Kevin Cristbrook didn’t have to list a 5,200-square-foot home in Birmingham’s Quarton Lake Estates subdivision before it sold for $1.5 million in February.
Similarly, a $465,000 Birmingham house he was selling near Lincoln Street and Adams Road had 17 showings and two offers in its first 36 hours on the market.
The associate broker for Birmingham-based Coldwell Banker Weir Manuel said those stories and others demonstrate just how far the housing market, particularly in metro Detroit’s most affluent suburbs, has come since its peak in 2003 and subsequent crash in 2007.
Industry experts point to gains made in the past few years — including in the number of sales, the average price per square foot and how quickly the houses are scooped off the market — as positive indications for metro Detroit real estate for the balance of this year.
“If you go back to 2007-08, when the Big 3 and tier ones were talking about layoffs, it didn’t just scare a few people — it scared the entire employment population,” said Dan Elsea, president of brokerage services forReal Estate One Inc. in Southfield. “There was a 10 percent reduction in the staff of Chrysler, but 100 percent of Chrysler stopped buying.”
Today, fewer move-in ready homes are available, consumer confidence has rebounded and buyers are taking advantage of attractive interest rates, Cristbrook and other brokers said, leading to an improved housing market.
The dearth of move-in ready homes is the result of underwater mortgages causing homeowners to keep their homes off the market, a better economic climate leading to more jobs and people not making as many improvements on their homes since the 2000 recession, said Randy Repicky, branch manager for Johnstone & Johnstone Realtors in Grosse Pointe Farms.
The need for speed
“If you wait until the next day (to make an offer on a home), it won’t even be around in many cases. As soon as they hit, you better be on your game for it to work,” Repicky said.
Compared to 2011, it took 2 1/2 fewer weeks to sell a home in 2012, going from 127 days to 109 days in the Grosse Pointe communities, according to data provided by Farmington Hills-based Realcomp II Ltd. and others.
A $449,000 home Johnstone & Johnstone listed on March 22 sold 18 hours after five showings, Repicky said.
It’s not just Grosse Pointe, however, where buying a home is becoming more like the Kentucky Derby than an Olympic dressage event.
Homes sold last year in Bloomfield Hills and Bloomfield Township more than a month faster than they did in 2011, and two weeks faster in Ann Arbor.
With more homes on the market in years past than today, buyers could bide their time and wait for the perfect home to come to them.
That’s not the case now.
Maureen Francis, an associate broker with SKBK Sotheby’s International Realty Inc. in Birmingham, said strong demand after the real estate crash is fueling quicker home sales, particularly among move-in ready homes.
“If it’s in a good condition and a desirable house, they are going quickly,” she said.
Among Metro Detroit’s most affluent suburbs, the only communities in which homes didn’t sell faster last year than in 2011 were Northville, where houses spent eight days longer waiting to be sold last year than 2011, and Novi, where houses spent an average of 83 days on the market both years.
Prices up, but not like ’03
A shortage of available, move-in ready homes is helping to drive up the purchase prices, brokers said.
Those homes tend to attract more interest and more than one offer, said Tim Ross, president and CEO of Royal Oak-based Ross Mortgage Corp.
“It’s a simple supply-and-demand equation that puts upward pressure on sales prices,” he said.
That’s coming to fruition in Detroit’s affluent suburbs as median sales prices, and average price per square foot for those sales, were up across the board last year over 2011 levels, according to Realcomp.
Median sales prices in Birmingham increased by more than 13 percent last year from $315,000 in 2011 to $362,500, while those median prices in Rochester Hills and West Bloomfield shot up by more than 12 percent.
But there’s still a long way to go.
In the majority of the suburbs, the median sales price last year was more than 20 percent less than it was in 2003, the peak of the market.
For example, the average West Bloomfield home sold for $288,250 in 2003; last year, the average home sold for $205,000, a decline of nearly 29 percent.
Pricey home sales increase
Nearly 1,300 metro Detroit homes in the $400,000 to $1 million price range sold in 2011, while 1,710 sold in 2012, representing a 31.7 percent increase. That upward trend continued for homes in the $1 million to $2 million range, with 89 sold in 2011 and 126 sold last year, according to Realcomp.
“We are finding quite a bit of activity in seven-figure homes,” said Kelly Sweeney, CEO of Coldwell Banker Weir Manuel. “We sold eight in January — more than the whole darn year” of 2012.
That increase is in part due to buyers taking advantage of better home prices, said Karen Kage, CEO of Realcomp.
“The $400,000 homes are probably homes that would not be $400,000” in years past, Kage said. “They would be considerably more than that. (Buyers) are looking at that as a really good opportunity to take advantage of the market.”
It’s not just the posh suburbs where housing market gains are being seen.
There was a 4.9 percent bump in Oakland County home sales from 2011 to 2012, going from 17,394 to 18,254 last year. Those homes sold, on average, 17.4 days faster last year than in 2011, and for 18.5 percent more than they did two years ago.
Last year in Wayne County, there were 22,031 home sales, compared to 21,269 in 2011 — a 3.6 percent increase. Wayne County houses sold for 16.8 percent more than they did in 2011 last year and nearly five days quicker.
And in Macomb County, home sales increased by 12.1 percent, going from 10,415 in 2011 to 11,677 in 2012. Macomb houses sold 14.5 days faster in 2012 than in 2011, and for 12.7 percent more.
“Basically every price point in the market is active and strong as I’ve seen it in 30 years in the business,” Elsea said.
Kirk Pinho, Crain’s Detroit Business.