When the media reports on the US real estate market, does the report accurately reflect your area? Does the media tell the Real Story?
Let's take a look at the Tale of 2 Condos.
Back in November of 2003 we purchased a 2 bedroom condo in Washington Township, MI. At the time the condos in the complex were selling between $120,000 - $125,000. However, since we purchased a HUD foreclosure we only paid $105,000.
Then a few months later in May of 2004 while on vacation in Florida, we found another HUD foreclosure in Lake Suzy, FL. This was also a 2 bedroom condo only we paid $57,000 for this one but at the time the condos were selling between $70,000 - 75,000.
Now mind you both condos were experiencing a minimal growth rate for several years and both units were comparable for the area. Then all Hell broke loose.
The condo in Washington started to increase in value and were selling between $125,000 - $127,000 at the peak. Then they started to drop in value. It's now worth much less due to the bank owned condos that have driven the market way down. As of today condos in this complex are selling for $55,000 - $65,000. Thanks to the banks.
Whereas the condo in Lake Suzy went way up and in 2005 we saw condos in our complex selling between $140,000 - $150,000 at it's peak. Then they too started dropping in price and are now selling between $70,000 - $80,000. Pretty much what they were selling for when we purchased it back in 2004.
The Florida market like many other states was a speculative market. It was driven way up and similar to musical chairs, the last one standing lost. However, we did not see this in Washington Township, Michigan.
Now to recap the Tale of 2 Condos - our Michigan condo has dropped back to what they were selling for in 1991 and the Florida condo to 2004 prices. Both states are listed as top foreclosure states. Here's a tour of these 2 condos.
Remember when the media reports the real estate market, what they tell us is NOT a true picture of the countries real estate market. It is an average or snap shot of several markets combined.
How's your market compare???
Hey great post. Thanks for the information about your area.
I actually think the media does a pretty decent job reporting the facts. It is the Realtors that most often cringe because they do not want to hear negative news that affects their bottom line.
Thanks Brian as you can see the MI market is a whole lot differnet than FL
Hey Bill the problem is the media reports are not a real picture of every market - case in point our condo in Florida vs Michigan. As you can see above FL is back to 2003 and MI is at 1992 prices. Not what you are hearing in the press.