FOR SALE: THE STORIES BEHIND THE SIGNS: Sellers tough it out in buyer's market
Even with price cuts, homes sit and deals fall through
BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER
November 26, 2006
To the shared experiences of life in metro Detroit, from rooting for the Tigers to fretting over automotive layoffs, add a new one: not being able to sell a house this year.
Gilda Bone knows all about it.
Since she put her family's Saline duplex on the market two years ago, she's cut the price from $257,000 to $199,000 -- and still has no buyer.
Then there's John and Beth Fohrman of Ann Arbor, who each brought a home to their recent marriage. They sold John's house after cutting the price, closed on their new house and put Beth's condo up for sale in 2005. The condo remains on the market after five price cuts.
"It's a big inconvenience," John Fohrman said last week, "but we're grateful for our blessings."
Sales of houses and condominiums have plunged during the past year, in the worst housing market since at least the 1980s. As a result, prices have begun to decline sharply. Last week, the National Association of Realtors said Detroit-area home prices posted the worst decline of any urban area in the nation during the period from July to September period, down 10.5% from the same period a year before.
And a lot of owners who think they have finally found a buyer are seeing the deals fall through because of the uncertain employment situation.
Bone has had at least five signed purchase agreements, but none made it to closing. Two of her buyers experienced layoffs and had to back out. Others just got cold feet.
"We've been as flexible as we can be with them," Bone said.
In the meantime, she's put a new roof on her duplex and has painted the interior to make it more attractive.
"We've been taking on projects that we had hoped would be somebody's else's projects," she said this month.
The sales slump has been especially difficult for people such as John and Linda Bruce, who are paying two mortgages -- one for the home in Grosse Pointe Farms they haven't been able to sell in more than a year, and one on their new, smaller ranch home in St. Clair Shores.
"We were not prepared for what's happened here. ... It has not been easy," John Bruce said this month.
Of course, sellers' pain translates into buyers' gain, said Pat Vredevoogd Combs, a Grand Rapids-area broker who became president of the National Association of Realtors this month.
"Buyers out there have choice," she said. "They can take their time a little bit, as opposed to a crazy, frantic marketplace where they've got to buy the first thing and then maybe not be happy with it."
But that's not much consolation to buyers who haven't been able to sell their old home.
"It was easier finding a home than selling this one," Doreen Badgett of Troy said of her previous home in Southfield, which has been on the market for three months.
Michigan hit especially hard
The slump in sales comes despite low interest rates and an economy that, by national standards at least, is pretty good.
The Michigan market, however, has been hit particularly hard by layoffs in the automotive industry. But the problem of slow house sales is not confined to the state.
Across the nation, a slump in sales of houses and condominiums followed years of rapid price appreciation. Many market-watchers blame today's slump on a price bubble that finally burst.
"A lot of things are overpriced," Sherri Richwine, a broker with Real Estate One in Ann Arbor, said this month. "People are not being realistic. Just because they received a large paper appreciation, they think they should be able to sell it for that. In reality, the gain is not as great as they thought."
Still others said the slump may have been worsened by several years of brisk activity by home builders, who have delivered thousands of new homes onto the market.
With prices plunging, home-building activity, too, has slumped dramatically in recent months, with new residential-building permits in southeast Michigan down 66.2% to 526 in October, compared with 1,557 in October 2005, according to data from the Southeast Michigan Council of Governments.
Real estate goes in a cycle
Some realty agents report signs that the slump may be easing. Gary Severn, a veteran agent in the Grosse Pointe market, said this month that more people are attending open houses and calling to ask about places listed for sale.
But even if agents are hopeful, a recovery hasn't shown up yet in sales figures. For September, sales in Michigan were off more than 14% compared with September 2005.
Declines have been especially sharp in Livingston County, where sales were down 26% in September from a year before, and Monroe County, where sales were off nearly 32% during the month. September was the most recent month for which data were available.
The Detroit Board of Realtors reported sales up 6.6% during September. The city is one of the few areas of the state to show a gain.
Even so, Vredevoogd Combs, a 35-year veteran of the business, said this month that better days are coming.
"We're in a cycle where we've got a lot more houses than we do buyers," she said. "Pretty soon, we're going to be in a cycle where we have a lot more buyers than we do houses. That's kind of the cycle of real estate life."
