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Waiting for the Ann Arbor Real Estate Market to Hit Bottom?

It May Already Have.

Washtenaw County home buyers trying to time the real estate market today may think they have it down to a science. It’s all over the news, in the papers; they hear that prices are dropping, and assume the bottom hasn’t arrived. So they wait.

But, there is just one problem. The bottom for interest rates, and possibly Ann Arbor home prices, appears to be gone. And it just so happens that interest rates are a very powerful determinant of how much home you can afford and what you’ll pay each month – even more powerful, in some instances, than the price you pay for the home.

Conforming 30-year mortgage rates are on the rise, averaging 4.85% for the third week of December. This is consistent with the Mortgage Bankers Association’s (MBA) prediction that the average rate on the 30-year loan will increase to 5.3% in the first half of 2011, and is expected to reach 5.5% by the end of the year. Meanwhile, the Michigan Association of Realtors reports that the average home price increased 8.59% year-to-date in October 2010 when compared to October 2009, and is forecasted to remain steady, while the U.S. economy will enjoy stronger than expected growth in 2011.

In Michigan, the economy is slowly seeing signs of improvement. State-wide unemployment has seen a steady decrease since July, with Washtenaw County’s unemployment rate dropping 2.2% for the same time frame, according to Michigan.gov. Consumer confidence has also increased from 48.7 in November 2009 to 54.1 for November 2010. And, while the Fed has stated its intention to purchase an additional $600 billion in Treasury securities, the MBA says this move is priced into current rates.

It may be hard to believe, but in the long run it makes more financial sense to buy a home at a higher price with a lower interest rate than vice versa. Interest rates can impact your payments and purchasing power more than the price of a home. A 1% increase in the interest rate can affect your purchase power by $11,000 per $100,000. So instead of trying to time the bottom for prices, get the best interest rate you can on a mortgage and home that’s right for you – and that time is now.

To learn more about mortgage interest rates and how they can affect your overall purchasing power, please contact the Ann Arbor Real Estate experts at The Bouma Group at 734-761-3060 or info@bouma.com. We can help you find the perfect piece of Ann Arbor real estate.  And please remember that we’re never too busy for your referrals.


Posted Wednesday, December 29, 2010 by Martin Bouma
Tags: ann arbor real estate, mortgage interest rate

Avoid Headaches at the Holidays and Throughout the Year by Saving Energy in the Kitchen

As families around Ann Arbor prepare for the bustling holiday season, it's important to remember that maintaining large kitchen appliances is a key element to peace of mind. The last thing you need while preparing for a party or holiday feast is a problem with your refrigerator or dishwasher, in addition to the worry of overspending on your energy budget! With occasional light maintenance and good usage habits, you can avoid hassles throughout the year. Here are a few tips for keeping your large kitchen appliances in perfect working order (and saving money in the bargain):


Refrigerators and Freezers


  • Adjust the thermostat. Because it cycles on and off all day, your refrigerator consumes more electricity than any appliance in the home (aside from the heating and cooling system). When you set the thermostat colder than it needs to be, you could be increasing your fridge’s energy consumption by as much as 25%. Adjust the refrigerator so that it stays in the 37-40F range. Try to keep your freezer between 0-5F. If your model doesn’t display the current temps, invest in two appliance thermometers (one for the fridge, one for the freezer).



  • Clean the coils. As dust accumulates on the condenser coils on the rear or bottom of the fridge, it restricts cool-air flow and forces the unit to work harder and longer than necessary. Solve the problem by vacuuming away the dust that accumulates (every six months or so). Also, make sure there's at least a 3-inch clearance at the rear of the fridge for proper ventilation.



  • Use ice cube trays. Automatic ice makers are a nice convenience, but it turns out the mechanisms are energy hogs. They're also prone to frequent problems. By switching off the ice maker and using trays, you can avoid potential problems, while saving about $12 to $18 on your annual electricity bill. Most units require little more than a lift of the sensor arm to switch them off.


  • Unplug the extra fridge when it's not in use. Many homes have an extra refrigerator that runs year round, even though it’s used sparingly – a real dollar waster. To save energy, and get the most mileage from the unit, make sure the extra fridge remains three-quarters full at all times. This helps maintain a steady internal temperature, and lets the fridge recover more quickly after the door is opened and closed.


