Detroit's Housing Market Still Shaky, But May Be Improving
While the Detroit real estate market showed steadily-dropping home prices for the fourth straight month in December, the market may be slowly improving overall.
Detroit, at -3.8 percent, had the most drastic decline in home prices of any major city from November to December. Declines were seen in 18 of the 20 U.S. cities tracked in the Standard & Poor's/Case-Shiller home-price index.
The drop is attributed in part to a seasonal slowdown of home sales in fall and winter, though in nearly all markets prices have dropped from the same month in the prior year.
The index does have some good news for Detroit: It's the only city to show a year-over-year increase, with home prices up 0.5 percent since December 2010.
A report earlier this month showed a similar pattern for Detroit. Home prices declined from October to November 2011, but increased from the same month in 2010.
Things aren't looking quite so gloomy for sellers, as more homes and condos were sold in Detroit in 2011 than 2010. Data from Realcomp, a realtor-owned multiple listing service, shows an 11.4 increase in home and condo sales in Detroit from 2010 to 2011. But it's still a small number -- 429 homes tracked by the service sold in 2011 compared to 385 in 2010.
But Realcomp CEO Karen Kage noted a positive shift in metro Detroit's housing market, both in the number of properties sold and median sale prices.
"We're seeing positive signs of the market making a nice improvement," she said. "It's just really slow, which is not a bad thing. We're still very optimistic."
Month-to-month decreases noted in the Standard & Poor's index don't reflect others opinions of the Detroit market as a whole. The city was listed as an improving market in February's National Association of Home Builders/First American Improving Markets Index, and a Clear Capital report showed the market steadying at a slow rate over the last two years.
And declining prices are causing some with deeper pockets to make buys -- across Oakland, Macomb and Wayne counties, homes priced at more than $500,000 had the biggest increase in sales.
One thing Kage finds surprising is realtors' frequent complaint: There are now approximately 27,000 properties available in the area, down from 90,000 in 2007. That makes for a market-wide lack of inventory, which could be a positive sign.
"I never thought I'd say that again, never," Kage said.