Up popped the devil we know…

My gut told me that March was a tough month, just based upon the high percentage that I saw in the data for my little patch (9 townships that I track), and the headline in today’s local paper confirmed that feeling. Foreclosures jumped back up in March, after having been down in January and February. There were 955 foreclosures in Oakland County in March of this year, as compared to only 915 in March last year. January 2011 started out with only 558 foreclosures in Oakland County, which gave us some hope that the worst was behind us. It was not to be. We seem to be in that confused and confusing state of change that occurs near the bottom of any recession. We haven’t quite reached the inflection point or at least not one that has proven to have legs. We keep bouncing along near the bottom, moving up and down in what appears to be a random pattern, but with distressed sales – foreclosures and short sales still dominating the markets. Last week was the first time in a long while that distressed sales made up less than ½ of my market. I took that to be a good sign. Another good sign is the fact that houses above $200K are selling again, even if they aren’t distressed. That’s good for two reasons – 1.) it says that move-up buyers are back out in the market, and, 2.) it will encourage more would be sellers of midrange homes to get them on the market. We have actually had a very low inventory on the market locally of good mid-range homes that are not distressed. A good portion of the newspaper article about the foreclosure spike in our area focused upon the impact on the tax base and revenues of local governments. This was another year of declining assessed values in our area, with properties down 8-12% depending upon the area. That not only impacts the tax base, but the ability of many owners to even consider selling. The value declines are a real mixed blessing. They mean lower taxes, which everybody is in favor of; however, the continued decline in values continues to put “innocent bystander” homeowners underwater. Now many people who did nothing wrong, who did not overextend themselves or buy more than they could afford; find themselves in the some boat as the people who supposedly caused this mess. I guess, if you are on the Titanic, you never know who you’ll end up in the lifeboat with when the ship goes down.