Ovens and Ranges



  • Cut the power early. If you've ever bumped a burner on an electric stove, you know that those heating elements stay hot long after they’ve been switched off. This is an especially prevalent mishap during the holidays, when everyone wants to help out in the kitchen. Put the residual heat to work by shutting off the burner several minutes before the end of the cook time. Do the same with your oven.


  • Match the burner to the pan. By matching the burner to the pan, electricity won’t be squandered heating the kitchen rather than the food. The reverse is true, too. A small burner will take considerably longer to heat a large pan than would an appropriately sized burner. For gas stoves, don’t let the flames lick the sides of the pot.


  • Stop preheating. Experts agree that unless you're baking breads or cakes, this practice is completely unnecessary. You may need to add a few minutes to the overall cooking time, but it eliminates all that wait time (and energy waste) on the front end.


Dishwashers



  • Activate energy-saving features. A dishwasher’s heated dry cycle can add 15% to 50% to the appliance’s operating cost. Most machines allow the feature to be switched off (or not turned on), which can save $8-$27 per year. If your dishwasher doesn’t have that flexibility, simply turn it off after the final rinse, and open the door.


  • Use the machine. Many homeowners believe they can save water and energy by hand washing dishes. The truth is that a dishwasher requires less than one-third the water needed to wash those dishes by hand. Run the machine, and you can cut down the operating time of your hot water heater. Plus, you'll avoid the frequent occurrence of accidents with knives and glassware.


Enjoy a relaxed holiday season in your Ann Arbor home! Martin Bouma - your Ann Arbor expert – can help you find the perfect piece of Ann Arbor real estate. Whether you’re buying or selling a home, the Bouma Group can answer any questions you have about real estate in Ann Arbor. Thinking of settling down in Washtenaw County, Saline, or a specific Ann Arbor neighborhood? Call the Bouma Group today! And don’t forget to check out our Condo Hotline – we know the Ann Arbor condominium market better than anyone.



Posted Tuesday, December 07, 2010 by Martin Bouma
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The Basics of Condominium Ownership in Ann Arbor

There are a great many benefits to purchasing a condominium in Ann Arbor. If you're considering buying a condo, you're likely to have questions. Here are a few answers to get you on the road to one of today's hottest trends in home ownership – condominium living!


What is a condominium, and why should I buy one?


A condominium is a form of home ownership in which individual units of a larger complex are sold, not rented. These units may be renovated apartments, townhouses, or newly-constructed units. Contrary to popular belief, the word 'condominium' does not apply to the type of unit itself, but the legal ownership arrangement. Buying a condo provides all of the benefits of home ownership, at a price very competitive with the majority of rentals. Now is the time to stop paying your landlord's bills, and begin building something for yourself!


What are “common elements,” and who is responsible for them?


Common elements are areas of the property that are used by all residents. These can include, but are not limited to, laundry rooms, halls, walkways and lawns. Each condo owner has an undivided ownership interest in the common elements. While condo sales are underway, the developer or a professional management company usually runs the day-to-day operations of the property. After 75% of the units are sold, the developer passes these responsibilities on to the condominium owners, who elect directors and officers to handle the future operations of the complex. The directors can either manage the property themselves, or seek the services of a professional management firm.


What are the benefits of condominium ownership?


In a condo, you are the owner – you have total control of what you do with your space. Do you want to paint a mural in your living room? Thinking you'd like some really exotic carpeting in your bedroom, or hardwood floors in the dining room? These are all your choice in a condominium. Additionally, as with any other purchased home, condo owners are building equity with every payment made.


Martin Bouma is your Ann Arbor condominium expert. We offer a Condo Hotline, where you can learn about all of the condominiums available in the area. We will find Ann Arbor real estate that’s exactly right for YOU. Whether you’re buying or selling a home, the Bouma Group can answer all of your questions about real estate in Ann Arbor, whether you’re interested in Washtenaw County, Saline, or a specific Ann Arbor neighborhood.



Posted Friday, December 03, 2010 by Martin Bouma
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