New foreclosure tracking tool coming to Ann Arbor real estate market
We’ve heard plenty about the national foreclosure crisis.
It’s killing both property values and the "American Dream" of home ownership, we’ve been told, leaving the real estate industry off-balance amid one of the most difficult sales climates that anyone working today can remember.
But foreclosures also represent opportunity - and, on a home-by-home basis, a glimpse into some pretty rugged properties and situations.
Some of us want to be able to find foreclosures. To keep track of new price floors. To Web-based window-peep. To place investment funds.
And now, by the end of this year, both Realtors and consumers in Ann Arbor will have a new tool to track foreclosures as they come on the market and later as they’re sold: The Ann Arbor Area Board of Realtors will add “bank-owned” to the voluntary fields in its Multiple Listing Service.
The issue came up in late 2008, said Executive Director Nancy Merdzinski, as agents - along with the rest of us - watched waves of foreclosures enter the market at prices that dropped the bar in just about every neighborhood they touched.
“We wanted to be able to pull those out and be able to have better knowledge of the market and what was going on,” Merdzinski said. “And we simply didn’t have the ability to do that.”
Key among those tools was being able to use sales data on comparative market analyses.Â
Since a foreclosure may not be a true gauge of market price, agents and owners want to see data that’s not colored by a below-market pricing on a house that may have serious damage or repairs needs.
Consumers also will value the addition, Merdzinski said.
Agents who already work their own data have found workarounds to the absence of a foreclosure coding. Kathy Toth of Keller Williams Ann Arbor lists 117 active foreclosures on her Website, with the compilation based on key word searches like “bank addendum” and “supercedes local contract.”
And many brokerage Websites also list their own foreclosure listings under that heading, giving consumers the chance to find properties that have been repossessed.
The new search won’t be foolproof. It’s voluntary, so up to the agent to designate. And a bank may seek to keep the information out of the MLS, even though plenty of other clues - including public records searches - won’t keep it private from determined sleuthing.
The timing of the change depends on MLS contract updates, Merdzinski said. The AAABOR rolled that change into regular updating by the MLS provider, who is now saying the foreclosure addition should be finalized in September.
“I think it’s a terrific idea,” said Andra Anteau of Edward Surovell Realtors in Ann Arbor. “It lets the consumer know this house is a great buy because foreclosures tend to be well-priced.”
Anteau did 81 transactions in 2008, and she estimates about 75 percent were bank-owned homes.
Buyers, she said, are out there. So are the bank-owned homes, since Michigan is among the top foreclosure states in the U.S.
“This is a tool for dealing with the market,” Merdzinski said. “It will facilitate searching … and let us clarify our statistics.”
Comments
AlphaAlpha
Mon, Jul 5, 2010 : 4:39 p.m.
"Since a foreclosure may not be a true gauge of market price,..." "May not"? Is. It's as true as any other "gauge". As true as the recent sale. Many banks are withholding their 'collateral' from the market to avoid flooding the market with listings, and to avoid having to actually mark to market the lower values of their collateral. The second reason is significant; many banks would be rendered insolvent if they recognized true home values. Many bank are delaying foreclosures as well; how surprised some are to continue receiving tax bills on property they thought they had returned to a lender. The bank held inventory is large; depressed prices should be the norm for many years. The demand for housing (which is increasingly perceived as a bad investment, contrary to the claims of "Realtors") is low and falling. Even historic low mortgage rates (~4.7% for 30 years) aren't helping. The time to buy houses will be in a few years, when everyone 'knows' they are bad investments.
UPSman
Fri, Aug 21, 2009 : 5:54 a.m.
How about showing what the property taxes are? Or how much the association fees are on condo's?
a2grateful
Thu, Aug 20, 2009 : 9:02 a.m.
Trying to hide the data is akin to ostrich with its head in the ground, hoping a problem will magically disappear. It is a market fact of life that foreclosures are representative of market value.... As usual, the market decides value: willing buyer, willing seller, available financing, reasonable exposure time, arms-length transaction, etc.... If a foreclosure is listed too low, it will be subject to multiple bids in a bidding war.... If a foreclosure is listed too high, it will sit on the market for sale until the price makes sense in terms of acquisition risk in relation to perceived purchase benefit.... The fear is that only the foreclosure houses will preview or sold if they are identified in a listing, stopping sales in the non-foreclosure market segment. This may or may not be true. Just hope that this condition is short lived for everyone's sake.... We need to work through this time. Having proper information available helps. Although foreclosure houses may be cheaper, they may also need incredible amounts of work and cash to make them desirable living places.... Such is the market in 2009. There is no reason to hide this. Disclosure of such information by the local Realtor board makes good sense.
Paula Gardner
Thu, Aug 20, 2009 : 6:53 a.m.
Here's some additional info about local foreclosures from Washtenaw County Clerk Lawrence Kestenbaum, who recently sent this news release that tracks Sheriff's Deed sales - which is when property ownership reverts to bank-owned. Many - if not most - of those houses will end up on the market as bank-owned after the redemption period concludes: "... The number of foreclosures recorded through July of this year is still less than 85 percent of the total recorded through July of last year. In the first seven months of 2009 the number of Sheriff Deeds recorded by the Register of Deeds averaged 107 documents per month, compared to a monthly average of 127 per month in the first seven months of 2008, Kestenbaum says. Over the same period weve seen other real property recordings deeds of property from one owner to another, and new and refinanced mortgages increase substantially from the very low levels we observed in January, February and March.