Studio Four8 explains why we think the current market that we face is not a housing crisis in Ann Arbor.
Ep 1 | Appreciation Rates in Ann Arbor
Transcription:
Hi there, it’s Dan Kurylo Studio Four8 at Berkshire Hathaway HomeServices Snyder & Company realtors, Now I’d like to talk to you about one of the reasons that what were facing right now is not necessarily a housing crisis.
Housing Crisis of 2008
Now if we look at the 2008 housing crisis, that was an issue of affordability. People had become priced out of their homes and appreciation before the 2008 crisis was very high. The 6 years preceding the average appreciation was anywhere between 6.5% and 12.4%. Whereas if we look at this 6 years preceding where we are now in 2020, well, the highest rate of appreciation for 6.4% and the lowest was 4.4%. So much more modest appreciation, meaning people are able to afford their homes. Housing hasn’t become priced out for people and what we’re looking at is not necessarily a housing crisis. Once again I am Dan Kurylo for Studio Four8 at Berkshire Hathaway HomeServices Snyder & Company realtors and be sure to check out some of our other videos.
Ep 2 | Harder to Get a Mortgage in Ann Arbor
Transcription:
Hi I’m Sara Maddock with Berkshire Hathaway HomeServices Snyder and Company Studio Four8. I wanted to tell you about one of the indicators that lets us know that the covid-19 impact on real estate is not the housing crisis that we saw back during the Great Recession.
Harder to Get a Mortgage
One of the biggest differences is in how easy or un-easy it is to get a loan these days. In fact, by some estimates, it’s 6 times harder to get a mortgage loan than it was back then. Frankly, we think this is a good thing. There was an old saying that at that time during the Great Recession and prior to the great recession leading up to it, all you had to do to get a mortgage was pass the mirror test. So in other words if you could fog a mirror held under your nose then you could qualify for a loan. Well banks realized that it is a good idea to only give large mortgages to people who can actually afford them. Right? Earth Shattering. So nowadays we haven’t seen the no-doc loans, the hundred percent loans that we were seeing back then and that’s a good thing. Because again that means that today’s home owners are far less likely to default on their loans if there’s a little bit of a dip in the market.
Ep 3 | Low Inventory Levels in Ann Arbor
Transcription:
Hi this is Jeffrey Post with Studio Four8 Partners, part of Berkshire Hathaway HomeServices Snyder & Company realtors. I want to talk to you today a little bit about home Inventory. I want to talk to you in respect to the Covid pandemic that was coming out of and the housing crisis of 2008. Inventory is a deciding factor in whether it is a buyer’s market or seller’s market. A seller’s market, typically, is when inventory is less than six months worth. A buyer’s market tends to be when inventory is greater than that.
Lower Inventory
Statistically, if you go back and look at the levels of inventory that existed in 2008/2009 and in 2010 up somewhere close to 2 to 11 months of inventory. At the present time, right now, we’re closer to 2 and 1/2 months inventory. So it’s particularly strong if you are a seller looking to list your property. I might add as a little caveat to that, that interest rates are particularly low right now. So there is a good advantage for buyers as well to be out there looking. I’m Jeffrey Post, hope that’s helpful.
Ep 4 | Unused Equity in Ann Arbor
Transcription:
Hey Folks, Todd Waller here with Studio Four8 Berkshire Hathaway HomeServices Snyder & Company realtors in Ann Arbor, Michigan. Continuing our little series here on this is not a housing crisis in Ann Arbor that we are currently experiencing. If you’ve been following along we’ve been comparing our current state of the real estate market to what happened prior to and during the crunch back in 2008 and forward. So this little clip is about home equity that has been pulled out homes prior to the Crunch and prior to the pandemic here now.
Home Equity
Prior to the crunch in 2008 the years 2005 to 2007 saw 824 billion dollars pulled out of home’s equity. Again that is 824 billion, with a B, pulled out of home equity at that point in time. Here in 2020, let’s go back 3 years, 2017, 2018, 2019, only a total of 232 billion dollars have been pulled out of homes equity. That’s almost a swing of about 600 billion dollars worth of equity. So the point here is that we’re not as leveraged right now as a market as we were back in 2008. This is a good, good, sign. That means people are keeping their money in their pockets, in their saving accounts, and in their homes which is a great place to be. Again Todd Waller here with Studio Four8 Berkshire Hathaway HomeServices Snyder & Company realtors in Ann Arbor, Michigan, Thanks so much!