This is an excellent time to buy in Oxford, Michigan. The hugely large and fast appreciation of the 90's had to come to an end sometime. Prices have dropped over the past few years, but like the good times, this deflation in prices will be coming to an end, too. Since real estate is cyclical (feel a bit like the 80's except without the double digit interest rates?) the escalation of home prices will start to rise again. Making today's home purchase a great investment if you're willing to stay put until the good times come back.
Real estate is cyclic and right now we are on the down swing. In Oxford, MI, for example, the average sales price in 2007 was 12.3% lower than the average sales price in 2005. BUT, the average sales price in 2007 was still more than 10.4% more than in 2000. Below is a summary of sales trends from 2000 to date for Lake Orion and Orion Township, MI.
2000 - 222 sales - avg. sales price - $216,693
2001 - 234 sales - avg. sales price - $243,161
2002 - 196 sales - avg. sales price - $243,309
2003 - 232 sales - avg. sales price - $242,823
2004 - 274 sales - avg. sales price - $250,000
2005 - 276 sales - avg. sales price - $276,825 - median sales price - $246,950
2006 - 182 sales - avg. sales price - $265,796 - median sales price - $237,450
2007 - 181 sales - avg. sales price - $241,877 - median sales price - $217,900
In 2007 houses in Oxford, MI sold within 5.5% of the final average asking price and within 5.2% of the final median asking price.
The median sales price for the first quarter of 2008 was $196,000- down 6.2% from the median sales price in the first quarter of 2007 of $209,000. The good news is that the unit sales for the first quarter of 2008 were up 27.5% from the amount of sales in the first quarter of 2007.
The amount of foreclosures on the market have been, and will continue to, drive the sale prices down until the excess inventory is gone. As of 4/6/2008 there are 278 active listings in the MLS with an average asking price of $321,686 and a median price of $249,950. That's 97 more houses than sold in 2007, with more coming on the market every day and another waive of foreclosures expected to hit soon.
What do all these numbers mean? If you can afford to stay in your current home- STAY. Unless you are considering upgrading. If you are in the market to buy a house- your timing couldn't be better. The prices may go lower, but there's no guarantee. There are terrific bargains on the market now. Interest rates are still good. And FHA has raised the limits on what you can borrow, allowing for 3% down and possible zero down financing up to approximately $300,000 (depending on where you buy).
The above figures come from Realcomp MLS and backing out leases