Last We asked you to toss some questions to Ryan Cooley of O'Connor Real Estate, our open threads guru. We pared the list down to the five best and most widely applicable questions. Here now, Mr. Cooley's thoughts on topics ranging from the Live in Midtown incentive to difficult Detroit realtors. Look for a new professional/expert in realty this coming Friday inform and enlighten.
1. Often homes are already pending by the time they hit Zillow or Trulia. This makes it frustrating and difficult to shop the neighborhoods. I also hear that banks are unwilling to finance 80% of the ask price since they devalue the homes. A $100K house may only be valued by the bank at $40K, making it impossible to get a mortgage. I don't see how one can even buy a house in Detroit unless you have a lot of cash.
Zillow and Trulia aren't direct feeds from the MLS (the service that realtors list houses through). Because of this there can be a lag between when the property is on the market and when it is listed on these websites. Any realtor can help you search more efficiently than you can on Zillow OR Trulia. For example, you can sign up through my office to get email updates in the neighborhoods you're interested in that will make you aware as soon as a house in that neighborhood hits the market.
Appraisals can be very difficult in Detroit because things vary from block to block. If it were up to me, appraisers would compare historic neighborhoods to historic neighborhoods but most times it's based on a mile-radius formula. I'll often tell my clients to suspend their excitement until we receive the appraisal back. The demand is certainly way ahead of appraisal values in a number of neighborhoods in Detroit.
Ideally, I'd love to see a third-party organization developed to give loans to qualified buyers to meet the difference when it makes sense. And it makes sense quite often. I've seen so many houses slip through the cracks, and buyers forced to look outside the city, because city appraisals aren't coming in high enough. And most often, these appraisals are being done by people who live outside the city of Detroit and have no idea what kind of interest, demand and growth that is happening in some of these neighborhoods. It's the single most frustrating part of my job, the single easiest thing to fix, and probably the biggest cause of neighborhoods not coming back as quickly and strongly as they could be.
2. What kind of impact have the Live Midtown/Downtown programs had on the housing market in those areas? How has it affected the buyer/seller/agent? How long will they last and are they potential models for other parts of the city?
The Live Midtown and Downtown program have a had great impact on the market. At this point the biggest problem is the lack of housing within these boundaries. Hopefully they will be expanded in the near future, so prospective buyers can have more choices. My understanding is that these programs will be renewed. I'm hoping more companies will participate too. Besides being a great incentive it's been a great promotional tool as well.
3. What do you think we will see of Brush Park in the next 5 years? Will the announcement of the M1 Rail and Whole Foods spur any additional development?
This neighborhood is going to develop quickly, and yes, it's my guess you'll see new housing here within the next five years. There are so many factors coming together in this area that you will definitely see housing built here in the next five years. The number of jobs locating downtown is really driving the housing demand. And "traditional" urban amenities like Whole Foods and M1 will help make this neighborhood comparable to other major city neighborhoods. At least people won't have to ask the perpetual "Where do you buy groceries?" question anymore. The deeper answer is that there are already plenty of places to buy groceries in the city, but a lot of people want the conventional/mainstream corporate experience – or maybe they think they can't be serviced entirely by Eastern Market or small neighborhood grocers like HoneyBee. There's no doubt Whole Foods address those concerns, and that's not a bad thing. I'm excited about it. Now we'll have both experiences.
4. Do you see development on Michigan Ave continuing west of I-75? Is there much demand for the real estate over there? There seems to be many more complete buildings/blocks over on that side...
I think it will be a few years before there's significant development on Michigan Ave west of 75 although I'd love to be wrong about that. There's still significant commercial infill that needs to occur between downtown and 75 so until that occurs I think it will be awhile. I am encouraged by the new development that is occurring west of Roosevelt Park (Two James Distillary and Pot & Box) and I hope to see more of that occur.
5. I've seen listings in Detroit and have contacted the listing agent and they NEVER call me back. Different listing agents, different properties. I've mentioned in my message that I'm a cash buyer, so I figure they ought to be drooling to get back to me. I do have a realtor, and he told me that he suspects that these are agents who are listing, not responding, and funneling the properties to their friends or family members. I don't want to name realtors, but it's been properties posted in Boston Edison, mostly.
As a realtor I deal with this a lot too and it's very frustrating. It's a by-product of the foreclosure market. The agents that represent the banks are instructed to sell these properties as quickly as possible. The bank doesn't care who buys the property as long as it closes quickly. Because of this there isn't much need for customer service. The bank doesn't conduct themselves with any sort of reason or compassion and it unfortunately carries through to the conduct of the listing realtor quite often. The sooner we return to a normal person-to-person sales market the better.