Falling Prices Stimulate Michigan Home Sales

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.

Comments

[jepittman:]

Where O Where is CNBC?? Its a lead pipe cinch Prince David (Faber) will never report THIS.

2008 Dec 13 06:57 PM

[AlexR:]

Yes, but what kind of home do you get for $18K?

2008 Dec 13 07:55 PM

[Prudent Man...:]

Many in Congress (no term limits to get new blood) want to put a floor on house prices to hurt the buyers and a ceiling on interest rates to hurt savers. Now that is what we get out of a liberal congress. Wait until we get them combined with a socialist prez who stated this week he wants to put a price cap on new medical procedures so that we won't have any new medical procedures.

As a cancer patient who starts a second round of chemo next week I wonder about the intellect, or lack thereof, of our citizens like Soros, Gates and Buffet who support these enemies of the Free Enterprise System that made them billionaires. I know rich people believe they are better than anyone else but they prove time again that aren't smarter just luckier, and in some of their cases the luck is changing.

(What you get for an 18K house is what you deserve!)

2008 Dec 13 08:27 PM

[herbert hoover:]

LOL - if you foreclose on enough properties the number of "sales" goes up.

2008 Dec 13 08:33 PM

[In The Mitten:]

The prices have plummeted, because so many people have lost their jobs as a result of the Auto Industry crisis that people are losing their homes and others still can't afford to buy. There are tons of houses on the market right now. Trust me, we are not in a "Real Estate recovery". It's just that some people are now being able to buy a home, because the price dropped so much. Once those people are done buying, sales will be back down and there will probably be even more foreclosures coming. The author obviously has no idea what's really going on.

Also, in case you can't figure it out... those houses for $18K are in the places where most people don't want to live. The people buying them can't afford anything better. Some of them are also being bought by landlords and being rented out, which doesn't show up in the sales figures. I'm pretty sure (but don't have actual info) that there's more renters than homeowners in the current situation.

2008 Dec 14 03:35 AM

[Alphameister:]

So the good news is that after housing prices have dropped 80% from their peaks we can expect demand to pick up? Lucky Michigan to be able to lead the recovery! Arghhhhhhhh

2008 Dec 14 09:28 AM

[GS from Ohio:]

The increase in volume is mainly due to people from out of town buying up foreclosure properties on a purely speculative basis. They are seduced by the low prices, but what they are getting are shells of homes that can only be sold as fixer uppers.

2008 Dec 14 09:33 AM

[Fab From Mi...:]

Yes, Many of the people in Michigan are scared to buy the homes. Loan originations are down by almost the same percentage that rentals are up, creating not merely speculation, but oportunity for those with the foresight to capitalize on such investments due to the increase of rental demand. Buy a home for 18K put 5-10k into it. Get a Section 8 lease paid from the government and you have cash flow. Cash flow put's money into the economy. Not exactly the recovery that everyone wants, but it's small steps in the right direction and at least there are some people buying out there rather than no one at all.

"Be Fearful when others are Greedy and Greedy when others are Fearful" Warren Buffet.

go to: fixhousingfirst.com if you want to help the economy, until housing stabilizes, we cannot expect anything else to.

2008 Dec 14 11:26 AM

[epeon:]

I was born and raised in Michigan. I worked there in the 70s and 80s. Anyone who thinks that the current economic problems are due to recent events is woefully mistaken. I watched the state government run dozens of chemical and food processors out of the state because they were "dirty" polluters. I watched companies bypass Michigan because of its difficult regulatory environment. Michigan made itself a one industry state. It put all its eggs into the auto/UAW basket.

2008 Dec 15 08:31 AM