When the housing price drops stop

Macomb Daily in Michigan reports Macomb County posted 17.5 percent more homes sales last month than in July 2007.  The median price was $112,250, compared with $145,000 one year ago.  Housing inventory is also shrinking as 8,326 properties are available currently, with 9,641 available one year ago.

This probably isn’t the bottom for Macomb County, but it certainly appears that prices are starting to come into line with people’s expectations.  Increasing sales and shrinking inventory do provide hope that prices will not continue on a perpetual decline not only in Macomb County, but in other regions also suffering price declines.

Michigan is very different than the coastal “bubble” markets though.  OFHEO charts don’t show a lot of price increase in Michigan in this decade with price declines beginning in the second quarter of 2006, so it’s very likely Michigan price declines aren’t related to tightening credit standards, but economic conditions within the state.

The good news here is the fact people are purchasing homes when price points reach a level where it makes economic sense.  This will also apply in markets that were highly speculative, but unfortunately, the more speculative markets will still have quite a bit of price drop left to reach the point of economic sense.