Even with price cuts, homes sit and deals fall through
BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER
November 26, 2006
To the shared experiences of life in metro Detroit, from rooting for the Tigers to fretting over automotive layoffs, add a new one: not being able to sell a house this year.
Gilda Bone knows all about it.
Since she put her family's Saline duplex on the market two years ago, she's cut the price from $257,000 to $199,000 -- and still has no buyer.
Then there's John and Beth Fohrman of Ann Arbor, who each brought a home to their recent marriage. They sold John's house after cutting the price, closed on their new house and put Beth's condo up for sale in 2005. The condo remains on the market after five price cuts.
"It's a big inconvenience," John Fohrman said last week, "but we're grateful for our blessings."
Sales of houses and condominiums have plunged during the past year, in the worst housing market since at least the 1980s. As a result, prices have begun to decline sharply. Last week, the National Association of Realtors said Detroit-area home prices posted the worst decline of any urban area in the nation during the period from July to September period, down 10.5% from the same period a year before.
And a lot of owners who think they have finally found a buyer are seeing the deals fall through because of the uncertain employment situation.
Bone has had at least five signed purchase agreements, but none made it to closing. Two of her buyers experienced layoffs and had to back out. Others just got cold feet.
"We've been as flexible as we can be with them," Bone said.
In the meantime, she's put a new roof on her duplex and has painted the interior to make it more attractive.
"We've been taking on projects that we had hoped would be somebody's else's projects," she said this month.
The sales slump has been especially difficult for people such as John and Linda Bruce, who are paying two mortgages -- one for the home in Grosse Pointe Farms they haven't been able to sell in more than a year, and one on their new, smaller ranch home in St. Clair Shores.
"We were not prepared for what's happened here. ... It has not been easy," John Bruce said this month.
Of course, sellers' pain translates into buyers' gain, said Pat Vredevoogd Combs, a Grand Rapids-area broker who became president of the National Association of Realtors this month.
"Buyers out there have choice," she said. "They can take their time a little bit, as opposed to a crazy, frantic marketplace where they've got to buy the first thing and then maybe not be happy with it."
But that's not much consolation to buyers who haven't been able to sell their old home.
"It was easier finding a home than selling this one," Doreen Badgett of Troy said of her previous home in Southfield, which has been on the market for three months.
Michigan hit especially hard
The slump in sales comes despite low interest rates and an economy that, by national standards at least, is pretty good.
The Michigan market, however, has been hit particularly hard by layoffs in the automotive industry. But the problem of slow house sales is not confined to the state.
Across the nation, a slump in sales of houses and condominiums followed years of rapid price appreciation. Many market-watchers blame today's slump on a price bubble that finally burst.
"A lot of things are overpriced," Sherri Richwine, a broker with Real Estate One in Ann Arbor, said this month. "People are not being realistic. Just because they received a large paper appreciation, they think they should be able to sell it for that. In reality, the gain is not as great as they thought."
Still others said the slump may have been worsened by several years of brisk activity by home builders, who have delivered thousands of new homes onto the market.
With prices plunging, home-building activity, too, has slumped dramatically in recent months, with new residential-building permits in southeast Michigan down 66.2% to 526 in October, compared with 1,557 in October 2005, according to data from the Southeast Michigan Council of Governments.
Real estate goes in a cycle
Some realty agents report signs that the slump may be easing. Gary Severn, a veteran agent in the Grosse Pointe market, said this month that more people are attending open houses and calling to ask about places listed for sale.
But even if agents are hopeful, a recovery hasn't shown up yet in sales figures. For September, sales in Michigan were off more than 14% compared with September 2005.
Declines have been especially sharp in Livingston County, where sales were down 26% in September from a year before, and Monroe County, where sales were off nearly 32% during the month. September was the most recent month for which data were available.
The Detroit Board of Realtors reported sales up 6.6% during September. The city is one of the few areas of the state to show a gain.
Even so, Vredevoogd Combs, a 35-year veteran of the business, said this month that better days are coming.
"We're in a cycle where we've got a lot more houses than we do buyers," she said. "Pretty soon, we're going to be in a cycle where we have a lot more buyers than we do houses. That's kind of the cycle of real estate life."
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