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Rehabbed & Ready Program Restores and Refurbishes Detroit Properties

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Detroit Land Bank Authority’s Rehabbed & Ready program has refurbished residential properties across Detroit neighborhoods. They typically gut the homes, put thousands of dollars worth of work into them (including new electrical, plumbing, windows and landscaping) and sell them to new buyers. The Land Bank took a loss on some of the homes that had fire damage or asbestos issues, but the home sales lifted the neighborhoods’ home prices. The Land Bank’s goal is to restore existing value into homes. The program has sold nearly 100 homes since 2015 and is expanding over the next three years to restore an additional 200 houses. The goal will continue to be adding residences and raising property values.

 

 

Ann Arbor Rezones Briarwood Mall Area

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The Ann Arbor City Council recently voted to permit reclassifying over 200 acres around Briarwood Mall under the city’s new TC1 transit-corridor zoning category. The rezoning of 68 properties in the State Street and Eisenhower Parkway commercial area makes way for downtown-style development on the city’s south side. According to the mayor, the council’s steps will create a substantial amount of housing units in the city.  The goal is to encourage high-density, mixed-use development. Building height limits range from 550-300 feet and depend on how close sites are to residential areas.

Rocket Promises a “Fast 15 Guarantee”

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Rocket Pro TPO launched a program that guarantees financing to close in 15 days. The move is meant to convince brokers to choose them over the rival United Wholesale Mortgage. Called the “Fast 15 Guarantee,” Rocket Pro TPO plans to run the promotion until the end of the month and promises to award a $2,500 lender credit to borrowers whose loan does not close on its promised due date. Government, FHA and VA loads do not apply, and the program isn’t available in 16 states, including New York, Massachusetts and Rhode Island.

U.S. Pending Home Sales Decline

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Limited home inventory is restricting the real estate market, causing U.S. pending home sales to fall 4.1 percent in February for a fourth straight month. With a limited number of properties for sale, home price tags remain elevated. When combined with 30-year fixed mortgage rates at a three-year high, homes are less affordable. The increase in home prices and rising mortgage rates can add up to another $200 to $300 in mortgage payments per month.  According to the NAR,  these factors have pushed up mortgage payments by 28 percent from February of last year.

 

Skilled Labor Shortage Complicates Construction Projects

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Prior to the COVID-19 pandemic, there was not enough skilled labor to meet construction demands. That’s even more true now that development has almost returned to pre-pandemic levels in metro Detroit.  According to metro Detroit’s largest general contractors, that means less skill on job sites.  That, along with continuing supply chain and inflation issues, is causing project managers to scramble to meet demands. The number of Michigan construction workers has rebounded to pre-pandemic levels, but it’s still down almost 20% from 20 years ago. The number is not growing fast enough to meet the increasing demand. It’s anticipated that skill trades will account for 47,000 annual job openings through 2026.

 

 

 

Mortgage Companies Expecting Leaner Year in 2022

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The year 2022 promises to be a leaner year from mortgage companies. The mortgage industry rebounded in 2020 and 2021, propelled by rock-bottom interest rates and consumer demand. In 2022, things are changing. Mortgage rates increased to a level not seen since December 2018. The average 30-year-loan increased from 4.42 percent last week to 4.67 percent on Thursday. Rates have increased more than a percentage point and a half since the new year.  Fewer consumers in the refinance pool and the limited housing inventory are contributing to the rate increase.

Utility Companies Seek Land For Solar Farms

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Michigan utility companies are securing real estate to expand their solar energy generation capabilities as consumer demand accelerates. DTE Energy Co. needs 20,000 to 35,000 acres of southern-facing flat land to erect solar arrays over the next 10-15 years. Consumers Energy Co. currently generates 40 megawatts of electricity from solar and plans to be at 8,000 megawatts by 2040. That will require between 40,000-56,000 acres of land. Customer demand and land usage is a balancing act that Lansing policymakers haven’t yet addressed. Industry leaders anticipate some community resistance.

 

 

Spring Homebuying Season Accelerates

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The metro Detroit housing market is off and running in the spring homebuying season. Redfin is reporting that almost 3/4 of homes on the market in metro Detroit are receiving multiple offers. Buyers are offering well above list price, free occupancy for sellers who are waiting for their next home purchase, and appraisal guarantees. Some are even paying closing costs. First-time home buyers and those financed with government-backed loans are at a disadvantage.

 

The Detroit Land Bank Authority Expects to Sell Remaining Properties by 2023

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The Detroit Land Bank Authority expects to sell most of its structures by the end of 2023.  The DLBA is responsible for selling vacant homes and lots in the city.  Their focus moving forward will adapt to vacant land sales with the mission to return blighted and vacant properties to productive use.  The Land Bank officials asked the city for $11 million from the general fund for the 2023 fiscal year in order to maintain operations and properties that could be put up for sale.  The DLBA expects to list 5,400 salvageable properties by the end of next year, but needs the money to maintain the properties.

 

Ann Arbor City Council Approves Rezoning Efforts

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In an 8-3 vote, the Ann Arbor City Council has given initial approval for the rezoning of over 200 acres around Briarwood Mall. The city-initiated rezoning will need final council approval next month. Its intent is to encourage high-density, mixed-use development with limited building heights determined by the proximity of residential areas. City officials are hopeful that it will lead to a mix of housing and commercial spaces.  The three council members who voted against the proposal view the rezoning as a giveaway to developers and landowners.