Editorial NAR is innocent.

NAR and MAR are completely innocent as they have tried for 40 years to teach and warn Realtors against price fixing. MAR & NAR are being asked to pay for a 3rd party's violation of criminal law, perhaps some KWs in Missouri.

I would rather see this go to the Supreme Court if necessary than have innocent pay a consent judgment. There is a high risk that NAR will declare bankruptcy as the membership will likely refuse to pay any of an unfair consent judgement. Why should Help You Sell in Michigan who introduced 4% forty years ago want to pay for KWs errors in Missouri? Realtors will resign by the 10s of thousands. I hope that this does no bring down the valuable MLS systems.

The court is so ridiculous. Not only do they have the wrong defendants as NAR but they look at the real estate world as single family houses. What about my Commercial, industrial, investment brokerage? They also have it all wrong that everyone charges 6%. I have had an hourly option since at least the year 2000. At least in Michigan I see a wide variety of percent (%) commissions ranging from 2% in the apartment investment world to 10%. I once paid 15% on a vacant lot up north that we owned! To add to the absurdity of the situation the lawyers are price fixing at 33% and might even include the plaintiff’s attorneys in the subject suit. NAR and the Insurance Companies should sue the Lawyers, (any lawyers quoting 33%) along with the Bar Associations. Then run these parallel cases up the ladder through the courts. Logic says we will win. The only losers might be those individual Realtors that did price fix. They should expelled from NAR and let them suffer the judgements, if any. The rest of us Realtors continue with a slightly modified MLS system.

Thanks for sharing my thoughts with decision makers.

Tom Goebel, Realtor Emeritus March 25, 2024

Windsor house values stablilzing after 12.5% fall from 1st of year.

 The sales price average in Wubdsor MLS is down 12 1/2% from the 1st of January. Peaked at $700,000 in March and is now stabilizing at $567,000.

One thought is that buyers were knowingly paying more than the appraised value for the past five years due to fairytale low interest rates. Mortgages need to be renewed every 5 years and as the note becomes "due" with the higher interest rates, many will have to sell as their mortgage payments double!

See the statistics published attached.

Thanks

Tom

 Very Successful Real Estate Commercial brokers meeting on February 22nd, 2023. Several hundred thousand dollars from a dozen participants were noted as available for the purchase of real estate in the USA and Canada.

The Group is named MAREX which is an acronym for the Michigan Association of Real Estate Exchangers. However, most participants are not geographically bound. Realtors present online were from Ontario, Michigan, Massachusetts, South Carolina, Illinois, and Colorado with properties in an even wider spectrum of locations. 

The next meeting is on March 15 at 2:30 PM Eastern time. Contact Tom Goebel for an invitation on Zoom.

Thank you for your articles on Windsor Real Estate. There are a few issues that affect reporting on the market values.

Our Real Estate Association uses a "mean" average. There are three legal averages, Mean, Mode, and Medium. A more correct way to report would be the Medium which is the middle number in the pack. For example, if there were 101 sales in a month the Medium Average would be the 51st with 50 being sold higher, and 50 being sold lower. 

Using the same example that month a few years back may have had one sale in excess of $1 million and one sale less than $100,000 with all three averages being at or very close to each other at $280,000.

Now imagine the next month had 5 sales over $1Million one of which was $10 Million and still only one sale under $100,000. Our Realtor organization may report the mean average jumped to $380,000 but in reality, the typical or the middle of the pack houses may have stayed pretty close to the $280,000 mark. The numbers may be available to you at the Windsor Essex Board of Realtors for recalculation of a Medium Average.

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Another number that I can not get a hold of is the number of new housing units built, being built, and planned to be built with applications for zoning or permits. My best guess from reading is that there are about 7,000 new housing units in Windsor for 2000 & 2001. I have requested numbers from the builders association and from the chamber of commerce with never a response. As a reporter, you may be able to get this very important set of numbers. At some level, all housing competes with each other. The basic economic law is demand and supply; ie a housing shortage vs an oversupply. Even when the new units might be rental apartments, the law of economics will apply. For example, my son is in London U.K. His budget for housing might be L1,500 (pounds) which is $2,560 Canadian per month. If he were to buy a 1,200 square foot condo or house with 20% down it would be a substandard wreck or he would have to settle for a tiny 700 sq foot residence. But if he rents for L1,500 pounds then he gets a respectable standard of living 1,200 sq foot apartment. Bottom line is that it is better to rent than own in an overheated market not to mention saving the 20% down.

