Election Day Today--Don't Forget to Vote!

Many communities in Metro Detroit are having elections today. Whether it is for local elected officials, school board members, or millages, they are all important decisions.

Don't be that person who does not vote, but then complains about things government does or does not do. Simply put, if you don't vote, you don't count.

New Forms Make Closings Clearer

As of last Saturday, there are new closing forms when you go to buy a house. The new forms are an improvement, but there is one pitfall that can now come up. Detroit News columnist Brian O'Connor has an excellent discussion of this.

The old Good Faith Estimate, which was frequently not all that accurate an estimate in my experiences, will be replaced by a clearer form called a Loan Estimate. The new form includes a computation of how much you will be paying in all of the different costs, fees, and payments during the first five years of the loan, along with computing how much of that will actually pay down the amount owed on the house during that time.

Another form, the Closing Disclosure, replaces the HUD-1. It has been tested with focus groups to be much easier to understand.

I am one of the few people

Update: Van Elslander Mansion Sells

Did I ever get around to mentioning this? Art Van Elselander's spectacular Michigan mansion, which had been on the market for some time, finally sold. At an auction. At a bargain price.

Originally priced at over $15.9 million, easily the most expensive listing in Michigan at the time, it ended up selling for a relatively bargain price of $3.75 million, which is like going to an Art Van store for a new sofa and finding one for $100 in the Clearance Center in the back.

That price is amazingly low. Mr. and Mrs. James Anderson got themselves quite a deal. Hey, if I'd have known it would go for that cheap, I would have put in a bid in the auction. Then again, I would have needed to come up with the money to buy it, so maybe not.


Link:
http://www.detroitnews.com/story/news/local/wayne-county/2014/12/19/art-van-elslander-mansion-sold/20672827/

Psst...Want to Buy A Lighthouse? The Feds Got Three For Sale!

Here is one of the lighthouses up for sale. 

That's right. Your friendly Federal government is selling not one, not two, but three different Michigan lighthouses. Sadly enough, only non-profit institutions that promise to keep the place maintained and historical are eligible. Still, you might want to think about getting a nonprofit ready for the next round.

Link: http://www.detroitnews.com/story/news/local/michigan/2015/07/14/great-lakes-lighthouses-sale-online-auction/30122673/

Knappmann Law Firm Represents Landlords

Blatant Self-Interest Plug By Blogger:

The Law Offices of John O. Knappmann represents landlords in residential evictions, along with practicing in the area of commercial lease disputes. We are experienced landlords ourselves.

You can see our web page here.

Our offices are located in Trenton, Michigan at 2836 W. Jefferson, across the street from Del's Pizza. You can call us at 734/931-0440.

Link: www.landlordrealestateattorney.com

House Auction Perspective: Repeating One of Our Favorite Posts

Tax Auctions are a thing in Metro Detroit. Before you jump in and get your $500 fixer-upper in Detroit, read our previous post on the topic, which is still just as relevant.

Link: http://downriverhomes.blogspot.com/2014/01/a-500-auction-buyers-story.html

AARP: Most Livable at 50+

It would be cool to live in this neighborhood.

AARP has published a list of the most livable neighborhoods in the U.S. for those of us 50+ years old. Of course, no place in Michigan made their list (see below for why places like Ann Arbor, Wyandotte, and Trenton never had a chance). The rating method AARP used included walkability, opportunities for work and volunteering, and other factors. The results skewed to pricey downtown neighborhoods like the Upper West Side in New York and South of Market in San Fransisco.

One factor AARP did not take into account: cost. Why they didn't I can't really explain. So maybe the list should be called "Most Livable Neighborhoods for 50+ When Money Is No Object." Even stranger is why AARP would then consider access to jobs as part of the equation, which seems to be not as important if you can afford a king's ransom to live there in the first place. Does it really matter if you can be hired as a part-time computer programmer in your semi-retirement if houses cost $900,000? Curious.


