Detroit area home prices likely to show 2014 gains

Metro Detroit was poised to end 2014 with lower home sales but much higher sales prices than in 2013, as at least one national report indicated the region's housing market might continue to gain strength in the new year.

For the 11 months through November, the seven-county Detroit area had sold 60,610 homes, down 6.5 percent from 64,817 during the same period in 2013, according to Realcomp II Ltd., a Farmington Hills multiple-listing service. The nearly 65,000 single-residence homes sold in 2013 marked the high point for the past decade.

The report for December, due out in mid-January, is unlikely to shift sales into positive territory for the year because the month traditionally has lower sales than most other times of the year.

But home prices in the region soared 20.4 percent to $131,319 through November compared with the same time last year, according to Realcomp. The $131,319 median price is more than double the past decade's low point of $56,775 in 2009 but still well short of the 2005 high mark of $165,559.

A report released this week suggested Michigan and Metro Detroit could continue to enjoy home price growth in the new year.

"Price growth in the Midwest is expected to outpace the nation on all tiers by 1.6 percentage points, nearly double that of the nation, in 2015," according to the forecast by Clear Capital, a Truckee, California-based firm that compiles real estate valuation information.

Midwest homes selling for under $95,000 are projected to experience 7 percent growth in 2015, more than double the forecast for the rest of the country, according to Clear Capital.

Metro Detroit real estate agents blamed sluggish 2014 sales on a lack of move-in-ready homes on the market during the past couple of years. But the lackluster supply has helped drive up prices.

The Detroit region saw its prices rise at an annualized rate of 3.6 percent through October, according to a late December report of the respected Standard & Poors' Case-Shiller index. The price growth was lower than the 4.5 percent experienced in the 19 other cities in the index.

By contrast, Metro Detroit prices beat the national average during the three prior years — often by large margins. Detroit's prices jumped 16.6 percent in 2013 compared with 6.9 percent for the other 19 benchmark cities, and grew 15.2 percent in 2012 compared with a 4.1 percent decline in the benchmark index.

The persistent rise in Metro Detroit home prices during the past four years has started to encourage more homeowners to test the market. In November, the four-county Metro Detroit region had 17,287 homes listed for sale, up 14.6 percent from 15,088 a year ago, according to Realcomp.

The suburbs have helped lead the home price comeback during the past few years, but this year urban areas have joined the trend. In November, the median price in Detroit, Hamtramck, Highland Park and Harper Woods jumped 29 percent to $17,500 from a year ago, Realcomp found.

It helped boost Metro Detroit's median price nearly 16 percent in November, compared with healthy but lower increases of 5.5 percent in Livingston, 9.6 percent in Macomb, 9.7 percent in Oakland and 14.4 percent in greater Wayne counties.

The housing improvement has been accompanied by a steady decline in the Detroit area's mortgage delinquency rate.

The proportion of mortgage loans in Detroit-Dearborn-Livonia that are 90 days or more delinquent has dropped from 8.6 percent in January 2013 to 5.26 percent in November 2014, according to a report released Wednesday by CoreLogic, an Irvine, California-based company that gathers and analyzes data on mortgages and other industries.