Owners fret over property values
Poll: 44% in state concerned
BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER
October 22, 2006
Nearly half of Michigan homeowners are worried about the price they'd get for their house if they had to sell, according to a recent Detroit Free Press-Local 4 Michigan Poll.
Mark Hand, 45, a builder and remodeler from Grand Rapids, said he has builder friends who can't sell new houses they have built. Other friends trying to sell their own homes are also having a tough time.
"I'm not planning on selling my home, but if I were I'd be very worried," Hand said Thursday. "For people who need to move or sell, I'm glad I'm not in their shoes, I'll put it that way."
In the poll, 44% of Michiganders said they worried a lot or at least a little about their home values. Fifty-four percent said they weren't worried and 2% were not sure. The poll of 670 Michigan homeowners was conducted Oct. 8-11. It has a margin of error of plus or minus 3.9 percentage points.
There's good reason for concern. Sales of existing single-family houses were down 14.35% in Michigan through September of this year, compared to the same period last year, according to the Michigan Association of Realtors. That drop makes 2006 the worst year since at least the 1980s.
Prices are down 1.6% statewide so far this year, but in some markets, such as northern Oakland and Macomb counties, sale prices on existing houses have dropped closer to 10%, the association said.
Clearly Michigan's reliance on the ailing domestic auto industry has created a special worry for state residents. But Michiganders are hardly alone in their distress. Home sales are off nationwide.
The national sales decline is close to 13% so far this year. The inventory of homes for sale nationally has soared from about 2.3 million in 2003 to nearly 4 million today.
David Lereah, chief economist for the National Association of Realtors, blames the declines on inflated housing prices. In a recent analysis, Lereah wrote that housing prices simply got too high, cutting into affordability.
"Sellers need to abandon unreasonable expectations about the value of their homes," he wrote. "But there should be few worries for consumers. Most homeowners today have enjoyed substantial equity gains on their properties during the real estate boom years. Cutting prices by 5 or 10% will not wipe out their home equity gains."
Barbara House, 47, said many people in her northwest Detroit neighborhood are struggling just to afford their mortgage payments.
"People cannot keep their homes because they are losing their jobs, their way of life," she said Thursday. "I know of two people, friends of mine, that got jobs and had the 401(k) plan, the whole works, and went and bought a beautiful brand new home. And within six months time, they had lost their car and eventually they lost their home.
"Until something is done about the economy, people are going to keep losing their cars; they're going to keep losing their homes."
Poll: 44% in state concerned
BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER
October 22, 2006
Nearly half of Michigan homeowners are worried about the price they'd get for their house if they had to sell, according to a recent Detroit Free Press-Local 4 Michigan Poll.
Mark Hand, 45, a builder and remodeler from Grand Rapids, said he has builder friends who can't sell new houses they have built. Other friends trying to sell their own homes are also having a tough time.
"I'm not planning on selling my home, but if I were I'd be very worried," Hand said Thursday. "For people who need to move or sell, I'm glad I'm not in their shoes, I'll put it that way."
In the poll, 44% of Michiganders said they worried a lot or at least a little about their home values. Fifty-four percent said they weren't worried and 2% were not sure. The poll of 670 Michigan homeowners was conducted Oct. 8-11. It has a margin of error of plus or minus 3.9 percentage points.
There's good reason for concern. Sales of existing single-family houses were down 14.35% in Michigan through September of this year, compared to the same period last year, according to the Michigan Association of Realtors. That drop makes 2006 the worst year since at least the 1980s.
Prices are down 1.6% statewide so far this year, but in some markets, such as northern Oakland and Macomb counties, sale prices on existing houses have dropped closer to 10%, the association said.
Clearly Michigan's reliance on the ailing domestic auto industry has created a special worry for state residents. But Michiganders are hardly alone in their distress. Home sales are off nationwide.
The national sales decline is close to 13% so far this year. The inventory of homes for sale nationally has soared from about 2.3 million in 2003 to nearly 4 million today.
David Lereah, chief economist for the National Association of Realtors, blames the declines on inflated housing prices. In a recent analysis, Lereah wrote that housing prices simply got too high, cutting into affordability.
"Sellers need to abandon unreasonable expectations about the value of their homes," he wrote. "But there should be few worries for consumers. Most homeowners today have enjoyed substantial equity gains on their properties during the real estate boom years. Cutting prices by 5 or 10% will not wipe out their home equity gains."
Barbara House, 47, said many people in her northwest Detroit neighborhood are struggling just to afford their mortgage payments.
"People cannot keep their homes because they are losing their jobs, their way of life," she said Thursday. "I know of two people, friends of mine, that got jobs and had the 401(k) plan, the whole works, and went and bought a beautiful brand new home. And within six months time, they had lost their car and eventually they lost their home.
"Until something is done about the economy, people are going to keep losing their cars; they're going to keep losing their homes."
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