Experts discuss housing forecast at chamber event

By: Sherri Kolade | Birmingham - Bloomfield Eagle | Published April 3, 2017

BIRMINGHAM — Thirty percent of all millennials are renting, Detroit is on the move with an upcoming 50-block entertainment and sports district, and the housing market is on the upswing in Michigan.

Those were a few ideas presented at the Real Estate Forecast Breakfast, put on by the Birmingham Bloomfield Chamber of Commerce at The Reserve in Birmingham March 23.

Real estate powerhouses spoke on topics from millennial buying trends to how homeowners are living in their homes longer. And Gen Xers are in the prime of their lives when it comes to home buying.

Speaker Michael Stoskopf, CEO of the Home Builders Association of Southeastern Michigan, said during the packed event that last year was a banner year for Michigan.

Moderator Paul Magy, an attorney at the Birmingham-based Clark Hill PLC, said that “we live in a time of great change” when it comes to real estate. 

“We know that no subject ever captures our attention and conversation more, requires such a substantial portion of our budgets, occupies such a large portion of our net worth,” he said, adding that the subject of real estate “resonates in our bodies” as people think about their futures, their children and their grandchildren.

“Where will they live? Will they be able to afford to live?” Magy said. “No subject seems to be a better bellwether as it relates to jobs and the economy to provide us comfort — or worse, anxiety — when we hear about information about our home values or construction. What does it really mean when we see signs in our neighborhoods?”

Magy said that from mortgage interest rates to taxes, no one is exempt from thinking about his or her home’s current state, how to improve it and what the future holds for it.

“These are the questions that occupy our thoughts and imagination … (and) that is only on the residential side, frankly,” he said.

Dan Elsea, president of the Southfield-based brokerage services Real Estate One, said during the event that the market has more buyers than listers of homes valued at under $250,000.

In a slide presentation, he showed that homes also valued at under $250,000 are marketed at or above the list price 33 percent of the time, with 41 percent of sales made in the first 30 days.

With homes valued between $250,000 and $500,000, there are a few more buyers than sellers, but it is more balanced. For homes over $500,000, in general, there are more listings than buyers, but that too is becoming more balanced.

“It is a good time to be a homeowner,” Elsea said.

And while it is a good time to be a homeowner, renters aren’t faring too badly either as part of a growing demographic — homeownership rates have fallen below historical averages.

Elsea added that homeowners are staying in their home longer, about 10-12 years, instead of the traditional seven years.

“Most of that was recession-related,” he said. “Homeowners realized that they could stay in their homes longer — 20 years ago, moving was the thing to do.”

He added that interest rates are going up and could be as high as 4.5 percent by the end of the year.


A synergistic Detroit
Michael McNally, vice president of operations for Olympia Development of Michigan, said Detroit denizens are in for a treat come September, when 50 blocks of bars, shops, parks, offices, housing, entertainment venues, sporting venues and other amenities will be developed to form District Detroit.

McNally told attendees that the live/work/play district will embody what is happening in the downtown.

“It is about energy. It is about critical mass. It is about excitement,” McNally said, adding that the new district will bring the downtown and midtown together, featuring a number of cultural and iconic spaces such as the new Little Caesar’s Arena in the district.

“The district is about great places, public spaces,” he said. “This is something we’re extremely proud of.”


Generation us
Stoskopf said that currently, millennials in the 19- to 37-year-old age bracket are filling up the workforce faster than the baby boomers are retiring.

“Guess what? They are all technically considered part of the labor force,” Stoskopf said. “They are here. The bathtub is filling up faster with labor now than anytime in our nation’s history.”

The largest active segment of people buying new homes are Gen. Xers.

“They are in the prime of their home-buying years,” he said, because they have more disposable income. However, there are more millennial millionaires than there are Gen X millionaires, he noted.

Stoskopf added that 84 percent of millennials believe that they should buy a home at some point.

Stoskopf said that if you are in real estate and you are communicating with millennials, you are probably dealing with the older millennials, who are about 37 years old.

“You are probably communicating with them by cellphone, by text message, by Instagram,” Stoskopf said.

Birmingham Bloomfield Chamber of Commerce President Joe Bauman said after the event that the purpose of the forecast series was to identify trends in certain industries.

“We want to tell people why things have happened — more importantly, what is going to happen in the next 12-24 months,” Bauman said, adding that he was surprised by the gap between the millennials and how they see home ownership.

“I think it shows that the real estate industry is a real barometer for the overall economy in southeast Michigan,” Bauman said, adding that property values are extremely important to the people who live in Oakland County. “I thought, overall, the news and information was positive.”

Annie Vangelderen, president and CEO of the Birmingham Bloomfield Art Center, said after the event that she is looking forward to progress in Detroit on the new district.

“New things are happening in the city; everything sounds promising. Even though I am a suburbanite, it is exciting to be part of that whole growth as far as Oakland County,” Vangelderen said. “I think we live in one of the greatest counties in the state of Michigan. We have so much to look forward to.”

For more information, go to BBCC.com.