When I am traveling with my children, the phrase "Are We There Yet" is muttered several times during the trip. This question is asked, just as it has been obligingly asked for hundred maybe thousands of years. However, now I am hearing it from my clients, "Are We There Yet?" Are we at the bottom of the market yet? From my vantage point this summer could be defined as the season we hit the bottom for this Real Estate Market. I am seeing 3-12 offers per house on Bank Owned properties. This tells me that there are buyers out there.. they are just looking for bargains. Who can blame them with as many deals as there are on the market. There are three streams joining together to create the RIVER that is washing away the value of Real Estate in this Michigan market:
1. Auto industry uncertainty and decline. Job loss = population decrease = vacant properties = lower sales prices. It's that simple. High gas prices are compounding this issue.
2. Mortgage Crisis. The few buyers that are in the market are finding it very difficult to get approval for a mortgage.
3. High Inventory of homes. The record number of Bank Owned foreclosed homes are causing a bidding war to the downside as banks compete with other banks to rid themselves of their inventory. Banks have no magic number as many homeowners do.. as to what they MUST sell their home for. To the banks the home is just one of hundreds in a portfolio that must be liquidated at all costs.
If one of these streams can be dammed, we will see improvement. If all three can be stopped, a true rebound will start immediately. With the good news oil prices dropping along with commodities, hopefully we will see the first stream improve. The other two may take longer, but there is hope that this may be our exit and we may be there and not know it yet.