In case you missed it, there’s been encouraging southwest Michigan employment news in the Kalamazoo Gazette lately. It even showed up on page one!
The first news article reported a speech delivered to the Kalamazoo Rotary Club by George Erickcek, economist at the W.E. Upjohn Institute for Employment Research. According to Mr. Erickcek, the Kalamazoo area is headed in the right direction: job growth is bucking national and state trends with 600 jobs gained in 2007; we rank third in the state (behind Ann Arbor and Lansing) in the percentage of residents aged 25 to 34 who are college graduates; Western Michigan University, Kalamazoo college and the Kalamazoo Promise all contribute to our potential for creating a “knowledge-based economy”, a key element to economic growth.
This assessment was followed two weeks later by twin employment announcements, one by long-time local employer Fabri-Kal and one by new player Kaiser Aluminum. Fabri-Kal stated it will add 160 to 200 new jobs to its current local work force of 115. It will move into a facility previously occupied by Mead Paper which has been vacant since 2001. Kaiser announced it will create 300 new jobs in aluminum extrusion, using 435,000 s.f. at the Mid-Link Business Park.
Next came an announcement by AT&T that it will expand its customer service center in downtown Kalamazoo and add 110 workers. Then one by K&M Machine-Fabricating Inc. in Cassopolis that it hopes to fill 120 positions in the next 18-24 months. K&M will manufacture housings for wind turbines as demand for wind generated electricity continues to grow.
What’s more, new jobs have a “ripple effect.” Mr Erickcek states that each manufacturing job usually creates one additional local job. All of this supports the argument that the Kalamazoo area will manage well and prosper into the future. As the economic contribution of Upjohn-Pharmacia-Pfizer continues to diminish from its historic levels, diversification in employment is very welcome news indeed!
www.jaredarnold.com
Thursday, March 13, 2008
Saturday, March 1, 2008
IGNORE THE HEADLINES!
REAL ESTATE NEWS: IGNORE THE HEADLINES!
The news is full of ominous statements about the world of residential real estate: FORECLOSURES DOUBLE! HOME SALES AT WORST LEVELS IN LAST TEN YEARS! NEW REQUIREMENTS CLAMP DOWN ON MORTGAGE MARKET!
You see and hear them every day. Over and over again. Why? Because negative headlines sell. They grab your attention. If the news media has learned nothing else, it is that bad news sells better than good news. Disaster is more interesting than harmony. Consequentially, headlines that make it sound as if the world is coming to an end.
My advice: Ignore the headlines. Headlines almost always ignore context and rarely hint at local differences. If you are interested in the topic, read the whole article, listen to the entire program, do comparative research . . . but DO NOT ASSUME THAT A HEADLINE ACCURATELY DESCRIBES THE TRUTH! It might from time to time, but it is a better bet that it does not. Particularly, as it applies to you and your market.
EXAMPLE: Buried inside an internet article I read yesterday with the headline “HOME SALES, PRICES DECLINE” (from the Wall Street Journal) was the tidbit in the last paragraph that residential sales in the mid-west in January were 3.4% higher. If you failed to read every paragraph and every sentence, you missed it.
EXAMPLE: The headline “WORST SALES FIGURES IN TEN YEARS!” has shown up many times in recent months. And for our area, this is accurate. What is also true, however, is that the last ten years have produced record sales levels. Residential sales for 2007 clobbered those of the early 80’s—including 85% more homes sold than in 1982! Further, more homes sold in the Greater Kalamazoo area in 2007 than in any year prior to 1997!
In short: all real estate is local, take the headlines with a large grain of salt and, in the words of Paul Harvey, get “the rest of the story.” Not all headlines apply to Michigan. Not all Michigan news refers to our area. Not all local information matters in your neighborhood. For an in-depth picture of the local market and, more particularly, your corner of it, give us a call. 269-488-0236
www.jaredarnold.com
The news is full of ominous statements about the world of residential real estate: FORECLOSURES DOUBLE! HOME SALES AT WORST LEVELS IN LAST TEN YEARS! NEW REQUIREMENTS CLAMP DOWN ON MORTGAGE MARKET!
You see and hear them every day. Over and over again. Why? Because negative headlines sell. They grab your attention. If the news media has learned nothing else, it is that bad news sells better than good news. Disaster is more interesting than harmony. Consequentially, headlines that make it sound as if the world is coming to an end.
My advice: Ignore the headlines. Headlines almost always ignore context and rarely hint at local differences. If you are interested in the topic, read the whole article, listen to the entire program, do comparative research . . . but DO NOT ASSUME THAT A HEADLINE ACCURATELY DESCRIBES THE TRUTH! It might from time to time, but it is a better bet that it does not. Particularly, as it applies to you and your market.
