Michicagan Houses everywhere, but few buyers to close sale

The Detriot Free Press reports:

Blame it on the simple economics of the market -- there's way more supply than demand.

In Oakland, Macomb and Wayne counties, there were 37,393 homes on the market as of March 1, compared with 11,078 at the same time in 2001, a 238% increase, according to real estate statistics supplied by Realcomp II Ltd., the region's largest multiple listing service.

The struggling regional economy, the uptick of interest rates, lagging home values and new housing construction are all factors in the market saturation. And those who must unload their homes -- because of divorce, layoffs, illness, a growing family, job relocation or retirement -- are often stuck, sometimes carrying two mortgages as they compete to sell.

"It's a mystery to us why we haven't been able to sell the house, even though the economy is suffering," said retiree Nancy Cunningham, 59, a West Bloomfield resident with a 4,263-square-foot home on Pine Lake that has been on the market for 2 1/2 years. "We've done just about everything we could in an effort to sell it."

A good rule of thumb is,even on high priced homes,when you have a home on the market longer than 12 months and it doesn't sell it's overpriced.Market conditions must have changed.An area like Michigan that's been affected by the auto industry doesn't have the fundamentals for higher and higher prices.Other states probably will face the same situation when the baby boomers start retiring in 2008.