Michigan Home Sales Increase in 2008
We hear a lot of bad news about the real estate market, and the Michigan real estate market is supposed to be one of the worst in the country. Therefore, you might be surprised to learn that the number of homes sold in Michigan actually increased by +1.43% in 2008, from 99,552 homes sold in 2007, to 100,943 units in 2008 (data here). What makes that even more impressive is that nationally, home sales decreased by -13% in 2008 vs. 2007, and sales in the Midwest declined by -15% (data here).
Of course, the average home price in Michigan declined by -16%, from $140,724 in 2007 to $117,940 in 2008, but that's part of the recovery process - falling home prices eventually stimulate an increase in the number of homes sold, and that's what's happening in the Michigan real estate market.
7 Comments:
Mark, are you actually *long* this market?
I hope not, because it's not over yet. Not by a long shot. 2/3 of the foreclosed homes are *not yet on the market*.
Flood of foreclosures: It's worse than you think
Banks are moving slowly to list repossessed homes for sale, which could mean that housing inventory is even more bloated than current statistics indicate. (more)
http://money.cnn.com/2009/01/21/real_estate/ghost_inventory/index.htm?postversion=2009012314
Here We Go Again: S&P Slashes Thousands of RMBS Ratings
By PAUL JACKSON
February 3, 2009
There’s a saying about death by a thousand paper cuts, and that’s clearly been taking place for most of the private mortgage-backed securities market over the course of the past twelve months. On Monday, Standard & Poor’s Ratings Services lowered the boom — again — on thousands of Alt-A and subprime RMBS, moving them all to a ‘D’ rating, as well as cutting hundreds of formerly AAA-rated securities multiple notches from their previous perch atop the ratings heap. The agency also began cutting ratings on prime deals, as well. (more)
http://www.housingwire.com/2009/02/03/here-we-go-again-sp-slashes-thousands-of-rmbs-ratings/
I certainly hope no one is making investment decisions based on this blog...
With respect (actually like this blog a lot)
Dave
Dave: In terms of maximizing your profits, it is far better to wait till the market is quite obviously rebounding, right?
When you factor in foreclosures in the equation, and the lowest interest rate, one person's misfortune becomes another man's fortune.
However, the eye may be bigger than the wallet.
Some banks are also buying them up.
Banks also are holding onto forclosed property to get the mortage insurance. It isn't until that happens then the banks will release it.
Also, alot of foreclosures will wind up back on the market after they are purchased. This is well known fact.
Buyers get in over their heads on wanting to get a good deal, only to find out it becomes a money pit.
You will find a simlilar trend in California.
http://www.dqnews.com/CHMDH0205.shtm
This is not an indication of a rebound in an economy.
The foreclosures are coming in waves.
Besides, if Michigan Democrats have taught us anything these last six years its that you can't praise the increase in something unless its of equal or greater value than a similar item in other states.
They always complained that yeah, sure, the national economy added millions of new jobs... BUT, they'd condescend, those are low paying jobs compared to Michigan jobs... which continue to die in droves.
Same principle. Home sales are up? That doesn't count. They aren't good prices.
No, it doesn't make any rational sense, but that's the modern Democratic Party. More about the sound byte and the election strategy than truth and results.
--Nick
www.RightMichigan.com
Others here are absolutely right: My son-in-law just bought a foreclosed home from a bank for less than one-half of its normal market value. One can't honestly regard these "fire-sale" stats as a positive sign that the real estate market has turned around or that the problem had been overstated, as the original posting seems to imply.
"One can't honestly regard these "fire-sale" stats as a positive sign that the real estate market has turned around "
It certainly "turned around" for your son-in-law. Most ppl (especially those with limited economic literacy), are more comfortable with a negative view on the economy even when economic conditions are serendipitous for them. I guess it's just human nature(?)
Mika: The point is that selling off the foreclosed properties is part of the rebuilding process. This is the clearing of the dead wood which will then allow for new growth in the proverbial forest.
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