Letters 11-23-2015

Cheering From Petoskey While red-eyed rats boil fanatically up from the ancient sewers of Paris to feast on pools of French blood, at the G20 meeting the farcical pied piper of 1600 Pennsylvania Avenue thrusts a bony finger at the president of the Russian Federation and yells: “liberté, égalité, fraternité, Clinton, Kerry--Obamaism!”

The Other Mothers And Fathers Regarding the very nice recent article on “The First Lady of Yoga,” I have taken many classes with Sandy Carden, and I consider her to be a great teacher. However, I feel the article is remiss to not even give acknowledgement to other very important yoga influences in northern Michigan...

Drop The Blue Angels The last time I went to the National Cherry Festival, I picked the wrong day. The Blue Angels were forcing everyone to duck and cover from the earsplitting cacophony overhead...

Real Advice For The Sick In the Nov. 16 article “Flu Fighters,” author Kristi Kates fails to mention the most basic tool in our arsenal during Influenza season... the flu vaccine! I understand you might be afraid of being the victim of Jenny McCarthyism, but the science is there...

Keeping Traverse City in the Dark Our environment is our greatest asset. It sustains our lives; it drives our economy. We ignore it at our peril. Northern Michigan Environmental Action Council (NMEAC) has submitted letters of concern to both the city commission and planning commission regarding the proposed 9-story buildings on Pine Street. We have requested an independent environmental assessment with clear answers before a land use permit is granted...

All About Them Another cartoon by Jen Sorensen that brings out the truth! Most of her cartoons are too slanted in a Socialist manner, but when she gets it correct, she hits the nail on the target! “Arizona is the first state to put a 12-month lifetime limit on welfare benefits.” That quote is in the opening panel... 

Unfair To County Employees It appears that the commissioners of Grand Traverse County will seek to remedy a shortfall in the 2016 budget by instituting cuts in expenditures, the most notable the reduction of contributions to various insurance benefits in place for county employees. As one example, the county’s contributions to health insurance premiums will decrease from ten to six percent in 2016. What this means, of course, is that if a county employee wishes to maintain coverage at the current level next year, the employee will have to come up with the difference...

Up, Not Out I would like to congratulate the Traverse City Planning Commission on their decision to approve the River West development. Traverse City will either grow up or grow out. For countless reasons, up is better than out. Or do we enjoy such things as traffic congestion and replacing wooded hillsides with hideous spectacles like the one behind Tom’s West Bay. At least that one is on the edge of town as opposed to in the formerly beautiful rolling meadows of Acme Township...

Lessons In Winning War I am saddened to hear the response of so many of legislators tasked with keeping our country safe. I listen and wonder if they know what “winning” this kind of conflict requires or even means? Did we win in Korea? Did we win in Vietnam? Are we winning in Afghanistan? How is Israel winning against the Palestinians? Will they “take out” Hezbollah...

Home · Articles · News · Letters · A home buyer‘s...
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A home buyer‘s Paradise...Lost?

Robert Downes - February 21st, 2011
A Home Buyer‘s Paradise... Lost?
Here in the Midwest, we live in a home-buyer’s paradise compared to much of the rest of the world. Realtor Jack Lane (who hosts a real estate show on WTCM-AM) notes that the median price for a home in Grand Traverse County in 2010 was $145,000. The region’s high is Leelanau County, where the median price was $205,000 last year. In Kalkaska County, however, the median price was just $65,000. The median price for a home in Petoskey is reportedly $169,000.
By contrast, the median price for a home in San Diego County last year was $305,000. It was $225,000 in Denver and $205,549 in Fort Lauderdale.
So we’ve got some bargains in Northern Michigan (Leelanau County notwithstanding) and you’d think there would be something of a land rush on here in the region.
What’s holding people back?
“History will show you that most people will wait and wait, hesitant to act before the entire crowd acts,” Lane says. “Therefore, not until interest rates begin to rise and headlines begin to say ‘Housing recovers!’ will you see the market kick back to the levels of ten years ago. Most buyers need ‘the psychological permission’ of the masses. The really smart people are either already wading into the water or are donning their hip-waders as you’re reading this.”
He adds that banks have largely returned to the practice of requiring 20% as a down payment on a mortgage (although the federal government is already backing 3% down loans). Banks are also dishing out the tough love for people with bad credit.
So, imagine a young family trying to come up with a 20% down payment on a $145,000 median-priced home -- that’s $29,000 -- a lot of loot if you’ve got kids and an iffy job situation, not to mention the closing costs. Or, imagine the well-off couple in the $100,000-$175,000 income range, who (as Lane notes) “tend to have typically less than stellar credit.”
Both parties may be out of luck in their hunt for a home for the time being.
Here’s what Lane says is the problem with today’s home-buying market, in order of importance:
1. Consumer confidence in real estate remains low. Until people again believe buying real estate is a wealth builder, the market will not flourish.
2. Banks have eliminated a big chunk of the potential buying market with their new (or shall we say old) requirements of a 20% down payment.
3. Low appraisals (referencing distress sales) are coming in below purchase prices and thus killing deals.
4. High-end speculators, who pushed the 1990-2005 real estate craze -- have also disappeared from the buyer pool, further exacerbating the home supply problem.
Another problem:
“We overbuilt and underfunded for a long, long period. In 2005, 26% of all sales were second home sales,” Lane says. “An absurd number! When we were kids, you could count on about two hands all of the people in town who had two homes; 26% was a preposterous level. My guess is that maybe 7-10% of all people are economically fit to own more than one home. So, now we have to wait until all that overbuilt supply is sold/foreclosed on or torn down and markets adjust, price-wise, before what’s left of the demand side of the market gets anywhere near back in line with the supply.
“This means construction isn’t about to come back any time soon, absent some wildly innovative government program that doesn’t appear to be on the horizon. We’re building less housing units in America, today (300,000) than at any time since 1960. And there are 135 million more people now than there were then.”
Real estate certainly isn’t dead in the water in Northern Michigan, however. The five-county area including Grand Traverse, Leelanau, Benzie, Antrim and Kalkaska accounted for 2,045 homes sold last year, with more than half of them (1,087) sold in Grand Traverse County.
If you’ve watched the real estate listings over the past year, you can’t help but notice there are a lot of bargains on the market Up North and in Michigan in general (in Detroit, HUD homes are going for as little as $1,200).
My wife and I enjoy watching the HGTV home & garden channel at night, with shows such as “House Hunters” and “Property Virgins” depicting the search for housing all over the world -- Cairo, Copenhagen, Toronto, northern France, the Seychelle Islands -- you name it. We can‘t believe the insane prices for homes elsewhere, even for properties that look like dumps. Often, you see couples on these shows shelling out $500,000 or so for homes that would go for one-quarter of that here in Northern Michigan -- still a home-buyer’s paradise.

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