Link: http://www.aarp.org/home-family/your-home/best-places-to-live.html?cmp=MSTLVBL015_APR15_015.

Property Values on Upswing

No surprise to people who live Downriver, but we have confirmation that property values are going up just about everywhere in our little neck of the woods. Only River Rouge, Ecorse, and Lincoln Park are not invited to the party. You can see the News-Herald reporting on it here.

The article points out that rising property values do not proportionately increase property taxes, which is good for homeowners but bad for local government. This flaw in Michigan's local government finance system has been discussed in depth in this blog before, and it needs to be addressed before every city Downriver is under a state controller. While I don't want to pay taxes either, cities and townships will continue to have budget problems even with rising values.

Link: http://www.thenewsherald.com/articles/2015/03/29/news/doc55159d97e4f17107086668.txt?viewmode=fullstory

Hottest Real Estate Markets, Overpriced in California

Fortune magazine has a list of 13 of the hottest real estate markets.  In this instance, "hottest" includes overvalued.  Most of the list are places in California (are you reading this, Neil Kramer?), but the number one market where prices have outpaced reality is in Texas.

Michigan did not have any places on this list, which is not really a shock.  Truth be told, this is a list of overbought areas where values are likely to drop or at least stagnate.  It is not the kind of list you really want to be on.  One of the things I like about this area is its affordability.

So let's be glad this is one list of top places that Michigan is not on.

Link:
http://fortune.com/2014/10/23/hottest-real-estate-us/?utm_content=buffer3eb88&utm_medium=social&utm_source=plus.google.com&utm_campaign=buffer

Strathmoor Leads Group Who Bundled

Developer Herb Strathmoor has taken credit as being the focal point of the consortium who bid on the huge bundle of Detroit properties and has now won them.  Keep in mind that these properties were bundled together with the idea that they would not sell and then the Detroit Land Bank could try to make something of them.

I will have my own take on their plans later this week, but for now it is important to know that mr. Strathmoor already has tax leins on properties in Detroit.  Oopsie.

Link:
http://www.detroitnews.com/story/news/local/wayne-county/2014/10/29/developer-won-detroit-property-auction-outstanding-liens/18117195/

Art Van Elslander Mansion Sells at Auction

The wonderful mansion of Art Van founder Art Van Elslander, after a year on the real estate market for $15.9 million, was sold at auction yesterday.  We have a link to the Detroit News story on this, but it was covered in other places as well.  It was for sale for a year before being put on the auction block.

Not just any ordinary auction.  In order to bid, you needed to deposit $200,000 in cash or certified funds.  How much the place went for and who bought it is still undisclosed.

We have previously covered the sale of the place, here and here.  It is absolutely stunning and might be the best residence in Michigan.

I'm just hoping the undisclosed bidder is not my wife.  Like many, she would love the place.  But we can't afford the yearly upkeep on a place like this.

Link:
http://www.detroitnews.com/story/business/real-estate/2014/10/29/van-elslander-mansion-sells-reserve-auction/18098043/

Previous:
http://downriverhomes.blogspot.com/2013/10/you-can-buy-art-van-founders-mansion.html

http://downriverhomes.blogspot.com/2014/10/art-vans-spectacular-estate-on-auction.html

Top Professions of Renters

So, when it comes to homes, who rents and who buys?  The answers might surprise you.

You probably think that people who own make more money.  And that is partially true.  But what about lawyers renting more than firemen?  And why are ballerinas renting so much?

Fortunately for us, the Wall Street Journal is on the case.

Part of the reason may lie in the fact that a lot of fireman have second jobs in some type of home improvement business.  Being handy, it is easier to own a home that you can DIY yourself.  At least that is my theory.

What do you think?  Any other results surprise you?  Feel free to leave your comments below.

Link:
http://blogs.wsj.com/economics/2014/10/15/optometrists-to-dancers-which-americans-are-most-likely-to-own-homes/

Apps for Real Estate Investors

Memphis Real Estate Investing has a great post talking about apps investors should be using for their smart phone.  I plan to check out a few of these that I did not know about.

