Yea! We're not #1!

A recent story on CNN's Money Web site used a set of predictions that have been created by Moody's (see whole story) on the coming declines in the values of homes in major market areas. The table lists the top 100 U.S. markets and the projected declines. Most of the predicted declines are yet to come, with Q3, 2008 as the projected "bottom" of this declining market. The list below shows only the top ten, plus the other market areas in Michigan that were on the top 100 list - some are groupings of cities in the area.

#1...Stockton, CA.....................................................-25.0

#2...Palm Bay-Melbourne-Titusville,FL..............-24.9

#3...Sarasota-Bradenton-Venice,FL.....................-24.8

#4...Reno-Sparks,NV..............................................-22.4

#5... Modesto, CA.................................................... -22.3

#6...Detroit-Livonia-Dearborn MI........................-21.3

#7...Fresno CA......................................................... -20.0

#8...Oxnard-Thousand Oaks-Ventura, CA.......... -19.2

#9...Sacramento--Arden-Arcade--Roseville CA..-19.1

#10.Las Vegas-Paradise, NV.................................. -18.7

#18.Lansing/East Lansing, MI............................... -15.7

#20.Warren/Farmington Hills, Troy, MI............. -15.4

#37.Flint, MI ............................................................ -11.3

#67 Grand Rapids/Wyoming, MI.......................... -5.3

California, as expected, had the most entries on the top 100 list, followed by Florida (also expected). Michigan tied with Ohio for Mid-west honors (if it can be called that); although Ohio cheated by having two area that it shares across borders with neighboring states - Youngstown and Cincinnati.

If the area that you live in is not named here, that's just because it isn't large enough in population to make the top 100 list, not because it is somehow magically going to avoid this decline. If you're in the Detroit metro area of influence - Wayne, Oakland, Macomb, Washtenaw and Livingston Counties - you are in a declining value market, likely in the -13 to -15% range. We may bottom out sooner here, since much of that decline has already shown up in pricing here, but it will still likely be early Q3 of 2008 before we start back from the bottom of this market.

These projections mean that we've got more price pressure to come; and, the sooner sellers accept that fact and deal with it in their pricing, the sooner we can get rid of some of the overhang of inventory on the market. Buyers can expect to continue to see great deals, well into next year; but buyers need to be ready to make decisions, instead of trying to wait for the "bottom" of the market. Market-timing in real estate is as much a fools game as it is in the stock market. You don't want to end up with a bad case of the "coulda, woulda, shoulda's", just because you waited too long for a better deal on the house that you wanted.