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Sunday, November 18, 2012
Home sales on rise in Macomb County!
Home sales on rise in Macomb County
By Molly Tippen For The Macomb Daily
Saturday, November 17,2012
(Macomb Daily staff photo by David Dalton) A home is for sale in the Beach Knoll Drive in the Woodberry Estates Subdivision in Shelby Township. October marked the 10th straight month of increased home sales in Macomb County.
October may not have brought many trick or treaters to Macomb County porches, but it brought something better to residents considering placing their home on the market: the 10th straight month of increased home sales.
The level of home sales in Macomb County increased by 26.1 percent in October 2012, with 1,068 units changing hands, versus 847 the previous year. The increase outpaced the metropolitan Detroit area sales increase of 17 percent; Oakland County’s increase of 12.8 percent; and Wayne County’s increase of 13.8 percent, according to a report by Farmington Hills-based Realcomp, which tracks home sales in Michigan.
And the October surprise didn’t end there. According to report, the county’s median sales price also increased to $82,000 from $70,000 — 17.1 percent higher than it was in October 2011.
Karen Kage, the CEO of Realcomp, said the increases are driven by record-low inventory levels, which are converting the buyer’s market of the last four years into a seller’s market.
“It’s always hard to say where the market is going because what we have been through for the last four years has never occurred before,” she said. “Low inventory levels allow homes to appraise higher, and sellers will continue to get multiple offers on their homes.
“This will continue as long as we don’t get flooded with available inventory,” she said.
Hank Mendez, the owner/broker of Weichert Realtors Excel in Shelby Township, said the inventory levels and low interest rates are luring people back into the market.
“It’s hot, hot, hot,” he said. “For the last 12 months we’ve been seeing many homes get multiple offers; sometimes we end up with a bidding war, which can be great for the seller, but frustrating for the buyer.”
Foreclosure’s shadow The number of sales of foreclosed homes increased in Macomb County by 6.5 percent; 345 units sold in October 2012. In October 2011, 324 units were sold.
Though the pace of foreclosures has improved in southeast Michigan, Realtors are concerned that a “shadow inventory” that may or may not exist could derail what has been a year of increased activity in the housing market.
“We’ve been hearing about a shadow inventory for about four years now,” Kage said. “If it exists, I wish the banks would release some of them, because we could use some inventory.”
Mendez has a theory about a second wave of foreclosures.
“I think the banks learned they hurt the market when they flooded it with foreclosures all at once,” he said. “I think the inventory will dribble out; I think we’ll see more short sales.”
For sellers, it would be good if those foreclosures — if they exist — stay under wraps. Mendez said that some of his buyers are getting repeatedly outbid.
“This is not only causing home sale prices to increase, but it’s getting several buyers involved in bidding wars,” he said. “Some people are getting rejected four and five times; in some transactions, there are only two parties walking away happy — they buyer and most of all, the seller.”
One aspect that would greatly aid the area’s housing market is if lenders expanded their services, Kage said.
“Our data indicated that 50 percent of all home sales are cash transactions without a mortgage,” she said. “Interest rates are low, and if more people could take out a mortgage, we’d see more activity.”
Why Macomb County? As the market recovers from the effects of the Great Recession, Macomb County seems to be reaping the rewards faster than its neighboring counties, according to the Realcomp report.
Bill Frohriep, associate broker and sales manager of Century 21 Town & Country in Clinton Township, said Macomb’s sales are buoyed by affordability.
“Macomb is a great place to live, and it’s affordable with great services and schools,” he said. “My thought is (the county) has high-quality housing stock, and there’s something for all buyers.”
Frohriep said the sales may not be up to 2005 or 2006 levels, but the stage is being set for more increases.
“There is no house that is not selling unless it is not priced right, or it is not marketed properly,” he said. “Even homes that have issues ... there are people with the resources to fix them up, as long as the price is right.”
Don Morandini, the deputy director of Planning and Economic Development for the county, said the fact that housing sales are finally turning around is a sign of recovery in Macomb County.
“The basic economic concept of supply and demand says that if supply is low, demand will increase,” he said. “We hope this is the beginning of new trends in residential construction, which also brings jobs to the area.”
“From our perspective, we want developers to want to build new subdivisions here,” he said. “But for that to happen, people will need to be able to get loans, and developers will need to be able to tap into capital.
“We just hope the banks will fund these projects when the time comes,” Morandini said.