Real Estate Market

Despite National Trends, Prices Continue To Fall In Detroit

The National Association of REALTORS® has published the results of its quarterly sales survey and found that the median home price continues to rise in most metropolitan areas. The median is a typical market price – meaning half of all homes sold for more, and half of all homes sold for less.

Lawrence Yun, NAR chief economist, said the data underscores the fact that all real estate is local. “Some metro areas are hot, while others are experiencing localized problems,” he said.

The November sales statistics for the Metro Detroit area will give us a better idea of our local market:

Sale prices in Wayne County continued to drop in November 2007 when compared with November 2006. The average sales price was down 22% this November, while the median price dropped a dramatic 54%. The average market times remained the same from last year to this year.

Wayne County	Average Sale Price	Median Sale Price	Highest Sale Price	Average Days On Market
November 2007	$82,639	$40,000	$2,100,000	104
November 2006	$106,615	$86,750	$940,000	104

Oakland County market activity continued to follow a similar as Wayne county in November 2007. The average and median sales prices both decreased 21% to $150,613 and $133,000, respectively.

Oakland County	Average Sale Price	Median Sale Price	Highest Sale Price	Average Days On Market
November 2007	$150,613	$133,000	$1,650,000	116
November 2006	$191,402	$168,500	$1,200,000	122

These statistics show that, as Yun said, all real estate is local. But it is also important to remember that the market changes from neighborhood to neighborhood and from month to month. To get the latest information on Metro Detroit real estate, please call me at 248-348-1500 or visit TheMarkerTeam.com. To receive a complimentary home value analysis, please visit MetroDetroitPropertyValues.com.

Statistics provided by 2006 Realcomp II Ltd. and are deemed reliable but not guaranteed.

FHA: Old Mortgage Program Finding New Life

The sky is falling, the sky is falling! Or so you would think if you listened to all the news coverage about the mortgage market. The news is filled with reports of declining home values, resetting adjustable-rate mortgages and people feeling the pinch of tightened credit.

However, despite the doom and gloom, much of the media haven’t reported on the proverbial silver linings in the storm clouds. One of the bright spots is the resurgence in popularity of a loan program that has been around since the 1930s -- the Federal Housing Administration (FHA) loan.

Historically used almost exclusively by consumers to purchase their first home because of its low down payment requirements and competitive rates, FHA loans are making a comeback and quickly gaining prominence among those looking to refinance as well.

“A large number of people are really benefiting from the FHA loan program, and what is most interesting is many of them have just recently been turned down for more traditional conventional loans,” says Bob Walters, chief economist for Quicken Loans, one of the nation’s largest mortgage lenders. “This program isn’t the answer for everyone, but we have found that it can be a very viable option for many people.”

According to Walters, FHA loans are being used by consumers for cash-out refinancings, or to consolidate debt up to 95 percent of the home’s value -- moves that are extremely difficult and often not financially practical to make with current conventional lending guidelines.

“Through the first half of 2007, homeowners had no problem making their mortgages work for them. However, since that time, tighter lending guidelines have resulted in many loan programs being taken off the table. Fortunately, FHA loans can fill some of the void. When used responsibly, FHA loans can provide much-needed relief. Every day, we help clients purchase homes, pay off medical expenses, eliminate high-interest credit card debt and generally improve their financial position through the FHA program,” Walters adds.

Consumers are also finding that in some instances, FHA loans can close very quickly, in less than 14 business days in some cases.

“The bottom line is that FHA loans are an option for many folks, but not for everyone. It is very important that every homeowner consult with a reputable lender who will listen to their needs and goals, and then suggest the best mortgage for them. In some cases it could be an FHA loan, and in others it may be a conventional fixed or adjustable rate mortgage. What is important is that the loan actually works for the consumer and puts them in the best possible financial position,” Walters concludes. (ARA)

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