Home sales get winter lift
Region enjoys a 6.7%-increase in February
March 9, 2007
BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER
Home sales turned upward in February in southeast Michigan, but like the Detroit Lions winning a game, it's hard to tell whether it's a fluke or a sign of recovery.
The multiple-listing service Realcomp reported Thursday that sales of single-family houses and condominiums in the region increased by 6.7% from January to February.
Karen Kage, chief executive of the Farmington Hills-based service, said January's sales of 2,985 single-family and condominium homes increased to 3,184 last month, even though February had three fewer days. February's sales were also above the 3,159 sales recorded in the same month a year ago.
Moreover, pending sales -- an indication of deals not yet closed -- were on the rise, giving hope that the month's uptick may be repeated in March, April and beyond.
"It's the first really positive thing we've seen since about the second quarter of last year," Kage said.
To be sure, the increases are very modest, and home sales are still far below where they were two or three years ago.
What improvement occurred may be due to bargain hunting. Median sale prices continue to decline and stood at $130,047 in February in southeast Michigan, the Realcomp data showed. That was down from $140,000 in February 2006 and $150,000 in February 2005.
Moreover, sales are taking longer and requiring price cuts and other concessions.
Johnie Fairchild, 71, a retired nurse, said she recently sold her ranch home near 8 Mile and Evergreen in Detroit for $103,000, but it took a year and two cuts from the original asking price of $119,000.
"With it being a buyer's market, so many homes available, people have a lot to choose from," she said.
Her real estate agent, Darralyn Bowers of Southfield-based Bowers & Associates, said sellers must contend with demanding shoppers.
"We have a guarded, cautious buyer now. They're working with a sharp pencil," Bowers said.
Falling prices aren't the only sign of a fragile market. Foreclosures have been rising sharply in Michigan, and home builders are building fewer residential units than at any time since the early 1980s, according to the latest building-permit data from the Southeast Michigan Council of Governments.
SEMCOG's data showed that net residential permits were about 7,500 last year, compared with more than 21,000 in 2004.
The current housing slump began in mid-to-late 2005 and deepened throughout 2006 in nearly all areas of Michigan. The number of transactions declined last year by nearly 14% for all of Michigan, and by more than 20% in many parts of metro Detroit.
Nationally, sales figures have begun to show a modest improvement, leading some analysts to say the slump bottomed out last fall and a modest recovery had begun.
Last week, David Lereah, chief economist for the National Association of Realtors, predicted that an "underlying pattern of stabilization in the housing market" would lead to stronger sales in coming months.
Some analysts say a national improvement may have become more apparent already if the harsh weather that afflicted much of the nation so far this year had not held down sales.
Region enjoys a 6.7%-increase in February
March 9, 2007
BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER
Home sales turned upward in February in southeast Michigan, but like the Detroit Lions winning a game, it's hard to tell whether it's a fluke or a sign of recovery.
The multiple-listing service Realcomp reported Thursday that sales of single-family houses and condominiums in the region increased by 6.7% from January to February.
Karen Kage, chief executive of the Farmington Hills-based service, said January's sales of 2,985 single-family and condominium homes increased to 3,184 last month, even though February had three fewer days. February's sales were also above the 3,159 sales recorded in the same month a year ago.
Moreover, pending sales -- an indication of deals not yet closed -- were on the rise, giving hope that the month's uptick may be repeated in March, April and beyond.
"It's the first really positive thing we've seen since about the second quarter of last year," Kage said.
To be sure, the increases are very modest, and home sales are still far below where they were two or three years ago.
What improvement occurred may be due to bargain hunting. Median sale prices continue to decline and stood at $130,047 in February in southeast Michigan, the Realcomp data showed. That was down from $140,000 in February 2006 and $150,000 in February 2005.
Moreover, sales are taking longer and requiring price cuts and other concessions.
Johnie Fairchild, 71, a retired nurse, said she recently sold her ranch home near 8 Mile and Evergreen in Detroit for $103,000, but it took a year and two cuts from the original asking price of $119,000.
"With it being a buyer's market, so many homes available, people have a lot to choose from," she said.
Her real estate agent, Darralyn Bowers of Southfield-based Bowers & Associates, said sellers must contend with demanding shoppers.
"We have a guarded, cautious buyer now. They're working with a sharp pencil," Bowers said.
Falling prices aren't the only sign of a fragile market. Foreclosures have been rising sharply in Michigan, and home builders are building fewer residential units than at any time since the early 1980s, according to the latest building-permit data from the Southeast Michigan Council of Governments.
SEMCOG's data showed that net residential permits were about 7,500 last year, compared with more than 21,000 in 2004.
The current housing slump began in mid-to-late 2005 and deepened throughout 2006 in nearly all areas of Michigan. The number of transactions declined last year by nearly 14% for all of Michigan, and by more than 20% in many parts of metro Detroit.
Nationally, sales figures have begun to show a modest improvement, leading some analysts to say the slump bottomed out last fall and a modest recovery had begun.
Last week, David Lereah, chief economist for the National Association of Realtors, predicted that an "underlying pattern of stabilization in the housing market" would lead to stronger sales in coming months.
Some analysts say a national improvement may have become more apparent already if the harsh weather that afflicted much of the nation so far this year had not held down sales.
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