Thursday, March 31, 2011

Here and There, Financially Anyway!

Well, spring is upon us and the thoughts of buying a new home are entering peoples minds. There are some real bargains out there, especially with prices continuing to fall. I joke to people that I paid $72,000 for my home when I baught it in 1984 and if prices keep dropping like they have been, in a couple of years, my home will be worth......$72,000!

2 stories on this recently caught my eye. First, was the announcement in late February that home prices continued to fall in 2010, over 2009. As an example, between October 1, 2009 and September 30, 2010, the story said, home prices in Troy, fell another 7.5% over the figures they were priced at for the previous year. It was stunning, yet interesting reading. And those price falls were everywhere in southeast Michigan. No community escaped the price fall!

The second story was in the newspapers just the other day, predictions that no one knows when prices will stop dropping. Homes are now selling for the prices they were fetching in 1994! I would not call it a "free fall" but don't believe anyone who tells you the real estate market has "bottomed out." No one knows. Even I for the past year plus, have been telling people the market has hit bottom, but I was just going on what economists were predicting.

My best prediction now, we are seeing foreclosures and short sales selling for higher prices than they were a year or two ago, a sure sign that eventually, the foreclosure and short sale market will dry up, leaving room for the private sale home to creep back into the marketplace. However, my feeling is that the "drying up" of the "problem" homes won't be complete until the end of 2012 or midway thru 2013. But what do I know, I've been wrong, along with everyone else on this issue, for a year and a half!