EXAMPLE: Buried inside an internet article I read yesterday with the headline “HOME SALES, PRICES DECLINE” (from the Wall Street Journal) was the tidbit in the last paragraph that residential sales in the mid-west in January were 3.4% higher. If you failed to read every paragraph and every sentence, you missed it.
EXAMPLE: The headline “WORST SALES FIGURES IN TEN YEARS!” has shown up many times in recent months. And for our area, this is accurate. What is also true, however, is that the last ten years have produced record sales levels. Residential sales for 2007 clobbered those of the early 80’s—including 85% more homes sold than in 1982! Further, more homes sold in the Greater Kalamazoo area in 2007 than in any year prior to 1997!
In short: all real estate is local, take the headlines with a large grain of salt and, in the words of Paul Harvey, get “the rest of the story.” Not all headlines apply to Michigan. Not all Michigan news refers to our area. Not all local information matters in your neighborhood. For an in-depth picture of the local market and, more particularly, your corner of it, give us a call. 269-488-0236
www.jaredarnold.com
Monday, February 11, 2008
TIMING THE MARKET FOR A REAL ESTATE MOVE
Just as in the stock market, one is tempted to try to make a real estate move at “just the right time”. That would mean selling high, buying low, getting the lowest interest rate on the mortgage loan you need and, of course, having all this happen when the time is right for you!
Of all these variables, the loan is the easy part. Since about 1984, mortgage loan financing has been pretty reasonable—that’s when the rates dropped under 10% for good. If that doesn’t sound very appealing, consider that, at the time, it felt fantastic after 3 years of mortgage rates that ranged from 12 to 18%! In 1982, the majority of homes in the Greater Kalamazoo market sold on land contract (with the seller acting as the bank) at 11% interest—the highest rate allowed by Michigan law—and every buyer felt lucky to get that affordable a rate!
You can now get a 30 year fixed rate under 6%, with 15 year rates approaching 5%. This is affordable by any measure of the past 25 years. And don’t fret over the media headlines from the past couple months. Money is available. The only thing that has really changed in the home financing arena recently is that banks are again acting as prudent banks should: checking credit, verifying income and deposits.
The challenging part is selling high and buying low. While there are things you can do to nudge things in that direction (more on this later), logic tells you that if it is a seller’s market when you are selling, it will be a seller’s market when you turn around to purchase as well. In a way, that is good news. Especially when you are making a local move, it can be a relief to know that after selling your home at what feels to be a rock bottom price, you will be able to go out and find a bargain yourself. Conversely, when you sell at a premium price, chances are that you will pay a premium on the other end. When you stop and think about it, the difference between the old home and the new one is less in a buyer’s market. That makes NOW a very good time, financially, to make a move. It may take more time to sell, but there will be lots of choices and great prices when it is time to buy.
All of this hinges, of course, on the timing that works best for you. If you’re really not ready to make the move (it is a lot of work!), then none of this matters. If you ARE ready, we encourage you to get on the market in late winter before inventories swell (June—August) in order to face less competition and still have a good number of buyers. For tips on how to compete well in today’s very crowded market, read our previous blog entries (October 17 & December 3) or give us a call.
www.jaredarnold.com
Of all these variables, the loan is the easy part. Since about 1984, mortgage loan financing has been pretty reasonable—that’s when the rates dropped under 10% for good. If that doesn’t sound very appealing, consider that, at the time, it felt fantastic after 3 years of mortgage rates that ranged from 12 to 18%! In 1982, the majority of homes in the Greater Kalamazoo market sold on land contract (with the seller acting as the bank) at 11% interest—the highest rate allowed by Michigan law—and every buyer felt lucky to get that affordable a rate!
You can now get a 30 year fixed rate under 6%, with 15 year rates approaching 5%. This is affordable by any measure of the past 25 years. And don’t fret over the media headlines from the past couple months. Money is available. The only thing that has really changed in the home financing arena recently is that banks are again acting as prudent banks should: checking credit, verifying income and deposits.
The challenging part is selling high and buying low. While there are things you can do to nudge things in that direction (more on this later), logic tells you that if it is a seller’s market when you are selling, it will be a seller’s market when you turn around to purchase as well. In a way, that is good news. Especially when you are making a local move, it can be a relief to know that after selling your home at what feels to be a rock bottom price, you will be able to go out and find a bargain yourself. Conversely, when you sell at a premium price, chances are that you will pay a premium on the other end. When you stop and think about it, the difference between the old home and the new one is less in a buyer’s market. That makes NOW a very good time, financially, to make a move. It may take more time to sell, but there will be lots of choices and great prices when it is time to buy.
All of this hinges, of course, on the timing that works best for you. If you’re really not ready to make the move (it is a lot of work!), then none of this matters. If you ARE ready, we encourage you to get on the market in late winter before inventories swell (June—August) in order to face less competition and still have a good number of buyers. For tips on how to compete well in today’s very crowded market, read our previous blog entries (October 17 & December 3) or give us a call.
www.jaredarnold.com
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