Weekly News Brief – May 31, 2021

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Now that the economy is slowly progressing back to normal, the issues facing real estate are also slowly getting back to normal.

This week we saw reports that one of the pre-pandemic greatest hits is returning back to the forefront. The Republican-controlled state legislature is moving forward on a bill that would ban local restrictions on short-term rentals. Prior to the COVID-19 pandemic, local governments fought short-term rentals with a ferocity that had not been seen since the first days of the legalization of marijuana.

However, the lack of travel during the COVID-19 pandemic brought these disputes to a halt. However, now that leisure travel is returning, these disputes are also returning. While I do not expect the current bill to pass in its current form, the tension between local governments, generally responsive to neighbors who oppose short-term rentals in residential zones, and the state legislature, who may be more responsive to the lobbying efforts of companies such as Airbnb and Vrbo.

 

Michigan Legislature May Nix Short-Term Rental Laws

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Bills in the Michigan legislature that have bipartisan support would nix local laws that ban or limit short-term rentals through zoning. The bills are controversial and have garnered heated debate. Proponents like Airbnb, realtors, and lawmakers from both parties say the proposed changes to state law are about personal property rights and do not prevent cities from regulating short-term rentals. Opponents, which include leaders from cities all over the state and hoteliers, say they do not support an outright ban on short-term rentals. They feel that local leaders should have the power to decide what rules are most effective for their communities.

U.P. Vacation Home Prices Boom

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In keeping with vacation locales in Michigan’s Lower Peninsula, the prices of vacation properties in the Upper Peninsula are on the rise. With limited inventory, many of the recent cottage buyers hail from out of state and intend to use their new U.P. properties during winter months as well as summers. Realtors are seeing multiple offers on every listed property. The median sale price was $197,000 from January 1 through mid-May. That’s nearly a 20% increase from the same period pre-pandemic in 2019.

 

Farmington Hills Council Denies Housing Development Proposal

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Farmington Hills Council denied a 26-home development because of concerns about the property’s density. The development was proposed for the former Piemontese Social Club site and would’ve been geared toward senior citizens wanting to downsize. Both council and neighboring community members expressed concerns about the closeness of the homes to each other. The ranch-style homes would have sat on 10 acres.

$30 Million HUD Grant Will Improve Corktown

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Detroit has been awarded a $30 million federal grant to add more mixed-income housing and improve neighborhood conditions in the Corktown area. The grants are designed to redevelop distressed housing, boost social services and improve public spaces. The grant will be used to replace the 87-unit Clement Kern Gardens Apartments with 841 units of mixed-income housing. The plan also includes more pedestrian-friendly streets, increased access to community amenities and training and employment opportunities.

 

Zombie Properties Becoming More Common

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In the first quarter of 2021, 1 in 14,825 homes sat empty during the foreclosure process, but that number is on the rise. In the second quarter, one of every 12,256 homes are zombie properties. The spike may be due to lenders foreclosing on homes that were already abandoned. However, even with the increase, zombie foreclosures are still just a blip on the radar screen. The trend has been seen before when government officials try to delay foreclosure proceedings for so long that distressed borrowers simply abandon the property before the foreclosure can take place.

Michigan Real Estate News Headlines – May 31, 2021

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National

The Curious World of NFT Real Estate and Design

Foreclosures

Zombie-Property Numbers Are Rising

Detroit

Michigan may nix local laws banning short-term rentals. Is this a boon or slippery slope?

4-story Brush Park town house in Detroit has 2 private spaces on roof

Detroit awarded $30 million HUD grant to improve Corktown housing, neighborhood

HGTV’s ‘Bargain Block’ makes a star of Detroit Realtor

United Artists Building project gets additional $2 million in state funding to close financing gap

Real Estate Insider: Affordable senior housing complex across from Belle Isle for sale

Corporate Detroit prepares to emerge from the basement

Bedrock plans roller rink, sports courts for Monroe Block site

Grand Rapids

Michigan may nix local laws banning short-term rentals. Is this a boon or slippery slope?

Southeast Michigan

Michigan may nix local laws banning short-term rentals. Is this a boon or slippery slope?

Farmington Hills council turns down senior-focus home development

Ashley Capital buys former GM land next to Amazon facility, plans new building

A tale of 2 malls: Partridge Creek is in trouble, Village of Rochester Hills isn’t. What’s the difference?

Western Michigan

 

Michigan may nix local laws banning short-term rentals. Is this a boon or slippery slope?

Northern Michigan

Michigan may nix local laws banning short-term rentals. Is this a boon or slippery slope?

U.P. vacation home prices are booming: Here’s why

Outstate

Michigan may nix local laws banning short-term rentals. Is this a boon or slippery slope?

Property owners near failed dams win key court ruling

Weekly Brief – May May 24, 2021

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As we begin to see signs that the COVID-19 pandemic is starting to wane, at least in the United States, the rubber is about to meet the road on two important issues facing real estate.

First, as the eviction and foreclosure moratoria start to be lifted, we will see whether the government’s efforts to avoid catastrophe in the residential sector were successful. There are early signs that residential evictions will be high. Whether the same will be true for foreclosures remains to be seen.

Second, commercial real estate is a mystery.  Vacancies in office buildings are already starting to slowly increase, as flexible work arrangements begin to become permanent. The hospitality industry is also seeing signs of tension. However, the commercial real estate sector appears to remain strong. More will likely be revealed as the long-term impacts of the COVID-19 pandemic become evident.

Real Estate Slow Down In Sight?

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Although nearly 50% of the homes sold for more than their list price in the last four weeks ending May 16, there are signs that housing market demand may be reaching its peak. In the 7-day stretch leading up to May 16, pending sales were down 10%  from four weeks prior. Home prices remain astronomically high, although mortgage rates spiked last week, jumping 6 basis points to 3%. There has also been a slow down in new listings.

Human Migratory Habits Change Post Pandemic

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Although offices are beginning to reopen as vaccinations climb, many employers are still allowing employees to work remotely from home indefinitely. Those who are able to continue working remotely at least part of the time are heading for greener pastures, literally. Real estate company Redfin reported this month that online searching for homes in suburbs and rural areas has increased since the first quarter of 2020 in most major U.S. metro areas. Before the pandemic, a bigger house might not have seemed worth the commute, but if that commute is cut down to 1-2 days a week, the story changes.