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Please do research the number of new construction houses, condos, apartments, mobile homesites, and other "Residential NEW housing" units in Windsor and or Essex County for years 2020, 2021, and planned for 2022. This may be the key factor in determining the future market for the medium average house. In Windsor, we seem not to build enough until the market is in a severe shortage and then we build way too much until the market is oversupplied.

Thank you for your excellent reporting, please let me know if I can help, and do please share your findings. 

Tom

Real Estate Trends

Something funny happened to me at work this week. We manage our son’s condos and co-op apartments. The one near downtown San Francisco has been on the market for lease for months now. We reduced the lease price 3 times. The other apartment on Grosse Ile Michigan leased in one day with two takers!

San Francisco known as one of the tightest real estate markets in the world has an overabundance of 1 bedroom apartments to rent. Grosse Ile that had a slow rental market in January is now all rented up. Is this the trend.

Little early in the pandemic to know if these trends will continue but the reports are saying that there is a move back out of the urban centers and into the country and suburbs. As to the pandemic people want to reverse the trend from getting near the action and close to people. The safer place to be is out in the country not using any elevators and wide spacing between neighbors.

If one is out of work or working from home it no longer seems beneficial to pay the high dollar to be close to the central business centers. Might as well live where the rents are lower and congestion is less.

A long term concept that seems to be holding true is that one-bedrooms rent well in good economic times. People move out of parent's homes or are willing to pay the whole rent. Two bedrooms rent better in hard economic times as individuals double up to share the rent. A two-bedroom rent divided in half is well below the cost of a one-bedroom rent.

Some national are regional reports are suggesting that for at least as long as the pandemic is an issue, buyers are also moving from the central cities to the suburbs and countryside. This reverses a 20-year short term trend and a 200 year long term trend. Those trends were interrupted by 50 years of moving to the suburbs from the city by the prior generation or two.

Tom Goebel

Windsor MLS Statistics are in for April 2020

New Listings were down from 959 April 2019 by 514 to April 2020 at 445. This may actually be a mild benefit to sellers in that the lower the inventory the less competition. We could expect less listings as meeting and inspecting property would be difficult given the stay at home restrictions. Inventory was as 2,789 for sale in April 2019 and fell to 2,358 April 2020.

Sales fell dramatically by as expected. Agents were all but prohibited on showing property. Sales in April 2019 were at 634 and fell by 348 to 286 in April 2020. This in itself is not too disconcerting unless a seller is in a hurry. There is likely a pent up demand that will take affect once the restrictions are lifted. People may be able to tour properties in a normal fashion this summer.

The most troubling statistic was in the average price. Feb 2020 was the highest point in Windsor history with average sale price at $386,265. This fell in March to $357,874. The negative trend continued in April to an average price of $352,463. That is nearly a 9% drop in value in only 2 months. Annualized the rate is near 50% should that negative trend continue.

One or two months do not make a market. We will know better in the first week of June after the May statistics are out. May has at least a partial lockdown in affect so we may not really get a good fix on the market until late summer.

Tom Goebel May 4, 2020

update real estate "market" trends

House (residential) real estate market

Will wait until the end of the week for “April” sales and listing activity.

So far listing are up slightly 7.5% and sales are down dramatically in Windsor (64%) but modestly in SE Michigan 6.5%.

My guess is that there will be a “lag time” with “sales” being completed on contracts dated January through March but closed in March, April and May 2020. These are buyers that feel they MUST complete the sale. In SE Michigan the industry average for earnest money deposit is 3% rounded. In Windsor typically the deposit is $1k over $300k = less than 1%. Buyers may look at the minor deposit as an option rather than a “must close”. Simply blow off the deposit or have negotiated an extension due to pandemic.

The “value” of real estate will, as usual, depend on the demand-supply ratio. The SE Michigan MLS (Realcomp) is the 7^th or 8^th largest in the USA. Law of large numbers works well with 16,000+ agents and 7,202 sold (closed) in March 2020. This compares to April to date (27/30 days) at 3,668. Let us round that to 3800/7200 =or a decline of 48%. These are special times and we will not get a better picture until June when the April and May statistics are complete. Also, expect that the real estate industry will open back up over the next 2 months.

If listings continue to rise and sales continue to fall, Then expect deflation in real estate values as a result. There are many other factors that enter into a market including but not limited to pent up demand, interest rates, mortgage qualification factors (20% down vs 5% e.g.), Spring vs holiday season, consumer confidence (UofM) and employment. None of these, however, is as important as the old fashioned economic rule of demand vs supply.