Beat The Glut!

To show you how far down home prices have gone in Metro Detroit after years of steadily rising prices, most good agents are now quoting 2001 figures when they do a competitive market analysis (CMA) on a home. Several weeks ago, I did a CMA in my Troy subdivision and the couple who owned the home, said "we'd love to list our home at the 2001 price." Well, not really and here's why.....

They lived in a medium sized ranch that sits on a main street. Living on a main street means you discount the value of the home 5 to 10% over similar homes in the sub that are not on a main street. In 2004, this home would have gotten an asking price of $182,500 with that main street discount included, but in 2001 it's selling price would have been about $160,000. Home prices in Troy rose about 15% from 2001 to 2004. I quoted them what I felt was a generous listing price of $169,900. They have since listed with another broker for $176,500.

Another point for those waiting before listing, hoping for a return to pre 2005 prices, don't hold your breath! That wait could last 4 or 5 years before market prices rebound. The current Southeastern Michigan housing market appears to be steadying after 2 solid years of declines, but it's not ready to go up and the big reason is the housing glut. 75,000 homes on the market in Metro Detroit speaks for itself. There are buyers out there, but with 75,000 homes to choose from, compared to around 25,000 available in Augusts prior to 2005, buyers can be very picky. The best thing a homeowner can do right now, fix or update your home so when the time comes to market it, it will be appealing enough to "beat the glut."