The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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From: TH	12/4/2004 4:46:50 PM
	Read Replies (2) of 306849

Interesting chat today with two very good realtors in the Detroit area (ok, suburbs damnit!). They each have 25+ years experience and one ran the largest office in the area until he opened his own business in 03. Here are some comments. -Market is DEAD right now and might pick up in the spring. Even if it picks up, its going to be a flat market at best. -Sellers are getting stupid. They think comps for an area on square feet are all that matters. The game from 2003 and the first half of 2004 was about just getting a place in the "right" area. Now buyers are looking hard at value and the quality of upgrades. This is making problems for the realtor, as many people have adopted unrealistic views of "value" and they end up pricing at a point where the house won't move for 3-6 months, or at all at this "inflated" value. -$300 square foot in my little city was the TIPPY top, and now you are only going to get $250 if you have very good upgrades. Again, sellers are unrealistic and because properties in 03 and 04 sold at these levels they are slow to adjust their price to reflect the market. This will play out in 05 and the market will get some balance between unrealistic asking price and a price that move the house in a reasonable amount of time. -Appraisals are coming in the same as the previous year. This is a surprise to some people who have been doing the refi and extracting equity. It is not very common, but he knows of appraisals coming in slightly lower. There is a chance this trend could increase next year, and it certainly will if the automakers announce more job cuts. -There are no "good" jobs in Detroit. Period. He does not see anywhere near the historic norm for transplant sales. People are not moving here on the company dime. -I asked him about the value of a property on my own street that has been on the market for five months. They told me that houses on my street used to sell in 30 seconds (true, as the longest I had ever seen a sign before 2004 was about a month), but now I should expect 90 days if I wanted the mid to upper end of the range. They told me that this house sitting for five months was WAY overvalued in todays market. It would have sold in a month at that price in early 04, but no chance in hell of it moving now at that price. FWIW TH

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