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Metro Detroit Home Sales Were Up 13% in February

By Greta Guest, Detroit Free Press

Metro Detroit home sales were up 13% in February and median sales prices were up as well, according to data released this today by Realcomp.

While it’s good news for the market this month, things haven’t returned to normal, said Karen Kage, CEO of Realcomp, the Farmington Hills-based multiple listing service.

The surge was caused by continued low inventories in the market that draws multiple offers to some houses for sale. And despite record low interest rates for mortgages, cash sales accounted for 53.7% of all sales last month.

“We’re not seeing the banks so eager to loan. That has to change,” she said. “We need to see the banks loaning money because that’s what’s going to get those private sales moving and bringing in the inventory.”

The median sales price in Oakland, Wayne, Livingston and Macomb counties last month was $58,000, up 5.7% from $54,850 a year ago.

The inventory of homes for sale in Realcomp’s coverage area including Metro Detroit and the Thumb fell 18.4% to 26,670 in February, compared to 32,695 in February 2011.

“We need to see those inventory numbers come up or it will be difficult to maintain that increase in sales,” Kage said.

Deborah Ronayne, a Realtor with Keller Williams in Northville, said low inventories have some of her buyers waiting for up to a year for the right house to be listed for sale. That’s a key driver for up to a 5% increase in sales prices last month in the Plymouth, Northville and Novi areas, she said.

“I continue to be strapped for listings,” Ronayne said. “Sometimes I am looking for people to sell even if they don’t know they want to sell. The minute I put something on the market, it’s just crazy.”

She listed a Farmington Hills home for $450,000 that drew eight showings and three offers in a matter of days. To ensure it closes, the buyer has offered to pay $15,000 in cash if the home doesn’t appraise for the full amount.

“My seller is still good if the appraisal comes in at $435,000,” she said.

Keeping the market from a full rebound is the continued supply of foreclosures and the shadow inventory of those properties taken back by the bank but that have not been listed for sale, she said.

“This whole distressed market is just pulling things down,” Ronayne said. “What concerns me is the number of homeowners falling into negative equity.”

Nearly 38% of the houses on the market for sale through February were identified as foreclosures or short sales, Realcomp.

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