I especially am interested in the app for CRT.  By the way, there are good suggestions for both Apple and Android phones.






Link:
http://blog.memphisinvest.com/inventions-and-apps-for-real-estate-investors?utm_source=hs_email&utm_medium=email&utm_content=14281274&_hsenc=p2ANqtz-_93j5oCk8NkPge49mLwXB64NzNQO6XOK0rm2BSDmhKFxWZMv2jjDLlJlbIhk_iUi0mo9Vk4vccOHhU7s5kUxhFhkFyiA&_hsmi=14281274

My Thoughts on the Detroit Bankruptcy

I posted these thoughts on Bigger Pockets in response to this thread, but thought it might be interesting to see what blog readers think.  The discussion basically centered on why Detroit went bankrupt and what the future held.  Feel free to comment below.

1) A portion of Detroit's deficit can be attributed to changes in the state's municipal funding system, changes which victimized urban and fully developed areas and rewarded small towns and open areas.  When the state ran into their own financial issues, they chose to cut local revenue sharing (meant to replace other money lost in another tax change).  That change alone meant $200 million less for Detroit.

2) The real estate collapse hit Detroit worse than just about anywhere else.  Tax revenues plummeted.  Then, thanks to certain unique aspects of Michigan law, residential taxes did not bounce back when prices bounced back up.  It will be 2028 before taxable valuations are at 2008 levels.

UPDATED: 6000+ Homes Bundle in Tax Auction Has a Bidder

Wayne County bundled 6,350 properties together in their most recent round of tax auctions.  Instead of the usual starting price of $500, these were grouped together.  Probably about 2,000 of those are vacant lots, and another 3,000 or so are beyond help and will need to be demolished.

The $3,183,500 bid relieves the Detroit Land Bank of the estimated $24 million cost to demolish those homes, so Detroit officials have got to be happy about that.  Rumors are that others may yet bid and drive the price up. 

So the buyers get 1300 decent houses, 3000 that need torn down, and 2000 vacant lots. $24 million to demolish the bad ones should be figured into the bid. The vacant lots are not worth anything, really. $27 mil to 1300 decent houses works out to about 21000/house, unless they figure they can do the demolitions cheaper. Sounds like a win-win to me.

The auction ends in seven days.

Link:
http://www.detroitnews.com/story/news/local/wayne-county/2014/10/21/m-bid-placed-bundle-foreclosed-properties-detroit/17659389/

Metro Detroit Home Prices Soar, Especially in Hot Spots

This nice couple from South Lyon are in the middle of a real estate
market upswing more dramatic than we are seeing Downriver.

It's no secret that Metro Detroit real estate prices are going up, and have been for a while.  After the big crash in the second half of the last decade, up is about all they could go.

What is not so apparent, but should be known, is that not all areas are going up uniformly.  Some areas lead the pack and some areas lag.  In our area, we have no leaders, at least according to the article.  We do have a laggard, Romulus.

Statistics don't lie.  I am not shocked that the Grosse Pointes are once again in vogue.  What I don't understand is why more people do not realize the great neighborhoods and cities Downriver and give them a little love.  Our area gets an unfair rap, in my humble opinion.

Oh well, read the story in the Free Press anyways.

Link:
http://www.freep.com/story/money/real-estate/home-sales/2014/10/12/real-estate-hot-spots-michigan-housing/17107651/

A Dramatically Transformed Detroit is Coming

John Gallagher suggests in the Freep that Detroit in ten years could look very different, and for the better.  Yes, we've heard it before, like for the last 50 years or so.  But now we can point to specific changes that have already happened.  So I agree with him.

Remember this look, because it will be changing soon.

How about the new Red Wings arena/entertainment district?  The growth of neighborhoods surrounding downtown?  M-1 Rail?  The re-birth of Capitol Park from ashes?

