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Friday, August 14, 2009

Bottoms UP! 2nd Quarter Real Estate Market Update

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June continued to show more positive market signs. Nothing that is earth shattering, values are still declining, but at a slowing rate and the number of home sales are still rising. In most Wayne County suburbs, the properties under $75,000 are competing in what is now a balanced real estate market, with indications that there is a supply of no more than six months of inventory at the current rate of sales. The same trends continue with strong under $100,000 activity, and even some good signs in the over $100,000 market. You will notice that in many markets the median sale price actually rose in June vs. June of 08. As is sometimes the problem of using median prices, this does not reflect an increase in home values, but a shift in the type (value) of homes purchased. With home prices at such great values and lower priced homes less plentiful, buyers are shifting up to higher prices (more value for the $) within each price category. The lure of a former $250,000 home for $160,000 is too great to pass up. Which should speak volumes to those of you who have been toying with the idea of buying up, but hate the thought of taking a loss on your current home. It may also reflect some of the market watchers and upper end buyers who were holding back, beginning to see this trend and dip their toes in the real estate waters.

It is interesting to note that early last year, as foreclosures blossomed, it was the "bribe" of really great bank deals that drew most every buyer that could buy into the market. Now, with bank owned homes becoming a smaller percentage of sales, the buyers are still in the market, meaning the non-bank homes have hit that magic "great deal" level as well. In fact, we are experiencing in the range of 10 - 20 multiple offers on aggressively priced inventory that will ultimately sell for 150% of asking price. That is a solid sign of a market bottom. Bank-owned properties will begin to rise up again, most likely in the fall and first quarter of 2010, but a rising economic base will help as an offset. Along with this rising economic base, interest rates will increase, effectively deflating the equity gain in the property. Hence, the bottom of the market.

All said, Sellers still need to price based on a declining market (i.e., below whatever sold last and well below current comparable listings) but buyers, particularly under $100,000 will need to keep on their toes, the inventory of "best bargains" is beginning to shrink. Sellers in this range will get the highest price possible by literally from lowest to highest, addressing their competitors and chosing the price at which their house is the best for the best price.

For purchasers out there or those who are entertaining making a move, but have had reservations about job security; there is a Job Loss Protection program available. A buyers should request the program on the homes they bid on, as it provides them with up to six months mortgage payments, should they become unemployed in the first two years of ownership. It's a fanatastic tool for sellers to set there home apart from the competition by offering it as a marketing incentive. Contact me if you would like more information on the Job Loss Mortgage Protection Program.

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