Falling Prices Stimulate Home Sales in Michigan
According to the Michigan Association of Realtors, home sales YTD (through October) in Michigan are up by +1.02% compared to last year, from 85,270 houses sold through October 2007 to 86,138 YTD this year. The YTD average home price in Michigan fell by -15%, from $141,681 last year to $120,418 this year. For the city of Detroit, home sales are up by a whopping 47% from 6,411 houses YTD in 2007 to 9,420 this year, as the average YTD price fell by 54% to $18,513 this year from $40,011 in 2007 (see chart above).
DETROIT NEWS -- Metro Detroit home sales rose again for the eleventh straight month, figures released Thursday show, though prices have continued a precipitous slide. According to data released by Realcomp, the Farmington Hills-based multiple listing service, November home sales increased 20.5% throughout the metro area compared to the same month last year; 4,644 homes sold this November, up from 3,853 sold in the same month last year.
Average prices for the metro area declined 45.4% to $62,800; last November, the average price was $115,000.
MP: The real estate market in Michigan is apparently in a major recovery process as falling home prices are stimulating home sales in Detroit and around the state. If it can happen in Michigan, it can happen any where.
HT: Bob Wright
11 Comments:
Does this mean you are long housing futures?
If not, why not?
Wait till the auto companies shut down. You will be paying people to take your house off your hands.
Perry is at ground zero when it comes to the real estate bust. He has such an ivory tower air about him, don't you think? I'm kinda partial to 4302 Carlton Street for 5 bucks a square foot. It amazes me that such an educated person can be such a twit!
anoniluvmichiganforeclosures:
The houses in your "air" link are and have been mostly ghetto for decades. These neighborhoods have been in decline ever since the exodus of the middle class began before I left Flint Central high school in 1980.
The recent real estate bust did not cause 1802 Maryland Ave, Flint, MI 48506 to all of a sudden lose its value. I was raised a couple of miles from there. That neighborhood has been in decline since the 70s.
Geez, Bob, maybe I wasn't clear enough with my caustic sarcasm. And since you were the hat tip for the blog post as a prior comment, perhaps, I owe you some respect.
Of course, I have been posting on this blog for more than 12 months under various handles, so perhaps you owe me some respect.
I can't get mid-grade oak hardwood flooring installed for less than 5 bucks a square foot.
Geez, Bob, maybe I am not clear enough to you on the cost to the public of ground zero. How in the hell could a house at 1916 Prospect Street, Flint be purchased/financed for $110,000 in 2005 and would cost me the equivalent of some hardwood flooring today?
I'm ready to trade an incandescent for a fluorescent any day.
Please clarify your graph. Certainly the average home price in Detroit cannot be $18,513 - not just yet anyway...
Detroit is demonstrating that, since housing stock is not easily destroyed (but can decline in quality without upkeep), that house prices, particularly with low demand and population flight, can fall below the cost of construction.
At the same time, it does indicate that that which cannot go on forever, stops. Housing construction has slowed. Prices will fall, but only to a point. They won't go so low in areas that people aren't fleeing.
The problems in Detroit housing are much more caused by the fundamental economic problems in that city than the housing bubble problems that plague places like CA, FL, NV, AZ.
Incidentally, October Traffic Volume Trends was just released by the FHWA. A 3.5% decline year-over-year. That's the smallest percentage decline since April (which may have been affected by the timing of Easter or Spring Break at colleges, since the March decline was very sharp), but OTOH still very sharp compared to other recessionary years.
It's also significant that gas prices averaged 370.3 cents in September but only 305.1 cents in October. So the October price decline, while fairly large, was not significant enough to cause traffic to rebound or even to slow its fall overmuch, when combined with other factors. Again, future data bears watching.
C.A.R. reports sales increased 117.1 percent in October.
Wow, falling prices stimulate home sales in California.
1916 Prospect St appears to have been involved in mortgage fraud. The house was sold in 2003 for 22,000. All the houses around are similarly inexpensive. Someone got an inflated home valuation and then used that to get a loan. They took the money, paid the seller part of it, and ran. The home went into foreclosure.
Or
I'm guessing that rents have not fallen in Michigan - data, anyone?
In a slumping economy, even people who feel they have the money to buy will often sit tight as they wait to see where the national economy is headed.
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