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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, we need to be educating people that now is the time to sell and buy up. The best part is that they don't have to take our word for it. We can share this message with them from one of the most reliable sources there is: Business Weeks’ Marc Roth; "If You Don't Buy a House Now, You're Stupid Or Broke!"

Here's an easily understood illustration we can use to communicate what this means to our potential customers:

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 short sale. 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.

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