More high-end homes are selling, but short sales and foreclosures still common

From Cami Reister at the Grand Rapids Press, June 01, 2010

Grand Rapids area home sales took an expected dive last month — 51 percent lower than April’s record high and 31 percent lower than May 2009 — but Greenridge real estate agent Lynnanne Phillips is not complaining.

She is focusing on the average sale price last month, which, at $118,665, rose 10 percent from the year prior, the eighth straight month of year-over-year price gains.

“That tells us that the next level of buyer is finally getting unstuck,” said Phillips, who has been in the business for about eight years. “I’m seeing them jump on board now because they are able.”

The federal home buyer tax credit — $8,000 for first-time buyers and $6,500 for existing homeowners who buy — started the needed domino effect, she said.

“The buyers that I have right now are in the $250,000 to $350,000 range. Some of them are closer to $400,000,” she said.

According to the Grand Rapids Association of Realtors, 15 percent of the homes sold last month were priced above $200,000. That is up from 10 percent in May 2009.

Lola Audu, president-elect of the association, also noted the increase in sales of higher-end homes.

“For the year so far, we’ve had seven sales in Grand Rapids over a million and four from $900,000 to a million,” she said. “For a long time, that market was totally dead.”

However, more than half of last month’s transactions were short sales or foreclosure properties, Audu said.

“That has the potential to decrease the sales prices again,” she said. “It’s also an indication that even though there may be a recovery, there is still a lot of stress in reference to why people are selling and how they are selling.”

May sales numbers were predictably low because buyers in April rushed to claim the expiring federal home buyer tax credit, leaving a dearth of activity in May.

Buyers had until April 30 to get a home under contract to qualify for the credits. Those who successfully got their paperwork signed still must close by the end of June to receive the credit.

While the April binge resulted in a May hangover, association CEO Julie Rietberg noted year-to-date numbers still are positive. Home sales are up 14 percent from this time last year and up 19 percent from 2008, according to monthly statistics.

“Area Realtors are reporting that they continue to see high levels of activity and an increase in the number of showings,” Rietberg said.