People can buy foreclosure houses in Detroit for less than $30,000 as the still high number of foreclosures in the city kept pulling down prices.
In the July-September quarter, foreclosure postings in the Detroit metro area rose by more than 7 percent from the previous quarter and by nearly two percent from the same quarter in 2008.
Total foreclosure postings in the Detroit area during the quarter represented about 1.2 percent of all households in the area.
But real estate agents in Detroit are now hoping that housing market recovery will soon start in the city as the inventory of unsold homes began inching towards the normal level.
In the July-September quarter, the inventory of homes for sale in Detroit was worth 8.4 months of supply, which is closer to the six-month supply considered normal in most housing markets and which is much lower than the 13.4-month worth of supply for the same three-month period in 2008.
According to Southfield brokerage president Dan Elsea, the supply of unsold homes in the Detroit area could have been higher if banks did not hold off some of their foreclosure actions and if government agencies did not carry out foreclosure prevention programs.
Despite the decline in supply of homes for sale in the city, people can still buy foreclosure houses at bargain prices. Many are priced lower than $30,000, pulling down the prices of non-distressed homes to levels lower than $100,000.
Over the past 12 months, according to local realtors, owners of non-distressed homes offered at $160,000 have been discounting their prices several times, finally offering them at lower than $100,000. The price pressure from bargain-priced foreclosures has been heavily pushing down prices of non-foreclosed properties.
Among the counties covered by the Detroit metro area, Wayne County had the lowest level of housing inventory during the July-September quarter with its supply worth 7.2 months. Livingston and Oakland had the highest levels with their supply of 10.9 months and 9.5 months, respectively.
Macomb County had the second lowest level with 8.3 months of supply, followed by Washtenaw, which had a supply level of 9.1 months.
The Detroit area had an unsold inventory of 34,657 housing units, down from 49,742 units in the second quarter. These units are expected by local realtors to be bought by move-up buyers taking advantage of the newly extended and expanded federal tax credit program and by people planning to buy foreclosure houses at bargain prices.
