TIME TO INVEST IN SOUTHEARN MICHIGAN!

The Michigan economy is not out of the water just yet, but there are some very encouraging signs indicating that things may be turning the corner.

1. Detroit's Automakers Are All Producing Profits It is no secret that Michigan's economy is heavily tied to the automotive industry. In recent years, the automakers have struggled tremendously, but the restructuring is starting to take hold. In the 2nd quarter of 2010 all three of Detroit's automakers were in the black posting the following profits: Ford - $2.6 Billion - General Motors $1.3 Billion -Chrysler - $183 Million

This is welcomed news for the Michigan job market as these profits have already resulted in renewed investments into Michigan's economy. These investments are expected to create approximately 63,000 jobs.

2. The State of Michigan Has Provided a 42% Tax Credit to Film Makers In April 2008, the state of Michigan announced a 42% tax credit for film makers that produce films using Michigan workers. This has spurred a flurry of film making activity. Before the incentive, Michigan averaged five film productions annually. In 2008 -31 films were produced, and in 2009- 35 films were produced. This trend is expected to continue with the announcement of 3 major studios to be built in Pontiac, Detroit, and Grand Rapids. These studios alone are expected to bring 6500 permanent jobs to Michigan.

3. Investment in Renewable Wind Energy Because of Michigan's vast coastlines along the great lakes, the wind potential is phenomenal. Michigan has enacted the Renewable Portfolio Standard which requires 10% of the state's energy demand to come from renewable resources by 2015. This standard is sure to drive investment into renewable energy resources in Michigan.

2011 REAL ESTATE PREDICTIONS

Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets:


1. Low mortgage rates. With Fed observers expecting the central bank to keep the federal funds rate at its current target range of 0 percent to 0.25 percent for most (or all) of 2011, relatively low mortgage rates will be a feature of the 2011 mortgage market.

2. Prices have hit bottom. House prices are likely to begin a gradual, but sustained recovery in the second half of 2011.

3. Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market in the New Year, likely translating into more home sales in 2011 than in 2010.

4. Refinances will dwindle. Many eligible borrowers have already refinanced and the federal Making Home Affordable refinance program is expiring on June 30. While fixed-rate loans are likely to remain low, they will move up gradually, making it even less likely that refinances will be attractive to most home owners.

5. Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings - known as the "seriously delinquent rate" - generally crests within a year of the start of the recovery in payroll employment, and this economic recovery appears to fit within that pattern. Payrolls began to rise last January, and by the spring the seriously delinquent rate had begun to fall.

Source: Freddie Mac (12/09/2010)

HOMEOWNERS LOWER THEIR DEBT!

 In the 1/3 quarter of  2010, 33 % of homeowners who refinanced their first-lien home mortgage lowered their principal balance by paying-in additional money at the closing table. This is the second highest "cash-in" share since Freddie Mac began keeping records on refinancing patterns in 1985.

CONSUMER CONFIDENCE AT 6 MONTH HIGH!

In November, University of Michigan consumer confidence rose back to the highest level since June supported by gains in both economic conditions (79.7 from 76.6) and the economic outlook (62.7 from 61.9). According to the first estimate, Michigan consumer confidence rose from 67.7 to 69.3, slightly above the consensus estimate of 69.0. The one-year inflation outlook rose to 3.0%, the highest level since May 2010. The recent positive economic news might have brightened consumer's sentiment, although labor market conditions remain very fragile.