$1 million-plus home sales hit record in metro Detroit

A red-hot auto industry, bullish stock market and steadily recovering home prices ignited the top end of the real estate market last year in suburban Detroit.

The number of home sales in the lofty $1 million-plus category hit a new tri-county high in 2013 as more C-suite executives moved up in property and out-of-staters transferred in for high-paying jobs.

There were 210 new and existing residences that sold for $1 million and above within Oakland, Wayne and Macomb counties, according to data compiled by Farmington Hills-based Realcomp, a multiple listing service. That is a 42% increase from 2012, which itself was a surprise boom for million-dollar homes sales after several molasses-like years during and after the housing collapse.

It was a solid year across all price points, with total sales in the tri-county region rising 26% from the previous year, according to a review of property transfer records by Bloomfield Township-based Advertising that Works, which tracks home sales.

The median home sale price was $116,250, up 29% from 2012 but still about 25% off the metro Detroit region’s price peak in 2005 and early 2006. As a whole, prices in metro Detroit were back to spring and summer 2008 levels.

Why the big rush for $1 million-plus homes? Experts attribute the boom in part to the return of strong profits in the auto industry, which translate to greater confidence and job security among the region’s executives, even those who aren’t directly in the car business.

\Doctors, lawyers, business owners and other top professionals were also feeling buoyant from the improving economy and, in many cases, were lured into buying by the still-low mortgage rates that most economists expect to continue rising this year.

What’s more, many of these high-net-worth individuals were in positions to benefit from the big stock market gains of 2013.

Home Sales Are Highest In Five Years

Just when it seemed that home sales were taking a breather, new data from the National Association of REALTORS® (NAR) says that home sales in 2013 were the highest since 2006, well before the housing meltdown.

For all of 2013, housing sales totaled 5.09 million units, which is 9.1 percent higher than in 2012.

Lawrence Yun, NAR chief economist, explained, “Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market. 

Yun says some momentum was lost toward the end of 2013 from disappointing job growth and limited inventory, but the year ended close to normal given the size of the population.

The national median existing-home price for all of 2013 was $197,100, which is 11.5 percent above the 2012 median of $176,800. That's the strongest gain since 2005 when prices rose 12.4 percent.

One bright spot was the decline of distressed homes in the mix. Foreclosures and short sales were 14 percent of December 2013 sales, down from 24 percent the year before.

Total housing inventory at the end of December fell 9.3 percent to 1.86 million existing homes on the market, a 4.6-month supply at the current sales pace.

Homes took longer to sell in December from November, but less time than in 2012.

The NAR suggests that home buyers and sellers face a few challenges in 2014. Mortgage rates are expected to continue to rise, and lenders and borrowers face new mortgage rules, such as new Qualified Mortgage underwriting standards.

But there's still plenty of pent-up demand, with more young adults moving out of their parents' home and into their own homes. The key is job growth, says the NAR. Only the confidence that stems from job security can enable first time buyers to buy and move-up buyers to purchase their next homes.

Fortunately, a new report by the U.S. Conference of Mayors suggests that nearly all U.S. cities are forecast to see economic growth this year, including some cities that have not really recovered from the Great Recession.

Southeast Michigan home prices increase by double-digits for 10th straight month

Growth for metro Detroit median home sales prices continued in December, rising by 40 percent year-over-year according to Farmington Hills-based Realcomp.

Realcomp, the multiple listings service for southeast Michigan, reported a median selling price of $120,800 for metro Detroit homes in December 2013, compared to $85,750 in the same month of 2012.

Sales in terms of units were flat at 4,077 homes sold in December 2013, compared to 4,069 a year prior.

Here's a closer look at year-over-year home sales by county in December:

Wayne
The median selling price jumped 67 percent to $75,000, while total units sold dropped 12 percent to 1,467 homes.

Oakland
The median selling price grew 21 percent to $168,250, while total units sold rose 9 percent to 1,452 homes.

Macomb
The median selling price rose 28 percent to $111,750, while the number of units sold increased 11 percent to 940 homes.

Livingston
The median selling price increased 13 percent to $180,950, while the total units sold fell 3 percent to 218 homes.

In the Grosse Pointe area, in which Realcomp includes all of the Pointes and Lake Township, the median selling price climbed 23 percent year-over-year to $214,900, while total sales by units grew 21 percent to 57 homes sold in December.

In the Detroit area, which includes the city of Detroit, Hamtramck, Harper Woods and Highland Park, the median selling price rose 30 percent to $13,000. Home sales by units dropped 23 percent to 358 homes.

Homes sold quicker in Metro Detroit in December of this year, spending 28 fewer days on the market at 49 days.

Across Realcomp's total coverage area, which includes southeast Michigan and a small portion of northern Ohio, on-market inventory shrunk 8 percent to 19,044 homes.