DETROIT -- After more than three years of declines in home sales, prices and new construction, Metro Detroit could be taking a step toward a housing recovery.
For the third month in a row, sales of single-family houses and condominiums in the four-county region have increased over the same month a year ago.
In the February data released Tuesday, sales were up 13.8 percent over February 2007, according to Realcomp, the Farmington Hills-based multiple listing service. In December sales were up 7.3 percent from the same month a year earlier, and in January they were 15.2 percent.
Wooohoo i was right in predicting what will happen to the housing market in my previous post. So its moving in the right direction by cutting supply virtually. I mean Virtually here because, there are already many unsold and defaulted homes around, only way to cut down supply is to refuse to sell it at a price below certain buffer value. So what happens is that just put a bait and keep on flooding the news media with housing slump, no one wants homes, its all cheap now and you may get for a deal. When people are exposed to such news, the tendency is to go and look at prices. Trick here is that say you mark the price of a house as $100,000. 10 people with varying budgets will look at this one, 5 out of them may look at factors like location, the depreciation costs, the built up sq feet etc etc. 5 will be interested and will have a budget of $100k to $150k, so when there is 1 house and 5 people for it, the bidding war follows and its like an increased local demand. When you string together n-local demands, you have a whole demand curve with supply curve dictating the cost. So eventually sooner or later, a time will come when the housing market will reach previous level. Another factor driving the cost up and sales is that those fence watchers will buy it with a hope to sell it off at a kill. So all those rich guys and investors will jump into fray. Mark my words as this will happen sooner or later all round the US.
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