The Fall starts the seasonal slow down for home sales so we can expect fewer multiple offers. We will still see the vast majority of homes (over 85%) sell within 90 days or less. For Buyers in a bidding war, our rule of thumb has been, “as long as the offer is at or below the peak 2005 value, the overbid is a safe bet.”
I have included two charts, Comerica’s local economic trend and the latest Case-Shiller value trend. Both show good news for housing and our local economy.
The Comerica Michigan Economic Activity Index continues to show strong growth through this summer, surpassing the prior 2007/08 high points. This represents the fuel for sustaining our local housing growth trends.
Case-Shiller shows Detroit with one of the highest year-over-year value growth rates. Although we are the only major city still below our 2000 value baseline, that is heavily influenced by the decline in values for the city of Detroit (the good news is city values are rising quickly again). The typical Southeast Michigan market is at or above 2000 values.
The area around Milford that I tend to focus upon has done a bit better than the regional numbers would indicate, but the trends are similar. Our area is probably back to about 2004 levels for prices, still below the peak but better than the harder hit areas like Detroit, Ypsilanti and Pontiac. Home values are up in this area anywhere from 16 – 20% year-over-year, but remember that they are starting back up from a drop of anywhere from 30 to 40% in value, so it will take more time to recoup the paper losses that occurred. It is important that you get an updated market value for your home if you are thinking about selling. Things are changing too fast to rely on an old number, where the term “old” means 2-3 months ago or longer.