On Erskine Way in Waterford Township, two new homes are nearing completion.
The sign in front of one that’s most complete says, “Immediate Possession.”
By all signs, the local real estate market is positive, if not overwhelmingly brisk. New construction and existing home sales are both in play.
“We’re still seeing strong growth in new construction,” said Dave Hieber, manager of Oakland County Equalization, the county’s tax assessing arm. “It’s heavily concentrated in areas with room to grow.”
Room to grow in Oakland County, with some exceptions, continues to mean communities in the north and west parts of the county.
“We’ve seen improvements in price,” Hieber said. “Interest rates are low, foreclosures are down. Everything points to continued increases in residential property values.”
Average property values are projected to increase in all 61 Oakland County communities this year, some of them in double-digits. No community is expected to see its average property values decline.
Assessors aren’t expecting a rush in March to argue that property taxes should be lowered, even though values are rising significantly.
That’s because voters passed Proposal A in 1994, which limited property tax increases to the rate of inflation or 5 percent, whichever is less.
The inflation rate for this year is 0.9 percent, meaning that properties that weren’t sold will have property tax increases capped lower than what the assessed value may rise to.
In some communities seeing double-digit assessment increases, the inflation cap is a big difference from what valuation increases would otherwise be.
In all, eight Oakland County communities are looking at double-digit increases in average values: 14 percent in Ferndale, 13.95 percent in Oak Park, 11.17 percent in Novi Township, 11.07 percent in Southfield, 10.93 percent in Madison Heights, 10.26 percent in Pontiac, and 10.07 in Addison Township.
Most of the double-digit communities are older, tend to be more affordable than others anyway, and took the biggest hit after the recession began in 2007.
The tax limitation cap has had some effect on people seeking to have their property taxes lowered.
In 2008, 4.53 percent of all Oakland County owners sought tax reductions from local boards of review as property values tumbled. That’s nearly five of every 100 properties in the county.
But last year, that had dwindled to just a half percent, or five of every 1,000 properties, as values continued to rise and because of the cap on property tax increases for people who remain in their homes.
Another indicator of a healthier real estate market is the drop in mortgage foreclosures to a level not seen in 15 years.
The number of people losing their homes to foreclosure continues to fall dramatically.
In Oakland County, mortgage foreclosures fell to 1,181 in 2016, just a little above the 1,170 in 2001.
Foreclosures in Oakland County peaked at 9,242 in 2008, followed by 8,486 in 2009, and 9,290 in 2010. They’ve fallen steadily since.
BOARDS OF REVIEW
For property owners intent on appealing their property assessments to reduce their taxes, here’s the process:
• Notice of changes in residential assessments, or values, are required to go out at least two weeks before local tax boards of review meet.
• Most homeowners should receive the notices in mid to late February. Unless otherwise specified in a community’s charter, local tax boards of review will meet in March.
• Talk to the local assessor about the valuation of the parcel, check appraisal records to make sure they’re correct.
• To proceed, make an appointment to appeal the assessment with the local board of review.
• If not satisfied with the decision of the local board of review, an appeal can be made to the Michigan Tax Tribunal.
SOUTHEAST MICHIGAN
In general, southeast Michigan’s real estate market is doing well, according to Realcomp, the region’s real estate multiple listing service.
In the southeast Michigan counties of Oakland, Wayne, Macomb, St. Clair, Livingston, Genesee, and Wayne, prices and sales for residential real estate were up in December 2016 over a year ago, but the number of listings for sale fell a lot, according to Realcomp, the region’s multiple listing service.
Prices rose an average of 26.3 percent to $119,950 in Genesee County to just a half percent in St. Clair to $125,500. Average prices rose 4.5 percent in Oakland County to $207,000, 9.7 percent in Macomb County to $147,000, 14 percent in Livingston County to $245,000, 5.4 percent in Washtenaw County to $235,000, and 9.9 percent to $127,500 in Wayne County, excluding Detroit. In Detroit, prices fell 16.1 percent to $20,101.
Rising prices may not be much of a surprise considering the number of homes for sale fell dramatically, by 38.9 percent in Oakland County, 44.3 percent in Wayne County outside of Detroit, 50.1 percent in Macomb County, 37.1 percent in Livingston County, 22.4 percent in Washtenaw County, 48 percent in St. Clair County, and 29 percent in Genesee County. In Detroit the number of homes for sale fell 38 percent.
As the year ended, sales were most brisk in December primarily in communities in Wayne and Macomb counties, plus one Oakland County community.
Communities with the most sales in December, in order, were Detroit, Warren, Livonia, Clinton Township, Royal Oak, Canton Township, Sterling Heights, Macomb Township, Dearborn, and Westland.
Builders are looking forward to a healthy 2017.
The Home Builders Association of Southeastern Michigan expects a 4-6 percent increase in new residential construction in 2017 for single- and multi-family homes.
In 2016, 4,688 new construction permits were issued in Oakland, Macomb, Wayne and St. Clair counties, up 8 percent from the previous year. There were also 1,457 multi-family residential permits issued, up 9 percent.
In general, construction contractors expect to be busier in 2017, a survey of Michigan members of the Associated General Contractors of America indicates.
About 56 percent expect the dollar volume of construction projects will be higher than last year, including 20 percent who work on multi-family residential buildings. And half of those surveyed expect to have difficulty filling salaried and craft positions.