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It looks like 2013 may be a better year for the Detroit housing market. In the first month of the year, all multiple-listing service sales rose by 9.4% from a year earlier, according to data from Realcomp.
This stands out in a market that suffered so much throughout the housing crisis, and in a market that the Obama Administration considers a struggling economy.
In the Obama administration’s monthly scorecard for January, the U.S. Department of Housing of Urban Development revealed that the administration’s efforts have helped nearly 100,000 Detroit households avoid foreclosure.
"Every foreclosure avoided has positive impacts for families, communities, and our economy," said Treasury Assistant Secretary for Financial Stability Tim Massad.
Additionally, an estimated $208 million has been provided for the city via HUD’s stabilization program in order to aid redevelopment and assist resident property purchases, the scorecard revealed.
The median sales price for all homes for sale jumped 27.1% from $63,000 to $80,091 year-over-year in January. The median sales growth varied from metro to metro, with some metros seeing as much as a 65% increase since last year, the Realcomp report showed.
It looks like buyer demand grew as the Detroit market continues to become healthier, with the average days on the market dropping from 89 to 81.
The true indicator of a market turnaround in Detroit, however, is the decline in foreclosure sales, which dropped 11.7% from last month to January 2012. Some metros saw a much larger drop of foreclosure sales, such as Grosse Pointe, whose foreclosure sales fell 40% year-over-year.
But despite the anticipated decrease in foreclosures in 2013, experts expect short sales to continue to climb as there are still a high percentage of underwater homeowners needing to sell this year.
"RealtyTrac data shows 47% of all homeowners with a mortgage are seriously underwater in Wayne County, 43% seriously underwater in Oakland County, and 41% underwater in Macomb. We already are seeing strong signs of short sales increasing in Detroit even while foreclosures decrease. In the third quarter of 2012, the metro had a 41% year-over-year increase in short sales of properties not in foreclosure," RealtyTrac Vice President Daren Blomquist told HousingWire.
Approximately 18% of the market inventory is comprised of short sale properties, while 13% is comprised of foreclosures. Overall, the on-market inventory dropped 21.8% from 27,389 to 21,423.
Despite its strong market turnaround, Detroit still has a way to go in terms of reaching the recovery experienced by the rest of the nation. As one of the hardest hit metros, Detroit is currently ranked no. 32 out of the 212 metro areas that RealtyTrac analyzes.
"In a sense, Detroit’s market is recovering at a faster pace than much of the rest of the nation, but it has a much longer road to full recovery than most other markets as well," added RealtyTrac’s Blomquist.
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