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Wednesday, December 16, 2009

December 2009 Market Update

The bounce is happening! November displayed a marked increase in number of homes pending in all counties with a range of increases from 34%-110% in the under $100,000 bracket and a 20%-54% increase in the over $100,000 category. The only decline in pending inventory was seen in the under $100,000 bracket in the city of Detroit where all of the low hanging fruit has been purchased and the inventory remaining is not as attractively priced. However, in the over $100,000 price range the city of Detroit has experienced an increase in the number of pending properties by 15%.

Within the under $100,000 price range, we’ve also seen an increase in the median sale price from 18%-47% in all counties except in Livingston, which reported a marginal decrease of 4%. Keep in mind that the increase in median price does not necessarily reflect an increase in the value of individual properties. This increase could be easily explained by the fact that the lower priced inventory no longer exists thus causing more recent sales to reflect the higher median price. In the over $100,000 range, the median sales price was down across the board ranging from (-)1%-9%.

In summary, and in the wise words of Business Weeks’ Marc Roth; "If You Don't Buy a House Now, You're Stupid Or Broke!"

In other words, if you are a person who is purchasing up, now is the time to get the most out of what you are selling and the best deal on what you are purchasing at hte same time.

Allow me to illustrate:

Current Home - was = $150,000 now = $100,000 Loss = $50,000
New Home - was = $300,000 now = $180,000 Gain = $120,000
Total gain = $70,000

True, some of us can't find a way to pay off the $50,000, but many of us are suffering from reduced income that would qualify us for a loan modification or a short sale. A short sale is when a lender allows a homeowner to sell the home for less than what is owed on the mortgage because of their changed circumstances. The only criteria to qualify for a short sale is to have experienced some change that has created a hardship. That hardship, in most cases is financial, but can also be life circumstances such as an illness, increased family size, divorce or separation, etc. Those who are able to do a short sale may then secure a new FHA mortgage on the $180,000 home or more. If you are curious as to how a short sale can be orchestrated to allow for a new home purchase, contact me directly and I will be happy to assist you in any way I can.

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