Michigan real estate market update 2007

Michigan Real Estate Market Update, August 2007
So you want to know how long this bad real estate market is going to last in Michigan? I or anybody else can't accurately predicate that.

Here is what I know at this moment.
1.) Home prices are down anywhere from 20 to 30% off their highs of several years ago. I personally have helped clients buy homes that were less than 7 years old for 10% less than the original owner paid the builder. That is not even including what the original owner put into the landscaping, decks, window treatments and any upgrades after they moved in. My clients and I even bought one where the original owners finished the basement. The original owners have lost a lot of equity in the last few years not even including the real estate commissions they have to pay.
2.) It is not going to change within the next year because of these reasons.
a. Michigan has lost people to other states because of the automotive buyouts, Phizer, layoffs, and re-locations. That means less people to buy the same amount of homes.
b. There are more foreclosures on the horizon as there are thousands of adjustable rate mortgages that are going to adjust upward in the next year. How is somebody that has a $350,00 4.75% mortgage going to be able to afford their rate going up to 6.75%? They can for a while. But some people were banking on selling at a profit in 5 years. They can't sell the house for what they have in it right now. They may be able to survive with the large mortgage payment for a while, but at some point they will have to sell or lose the house. (if they can't afford the payment)
c. Banks have tightened up credit guidelines because of the foreclosure rates. What that means to the real estate market is that they have taken approximately 20% of the buyers (that could buy last year) out of the market. No more easy credit. That means less buyers for all these homes.
d. Because of the upcoming foreclosures prices will continue to drop as banks unload those homes. Are they always a bargain? See my how to buy bank foreclosures or are bank foreclosures a bargain? Or my article on how to buy a bargain

So the bottom line is why do you want to sell? Do you have to sell right now? Are you going to wait for the prices to come back? Can you wait for 5 to 10 years? That's how long it may take to get back to those high levels. If houses have lost 20% of their value from the high point and we only gain a 5% increase per year. That means a minimum of 4 years for it to return if we have a turnaround this year and we have 4 years of solid increases Do you think that is possible in the Michigan economy?

If you have more questions and would like to explore your options of buying or selling give me a call on my cell at (313) 310-9855 Selling tips or buying tips

Or go to my website www.russravary.com or search Michigan homes