Residential Real EstateHot Market: SE Michigan Surpasses the Psychological Pricing Barrier
When it comes to real estate, a paraphrase of the old saying, "The bigger they are, the harder they fall," could be, "The deeper the prices fall, the faster they recover." All across the country, pending sales -- the number of contracts written in any given 30 day period -- are on the rise in cities and regions where prices have hit what we call the "psychological pricing barrier."
This barrier is when the price hits the level that buyers realize value of homes have hit bottom or are near it. Such is the case for southeast Michigan -- near Detroit. Pending sales there have increased 26 percent over the same period last year, from about 5,400 to more than 6,800 this year.
Pending sales are the sign of future business, so homebuyers in that area should take note that the inventory is starting to slowly disappear -- and that"s a precursor to higher prices.
Sales have already begun to outpace last year"s levels in the region. April 2008 outsold last April by 15 percent. Realcomp II Ltd., is the multiple listing system in the region. The company"s CEO Karen Kage was quoted in the Oakland Business Review, saying "Inventory is high, and people are paying attention to that. At the same time, interest rates are still low, enticing buyers to come into the market."