Foreclosures fuel trend
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • October 14, 2008
Driven down by sales of foreclosed homes, median sale prices fell 34% in metro Detroit in September compared with a year ago, dipping below $10,000 in the city of Detroit.
The median price on a house or condo sold in Detroit last month plummeted 57%, to $9,250, from $21,250 a year ago, according to figures released Monday by Realcomp, a multiple listing service based in Farmington Hills.
Foreclosures represented two-thirds of sales in Detroit in September, and they boosted sales by 81% as buyers laid claim to 1,019 homes.
For the wider metro area, the median sale price was down 34%, from $129,000 a year ago to $85,000 last month.
"There's tons of properties out there that investors are snapping up and that skews the numbers," said Joy Santiago, a Southfield-based real estate broker. "You can't say in the city of Detroit that the values are down, because many areas are strong, like Indian Village and Palmer Woods. They are a little bit more stable."
Sales are picking up, she said.
"People have to start realizing there are awesome deals out there, and it is just the time to purchase," Santiago said. "September for me, in the past 10 years, has been slow, but it was my best September ever."
Dan Elsea, president of brokerage services for Real Estate One in Southfield, said the prices are evidence of heavy investor activity in Detroit.
"We are seeing that low end of the market sell quicker. If you have a $75,000 house in the city of Detroit, there are not a lot of buyers for it," Elsea said. "But if you have an $8,500 house, it sells very quickly."
He said that if investor activity is factored out, the true price depreciation in metro Detroit, excluding the city, is at a rate of 1% a month since last September.
Realcomp reported that 5,818 sales of houses and condos in the metro area were concluded during September, up 57% from 3,703 sales in the same month a year ago. The figures consist of closed sales reported by Realtors who subscribe to the service.
More than 37% of the September sales in the metro area were foreclosures, according to Karen Kage, Realcomp president.
But have we hit bottom yet?
"It is near impossible for me to say we are near done," Kage said.
Wayne County sales were up 73%, to 2,278, from 1,320 in September 2007; Oakland County sales rose 51%, from 941 to 1,422; Macomb County sales were up 58%, from 478 to 754, and Livingston County sales were up 45%, from 138 to 200.
And pending sales in September were up 75%, to 7,832 from 4,472 in September 2007. Pending sales are those with signed purchase agreements that have not closed.
With the credit crunch and falling prices, more pending deals are falling apart at the closing table. In September, 1,265 properties went back on the market that were either pending or withdrawn from the market. That compares with 732 properties put back on the market in September 2007, Kage said.
"It's not the best news ever," Kage said of the falling sales prices. "We have said all along that until we weed out some of the inventory, we will not see prices rise."
Realcomp also reported that housing inventory in metro Detroit dropped 16%, to 63,453 homes and condominiums on the market, as compared with 75,932 listings in September 2007. That's a 10.9-month supply at the current sales pace, far above a normal market of a three- to six-month supply.
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • October 14, 2008
Driven down by sales of foreclosed homes, median sale prices fell 34% in metro Detroit in September compared with a year ago, dipping below $10,000 in the city of Detroit.
The median price on a house or condo sold in Detroit last month plummeted 57%, to $9,250, from $21,250 a year ago, according to figures released Monday by Realcomp, a multiple listing service based in Farmington Hills.
Foreclosures represented two-thirds of sales in Detroit in September, and they boosted sales by 81% as buyers laid claim to 1,019 homes.
For the wider metro area, the median sale price was down 34%, from $129,000 a year ago to $85,000 last month.
"There's tons of properties out there that investors are snapping up and that skews the numbers," said Joy Santiago, a Southfield-based real estate broker. "You can't say in the city of Detroit that the values are down, because many areas are strong, like Indian Village and Palmer Woods. They are a little bit more stable."
Sales are picking up, she said.
"People have to start realizing there are awesome deals out there, and it is just the time to purchase," Santiago said. "September for me, in the past 10 years, has been slow, but it was my best September ever."
Dan Elsea, president of brokerage services for Real Estate One in Southfield, said the prices are evidence of heavy investor activity in Detroit.
"We are seeing that low end of the market sell quicker. If you have a $75,000 house in the city of Detroit, there are not a lot of buyers for it," Elsea said. "But if you have an $8,500 house, it sells very quickly."
He said that if investor activity is factored out, the true price depreciation in metro Detroit, excluding the city, is at a rate of 1% a month since last September.
Realcomp reported that 5,818 sales of houses and condos in the metro area were concluded during September, up 57% from 3,703 sales in the same month a year ago. The figures consist of closed sales reported by Realtors who subscribe to the service.
More than 37% of the September sales in the metro area were foreclosures, according to Karen Kage, Realcomp president.
But have we hit bottom yet?
"It is near impossible for me to say we are near done," Kage said.
Wayne County sales were up 73%, to 2,278, from 1,320 in September 2007; Oakland County sales rose 51%, from 941 to 1,422; Macomb County sales were up 58%, from 478 to 754, and Livingston County sales were up 45%, from 138 to 200.
And pending sales in September were up 75%, to 7,832 from 4,472 in September 2007. Pending sales are those with signed purchase agreements that have not closed.
With the credit crunch and falling prices, more pending deals are falling apart at the closing table. In September, 1,265 properties went back on the market that were either pending or withdrawn from the market. That compares with 732 properties put back on the market in September 2007, Kage said.
"It's not the best news ever," Kage said of the falling sales prices. "We have said all along that until we weed out some of the inventory, we will not see prices rise."
Realcomp also reported that housing inventory in metro Detroit dropped 16%, to 63,453 homes and condominiums on the market, as compared with 75,932 listings in September 2007. That's a 10.9-month supply at the current sales pace, far above a normal market of a three- to six-month supply.
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