Detroit in ten years will have an active, walkable downtown core.  Maybe Dan Gilbert will have sold some of his 60 buildings by then.  Or maybe he will own 100.  More about that later this week.

Neighborhoods will benefit from improved services, although this will not happen overnight.

By the way, what do you think about the idea of filling in I-375 and turning it into a surface street?  Feel free to post comments below.

Link: http://www.freep.com/story/news/local/michigan/detroit/2014/09/28/downtown-m-rail-arena-bridge/16343825/

Suspicious Package Closes 33rd District Court

33rd District Court in Woodhaven has been closed due to a suspicious package.  Although these types of incidents usually prove harmless, you would probably be well advised to avoid the area altogether until it is cleared up.

New Emergency Manager Doesn't Understand Municipal Finance

I hate to say someone making $150,000/year in taxpayer money does not understand a key part of his job, especially when Lincoln Park residents are affected by his decisions, but it's true here.

New Emergency Manager Alan Coulter gave an interview to the News Herald on his second day on the job.   Among his observations was that he did not know how much more cost-cutting could be done, but that he thought a key was to bring crime under control and grow property values.  He reasons that the increased property values will raise the tax base and catch up to costs as time goes on.

The problem with that reasoning is the peculiar (in Michigan) cross-effects of Proposal A and the Headlee Amendment, both products of the 1990s.  Regular readers of this blog will remember this discussion from previous posts.  The point is, property tax revenues can go up by inflation or five per cent, whichever is less.  And, as property values go up, the overall tax rate goes down a fraction.  So, while property values can go up and up, tax revenues from them in Lincoln Park (and everywhere else in Michigan) are going to creep slightly higher falling further and further behind inflation each year.  This is only counteracted if you have a lot of undeveloped land, which Lincoln Park does not.

But Coulter does not understand this.  Or at least he did not on his second day on the job.  You can't blame the guy, but it is an issue that other qualified people who were not appointed would know.  Betcha this was not in his EM orientation packet from the Governor's office.  He's probably a smart guy and will learn it soon, though.  Then it will be on to Plan B.

On the other hand, Coulter should be commended for saying he was going to work with the elected mayor and council rather than just make all of the decisions himself (which he is allowed to do under the law).  Even if the advisory-committee training wheels (like in Ecorse today) are put on Lincoln Park when he leaves in 18 months or so, these are the people who will eventually have to assume responsibility for keeping the city out of further trouble down the road.

BTW, he is an appointee of the state who are paying his salary.


Link:
http://thenewsherald.com/articles/2014/07/09/news/doc53bc393e7b28e334710141.txt?viewmode=fullstory

http://downriverhomes.blogspot.com/2014/01/a-broken-system-of-funding-local.html

Update: Coulter is Lincoln Park Emergency Manager

Brad Coulter

Brad Coulter has been named by Governor Rick Snyder as the Emergency Manager in Lincoln Park.  He comes from a background in the private sector and is known as a corporate turnaround expert.

We posted earlier this week that this move was rumored to be imminent.  As it turned out, the announcement came out later that same day.

We must confess some curiosity as to why Lincoln Park's City Council took the unusual step of asking for an Emergency Manager from the state when they probably could have operated under a consent decree and retained local control.  Instead, the local elected leaders voted to just abdicate their authority and give up.  For most of them, they were there and voting when the deficit budgets were approved in prior years, and now they will not be making the tough choices to fix the fiscal carnage.

We don't approve of that sort of action, and hope they will not continue to draw a paycheck for what is now a symbolic role in their local community that they served so poorly.

In any case, good luck to Mr. Coulter and the citizens of Lincoln Park.

Link:
http://www.thenewsherald.com/articles/2014/07/05/news/doc53b57476cc69c446412338.txt?viewmode=fullstory

Previous post: http://downriverhomes.blogspot.com/2014/07/breaking-lincoln-park-gets-emergency.html