Between now and the time that next year’s Presidential election rolls around may prove to be one of the best times in history for Michigan real estate investors to score big when it comes to buying properties they plan on renovating and flipping. Home prices in Detroit are falling at the fastest rate in 16 years, Standard & Poor’s reported earlier today, which spells good news for flippers on the entry side of the house flipping equation.

Data released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices–a leading measure of U.S. home prices–shows a continuation of negative annual returns in what it calls the “10-City” and the “20-City” composite, which includes Detroit. Both composite indices have registered negative annual growth rates since the beginning of the year. In addition, both indices rate of decline has become larger in each of the seven months from January through July.

For those of you who like charts and graphs, click on the image below, which depicts the annual returns of the 10-City Composite and the 20-City Composite, and shows that the 10-City Composite was down 4.5% versus July of 2006, while the 20-City Composite was down 3.9% over the same time period:

Click on the table below for a summary of the most recent city-by-city results, which includes information for Detroit:

As we have said before, current market conditions are ushering in what we here at Ralph Roberts Realty believe to be a once in a lifetime opportunity to invest in real estate. Serious house flippers–especially those who are flush with cash–should consider now to be a great time to buy up flipable properties.

if you or someone you know is interested in investing in flipping properties, please contact our office. Our founder, Ralph R. Roberts, wrote the book on flipping houses the right way (”Flipping Houses For Dummies“).

For some Real Estate investors, the recent downturn in the housing market looks like opportunity. Some of the most aggressive investors go after foreclosures; homes that people have lost after they have fallen behind on mortgage payments or taxes. In light of the fact that John Wiley & Sons just released our founder’s latest book, “Foreclosure Investing For Dummies,” Ralph recently sat down with The Washington Post’s Mary Ellen Slayter to talk one-on-one about the pros and cons of investing in foreclosures and how investors can minimize risks while maximizing returns.

An edited transcript of the conversation follows.

Tips From a Foreclosure Investor

Sunday, July 1, 2007; Page F06

Q. Who is a good candidate for investing in foreclosures?

A. It’s right for someone with a secure job, solid cash flow and lots of cash on hand — someone who wants to make some money on the side. If you’re married, your spouse needs to be on board, too. I like for people to use their own money. But if you don’t have enough cash but you’re willing to do the work, find a partner. My first “bank” was my grandmother. I didn’t pay her interest, but every time I made a deal, I took her out to lunch. If you really want to do it, you can always find sources of investment capital.

And who’s not a good candidate?

Anyone who thinks this is easy money. It’s a myth, perpetuated by all these late-night TV gurus, that you can get rich quick doing this. If you’re in financial trouble, this is not going to bail you out.

Why would someone want to look into this now?

There’s never been quite so many opportunities for individual investors to buy foreclosures. There are just so many of them. Before, the market was chiefly controlled by good old boy networks, through the banks’ brokers.

How does it work in declining markets, which are the ones that are most likely to have lots of foreclosures?

You account for this in the price you pay for the property. You make your profit when you buy, after all; you realize it when you sell. There’s a formula in the book that helps you adjust for a soft or flat market. My wife once pointed out to me that no matter what the economy looks like, people are still going to buy and sell houses. They’re still going to get married and start families. Even if 10 percent of workers are laid off, the other 90 percent are still working. They will still need housing.

Describe the perfect property for the foreclosure investor.

It should be in a good neighborhood. And you should be able to see clearly what you need to do to fix it up and sell it.

What kind of work is usually involved?

All kinds of things, inside and out. Look at the doors, windows, roof, concrete — everything. Properties that are in foreclosure aren’t always in great condition. After all, the owners couldn’t afford the mortgage payments. They probably couldn’t pay for maintenance either. It’s important to have a thorough, professional home inspection before buying. But if that’s not possible, then you should at least inspect the outside of the property yourself — all four sides.

You’ll also need staging (making the property look pretty) to move the property if the market is slow. Once you start working, multitask to fix things up as quickly as possible. Timing is everything. Every day you keep a house off the market, you’re losing money.

What types of properties should investors avoid?

Don’t buy if there are a lot of distressed properties on a block.

Don’t invest in foreclosures long distance. You need to be able to see what you’re buying. And don’t touch pre-construction projects.

Also, avoid any deal in which somebody promises you cash back at closing. This is never legal. Stay away from that.

What are some other things that potential investors should keep in mind?

Always have a Plan B. Not every house on the market sells right away. You may need to rent the place out for a year or two after you fix it up. This isn’t necessarily a bad thing. It can lower the tax rate on your capital gains .

And be prepared to lose money sometimes. Even I don’t hit home runs every time.

What about guilt? Do you ever feel bad that by profiting from foreclosures, you’re making money off other people’s hardship? How should people handle those feelings?

Of course you can feel guilty. So don’t take advantage of people. You’ve got to try to make it a win-win. Sometimes the best thing to do is help the person keep their house. I’ve run into situations like this, including one in which the woman who co-owned the house just got behind after one bad event. She didn’t want to ask for help from her family. But instead of buying the house after foreclosure, we made some phone calls that helped her keep it. You’ll get more opportunities that way than being a vulture. And you’ll sleep better at night.

For more information about Ralph’s latest book, “Foreclosure Investing For Dummies,” please read this blog entry on his other site, AboutRalph.com.

To order “Foreclosure Investing For Dummies,” go to Amazon.com.

Finally, if you or someone you know is interested in investing in foreclosed properties, please contact the office. Our staff is ready, willing and able to advise you in the best strategy for your situation.

