I’ve been watching the statistics for Foreclosures and Short Sales in the Grand Rapids, MI area pretty closely since the real estate board began to track the numbers in 2007.
Recently, there have been some trends that I initially felt were alarming.
September and October sales numbers have seemed to mirror the wild roller coaster ride that we have witnessed on Wall Street in recent days.
In September, the percentage of homes sold in distress as either Foreclosures or Short Sales jumped to almost 52% and represented almost 41% of the Total Dollar Volume of Home Sales for the Grand Rapids Association of Realtors.
The numbers didn’t get prettier in October, 2008. At the last check, the percentage of homes sold in distress is now at almost 62% and represents almost 45% of the total dollar volume which by the way was 33 Million dollars less in September than the recorded sales volume in August.
But, in the midst of these seemingly dire numbers, I am witnessing an amazing phenomenon. It’s the RISE of Multiple Offers on properties. Yes, it’s true that many homes are simply sitting there with absolutely NO activity…often for months or years. But, there are several homes that our agents have Sold recently and homes that our Buyer Clients have made bids on which had MULTIPLE OFFERS. In some cases as many as 3 or 4!
What’s going on?
Well, here’s my take. I think that much of the inventory on the market right now in Grand Rapids, MI is over-priced. By this, I am referring to the pricing that the Market has dictated it is willing to pay for the product which in this case is a home. Over-pricing is a phenomenon which can be brutal to witness if you are a homeowner who needs a certain dollar amount from a home right now. In this market, needs are simply not the criteria which govern the sale.
Best Value Deals…
Today’s home sales are primarily Best Value Deals. Homes that are priced competitively and where home owners have equity will Sell. Homes that are in distress will Sell. Homes that are Bargain Basement Deals will Sell. This is NOT the market for everyone, and home owners should recognize that the total volume of dollars that I mentioned before indicates that home prices are still dropping overall.
However, I think that we’re starting to scrape the bottom. The projections nationwide indicate that there will be about a Million homes in Foreclosure and for Sale by the end of the year. The good news is that the number of Foreclosure/Short Sale homes in the Grand Rapids area actually have stabilized and seem to be trending downward. We have to Sell the excess inventory of these homes for the market to stablize, so this is a very good thing.
In light of this, looking at the increase in the number of distress sales takes on a different perspective. As more of these homes move out, there will be fewer bargains and prices should gradually begin to increase. I’ll continue to watch the trends and report back to you the latest in the Grand Rapids real estate market place.
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