Interior designer refashions unsold house into office
National sales of existing homes rose 2% in May as the median sales prices dropped, but it doesn't mean the beleaguered housing market is staging a rebound.
In metro Detroit, sales rose 12.7% to 5,288 in May from 4,691 in May 2007, according to data from Realcomp, a multiple listing service based in Farmington Hills. The data represent sales handled by Realtors that closed in the month.
But when looking at sales recorded at the county level when deeds are filed, home sales were down 32% to 590 in Macomb County in May when compared with May 2007. And sales fell 21% to 956 in Oakland County compared with a year ago. Wayne County figures for May were not available.
U.S. sales of single-family homes, townhomes, condominiums and co-ops increased by 2% to a seasonally adjusted annual rate of 4.99 million units in May from 4.89 million in April, the National Association of Realtors reported Thursday.
That's nearly 16% below the 5.93-million sales pace registered in May 2007.
And the market isn't expected to pick up for a while.
The market realities have more people finding creative ways to work around the lack of buyers, particularly in hard-hit areas like Detroit.
Carole Harris, an interior designer and artist, was saddled with her 1,800-square-foot Arts and Crafts style home in Detroit's New Center after moving to a condo nearby with her husband.
The couple put the four-bedroom, 1 1/2 -bath house on the market in October 2005, just as the market started slowing.
She had been renting a loft in Hamtramck for her office.
"It became clear the market wasn't getting better. I had an epiphany and realized I had a house and didn't have to pay for office space," Harris said Thursday.
Harris, who has done interior design work for the MGM Grand Detroit casino and the Book Cadillac, set up shop in her former home of 22 years in December.
"I'd still like to sell it. It put a big dent in our retirement plans, but we made the best of it," she said.
U.S. prices fall 6.3%
The national median existing-home price for all housing types was $208,600 in May, down 6.3% from a year ago when the median was $222,700.
Lawrence Yun, chief economist for the National Association of Realtors, said there's still a lot of inventory in the market that could take months to clear.
"Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets," Yun said.
In metro Detroit, 36% of total sales in May were on foreclosed properties, according to Realcomp. But in the city of Detroit, nearly 62% of sales of existing homes in May were foreclosures.
Total housing inventory at the end of May fell 1.4% to 4.49 million existing homes for sale, which represents a 10.8-month supply at the current sales pace, down from an 11.2-month supply in April. A three- to six-month supply is considered normal.
"Keep in mind that the volume of home sales is the primary driver of economic activity that is tied to housing," Yun said. "It'd be premature to say the improvement marks a turnaround."
Single-family home sales rose 1.6% to a seasonally adjusted annual rate of 4.41 million in May from 4.34 million in April, but are 14.5% below the 5.16-million-unit pace in May 2007. The median existing single-family home price was $206,700 in May, which is 6.8% below that period a year ago.