Positive signs for the local economy – Tecumseh area real estate market is heating up
There are signs that the Michigan economy is rebounding — slowly, but surely. The following is the first in a series of stories that point to a more positive outlook in areas that affect Tecumseh and the surrounding communities.
There is no question that not everyone is feeling it, but if you are looking for a glimmer of hope in this struggling economy, look no farther than the front lawns in Tecumseh neighborhoods. What the casual observer may or may not notice is the lack of for-sale signs.
The real estate market hit the skids in the 2008 slump and streets were lined with for-sale signs with no one with enough ready capital to purchase them. Foreclosures began to skyrocket, not only in Michigan, but all over the nation. The result was a plunge in property values, which had its devastating effect not only on personal lives for those who could not make their mortgage payments, but also on municipal and school budgets, whose revenues depend on the value of local property.
“We are in a period of inventory shortage right now,” said Lenawee County Association of Realtors President Jeffrey Rising. “We have seen home values rise eight to 10 percent over the last year, which reflects a national trend. Most of the foreclosures for property over $50,000 have burned off, and there are a lot of buyers who are looking for homes in that range.”
Rising said that there are still many foreclosures on the books, but they are mainly for homes and properties under the $50,000 mark, and the prevailing trend is away from a buyers’ market and swinging back toward a sellers’ market.
“One of the main problems is that there are many good homes out there that are still underwater, but we’re reaching the tipping point,” said Rising. Indications according to current market activity are that homeowners whose property is “under water,” meaning that they owe more than the property is worth, need only hold out a little longer until the market catches up.
The lag between the market and value will take a little time to level out, and the entities, such as the aforementioned cities and schools, which depend heavily on revenue from property taxes, are still feeling the pinch.
Tecumseh city assessor Amanda Lacelle reports that property value for the city remained flat through 2012, despite the up-tick in the real estate market, but she said that she is cautiously optimistic.
“I’m working on the budget a year in advance, so I have to base my projections on the previous year,” Lacelle said. “But I have heard that Realtors are being swamped by bids on whatever property is available, and that is an encouraging sign. We’re beginning to see home sale closures trickling in. Some neighborhoods are showing an increase in property values, but hard numbers are not available yet.”
Local real estate agents are enthusiastic about the interest that is being shown in the available properties.
Realtor Greg Brown of Tecumseh’s Howard Hanna said that the up-tick is good news for both buyers and sellers. “The homes have to be priced right,” he said, “but when they are, they don’t stay on the market long. That’s a big change from even a year ago. Right now things are looking very good.”
The boom is not restricted to home sales to families looking to establish a beachhead in the middle class. Rentals have taken off also, according to national reports. There are two reasons behind the new interest in rentals. The first is that investors with enough money are purchasing property, and the second is that there are more people wishing to avoid the responsibility of home ownership. The recent recession has made many people leery of investing their life savings in a home after seeing what can happen to property values in a shaky economy.
Realtor Jeff Niedermier said that the new Tecumseh Foundation Realty office is seeing a lot of action. “We’ve only been open for about a week, but we are staying busy,” he said. “Tecumseh is getting a lot of interest. The market is definitely making a turn for the better. Right now there are more buyers than sellers.”
The brighter picture in the real estate business bodes well for a more general turnaround for the economy. Investors spending money on homes, whether to live in or to lease out, has an effect that reverberates in all sectors of the economy.