GO
Loading...

Million-Dollar Homes Looking Ordinary

Friday, 7 Mar 2008 | 1:13 PM ET

With plummeting home sales across the country, the opportunity to buy a home with a drastically reduced price tag has risen significantly. But in some markets, even deep discounts aren't aiding in realtors' efforts to move inventory.

One example: Detroit, where sales plunged 41 percent in January compared with the year before. That's significantly higher than the nation's average of a 23 percent decrease during the same period.

“The market has been awful,” said realtor Kenan Bakiric of Coldwell Banker Schwitezer-Birmingham. The only Detroit homes that are really selling are those priced between $80,000 and $120,000, he says. So million dollar-plus homes are far out of reach for most Detroit residents.

At $899,999, a 12,000 square-foot Italian Renaissance-style mansion in the city’s historic district has been on the market for over four years — and the price has been reduced several times. (It was listed at $950,000 when we visited the stately manor in March 2006).

Even before that, the property had been listed for several years with a different realtor who also was unable to sell it, even though it features a beautifully restored solarium, renovated kitchen and original butler’s pantry among its 30 rooms. See the listing here.

“We probably get 100 calls a month, but no real buyers,” Bakiric said. Competition may not help. Another historic home on the same block — 11 bedrooms, 8 baths, with a new furnace and hot water heater — has also been on the market for about two years. Asking price: $850,000. See the listing here.

Home prices in nearby Ohio, on the other hand, slipped less than overall in the nation last year. And while home values in urban areas may have fallen even further, some wealthier suburbs attracting doctors, lawyers, and other professionals, have held up much better.

Homes in Shaker Heights, Ohio, a suburb of Cleveland, priced in the high $900,000 range last year are now on the market for $875,000 to $879,000, says realtor Leah Eisenberg of Howard Hanna. Still, Eisenberg says a home that we visited last April, which sold for $995,000 that spring, may still command a similar price this year because it didn’t need much work.

Homes priced near a million dollars in Shaker Heights are selling, though listing prices are lower than they were a year ago.

“Buyers are saying we’re going to offer 20 percent less (than asking),” Eisenberg said. So buyers who want to sell quickly must price accordingly.

Homes near the Big Apple may fare among the best during this housing crisis. In New Jersey, existing home sales may have dropped 9 percent in the last year, but prices stayed basically flat in areas closest to New York City.

The median sales price for an existing single-family home in the area (which includes New Jersey’s Bergen and Passaic Counties as well as New York City and Westchester County) was $540,300 in 2007. Still, the $1.15 million dollar one-story ranch we visited in Tenafly, N.J., two years ago may command closer to $1 million today.

Homes are “adjusting to the right numbers,” said Marjorie Bernstein of Weichert Realtors. Homes that were around $1.2 million a year ago are closer to $999,999 now. But there’s a glut of inventory in Tenafly of homes priced between $900,000 and $1.2 million, Bernstein said.

“Those prices are going to have to come down if homeowners want to sell.”