From Detroit Free Press Business Writer Greta Guest (published on Tuesday, June 26, 2007):

Sales of new homes in the Midwest rose a robust 30.8% in May, while sales in other parts of the nation shriveled, according to a Commerce Department report today.

In May, 153,000 new homes were sold, up from 117,000 in April in the Midwest. But as compared to May 2006, new home sales dropped 14.5% in the Midwest.

“Where in the Midwest?” asked local Realtor Ralph Roberts, who has offices in Warren, Southfield and Washington Township. “I don’t see an increase in new construction in Michigan at all. It’s still soft.”

New home sales nationwide were down 1.6% from April, or an adjusted annual rate of 915,000. And they were off 15.8% from the May 2006 pace of 1.1 million homes.

Other regions of the country saw declines from the April pace including the northeast, with an 11% drop, the south, with a 7.3% decline and the west, with a 1.9% drop.

The median sales price of new homes sold in May was $236,100, a drop of 0.9% from the same month in 2006.

If you are thinking of buying your first piece of Macomb County real estate, you now have more options than at any other time in the history of the Detroit Metro area! Did you know…

• Bad credit is not as big a problem you think. If you have bruised or bad credit, lenders are more flexible and will help you buy. Even if you don’t have money for the down payment, there are options you can utilize.
• If you are not ready to financially commit but need to move, you have options. There are “Lease with Option to Buy” homes all over Macomb County. Sellers and even banks holding foreclosed homes are willing to offer this, just to get a small return on their homes.
• You have more buying power now. Think of it, a 6 percent interest rate on a mortgage gives you more house for the dollar. Additionally, some homes are discounted by as much as $25,000 to $100,000! These two factors working at the same time in Macomb County real estate are like pure gold in your pocket!
• You have more homes to view and compare. The inventory of homes for sale in Macomb County is staggering but it’s to your benefit. You can pick and choose the perfect home for you and your family.
• Sellers are thinking outside the box. Sellers are thinking creatively in order to get their homes sold. They are throwing in appliances, offering to pay some of your closing costs, and are willing to give a discount for new carpeting. Some sellers are even offering free vacations!

Take advantage of the unusual real estate market in Macomb County. Buy low and sell high later. It is a great investment!

For more information about buying your first home in Macomb County, contact Jeannie Sample: Your 24/7 Realtor at HomeCoach@hotmail.com, or call 810-614-2120 or 586-751-0000.

If you catch the doom-and-gloomnews on TV and in our newspapers, you would think we should see people hanging themselves from every visible yardarm in Macomb County and the metro-Detroit area. However, I am seeing new and exciting things happening this spring. The grip of winter is over and fear is lifting from people who are banding together! Putting aside their competitive instincts, other Realtors are calling me and we are working together to make things happen. We are not only thinking outside the box, but we are taking positive action.

In addition, homebuyers are peeking their heads out and making decisions again. The phones are ringing, the emails are filling up and homes are going on the market, which means more buyers are shifting.

With these facts in mind, if you are considering making a move, the time to act is now. In the dead of summer, it will be just that: dead. The Macomb County real estate market is very predictable in that regard. Sure, you will have to take less money for your home this year, but you will also get the deal of the century on your next home. There are deals out there that will simply amaze you. The key is to plan your Macomb County real estate move wisely and with care and take advantage of the spring surge.

Call Jeannie Sample for answers to all your Macomb County real estate questions: (810) 614-2120.

When you’ve been in the real estate business as long as I have, you start to develop your own language. In my new book, Flipping Houses For Dummies (ISBN: 0470043458 / John Wiley & Sons / November 2006), I cover how the housing market follows the law of supply and demand, and why its important for flippers to pay close attention to supply and demand-related trends.

I also introduce readers to the “Dontwanner”… a property that the owners don?¢‚Ǩ‚Ñ¢t want so much that they?¢‚Ǩ‚Ñ¢re willing to do anything to get rid of it, including offering it for sale at a deep discount. Think of a dontwanner as a ?¢‚Ǩ?ìYour Trash Is My Cash?¢‚Ǩ¬ù opportunity. As I tell my readers, one man’s trash is another man’s treasure.

If you look hard enough, you can find dontwanners in nearly every town in the United States. Locally, in the Warren/metro-Detroit area, we have more than our fair share of dontwanners. For more information on dontwanners–or any other type of home for that matter–give my office a call. Our talented agents and staff are ready, wiling, and able to make your next sale or purchase a fast and pleasant experience.

The National Association of Realtors?Ç¬Æ today announced that nationwide, existing-home sales for July were down 4.1 percent, while home prices here in mid-west are 10.1 percent lower than they were last summer. For homebuyers, this is very good news.

Higher interest rates are clearly dampening sales, but that’s good news for the housing market because it’s also drawing in new buyers. For years now, potential home buyers have been sitting on the sidelines, some ?¢‚ǨÀúkicking the tires,?¢‚Ǩ‚Ñ¢ but mostly waiting for sellers to compromise on prices and terms. Now, sellers in many areas of the country–including here in Michigan–are setting their home prices to reflect current market realities, which generally tends to benefit price sensitive buyers.

Earlier today I was interviewed for a segment that appeared on this evening’s ABC’s World News Tonight (click here to view the segment online). ABC’s camera crew followed me around as I showed them a $200k home that recently sold for $140k, and another where the buyers chose to slash $40k from their original selling price.

Existing-home sales here in the Midwest fell 5.9 percent in July, while the median price of a home in the Midwest was $178,000.

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!