Posted by: Brian Powers | June 29, 2009

Home Sales Improving

Tighter inventory, rise in median price create ‘happy medium’

Sunday, June 28, 2009

By Dave Jones, Macomb Daily Special Writer

A housing market that’s seen home values plummet and foreclosures surge is beginning to show signs of leveling off.

Macomb County home sales rose 11.4 percent in May 2009 compared with May 2008, with 783 sales reported last month, 80 more than last year, according to a report released by the multiple listing service firm Realcomp.

Also, the number of pending sales has risen 39.4 percent in the same time.

Although not a clear-cut sign the housing market has righted itself, the report indicates it’s a step in the right direction.

“We’ve seen an increase over every month last year,” said Karen Kage, CEO of Realcomp. “And we’re seeing less of a drop in the median price and inventory has dropped, driving prices up.”

Barb Gerlach, a Macomb-area Century 21 Realtor, said her area closures have increased significantly from a year ago.

“Sales are definitely up,” she said. “My sales are up about 5 percent from last year.”

In addition to the sales increase, the report shows a 23.8 percent decrease in available inventory.

This, Kage said, means the market is heading toward a “happy medium” between sales and inventory.

“There is a direct connection in the reduction in inventory and the rise in sales,” she said. “We anticipate that as the sales rise, the inventory decreases. And we’ll continue to see a rise in sales based on the pending sales.”

Realcomp’s analysis also shows an overall increase in sales in the metropolitan Detroit area, up 12.6 percent since this time last year and 26.9 percent from two years ago.

St. Clair County experienced the largest increase with a 42.6 percent rise in sales, while Wayne County — up 15.7 percent — saw the largest number of sales with 325 more closures since last summer.

Kage said such an increase in an otherwise weak housing market is possible due to a drop in the median price of homes, which is down 39 percent from last year.

“Now more people can afford a home,” she said. “We don’t see the reduction of the median price as great news, but it’s not necessarily bad news.”

With more people looking to buy — many in the market because of depressed prices — and sales inching upward, the laws of supply and demand kicked in, resulting in a modest rise in prices.

However, Kage said, the numbers don’t necessarily mean the market has stabilized.

“This will take time to bounce back,” she said, “and to say when is hard to say. We’ve never been here before — we have nothing to compare it to.”


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