Dearborn Comps

[redfish]

I am appraising a bungalow in Dearborn north of warrren west of schaffer. I can not find any comparables that are reasonable. The home is 1100+/- finished full basement, very well maintained, newer roof, windows, clean as a whistle, and no deffered repairs, vinyl ext., 1 car garage. Values range from 24k to 163k for reasonable substitutes. Have any of you MI people been able to verify that some of those higher sales are on the up and up? Does anyone out there have any good comparables willing to share with me?

I hate appraising properties in Dearborn.m2:

 

[Kali the Boston Terrier]

Most of Dearborn and the surroounding market is dominated by REO sales. You cannot find any listings to set an upper boundary for your high sales?

My expereince in that area is that are a lot of listings, just using your criteria (Between Warren and Tireman, Schaefer and Greenfield, Dearborn Schools, Frame bungalows, between 900-1300 SF) there is 8 listings with an upper boundary of $159,000 with an average of $91,700; 2 pendings with an upper boundary of $109,000 and an average of $71,700. 7252 Coleman seems to be an unlikely very upper boundary for the market given its number of improvements and superior size. Its also in heavy competition with 5 listings that are well below $90k and appear to be in reasonable condition.

The highest sale is see is $92,800 and that sold a while ago suggesting that it is unlikely for that market to get at least $92,800 seeing the next highest sale is $55k then $52k,$51k, and $40k..especially with the great competition in the $70k range for listings, not sure why anyone would pay more than $70k, especially with many sales selling in the $50ks. Seems that those high sales fail the test of reasonableness in the framework of the principle of substitution. IMO

 

[hglenbetts]

I'm seeing the same thing as Brian. The older, close in suburbs are heavily weighted by the bank owned properties. Seems like every property I come up with, with a beleivable sales price, ends up it was a sheriff sale. There is no doubt that the value of real estate is impacted by the bank owned properties being sold at what would be considered $.60 on the dollar. They make up a vast majority of the sales. That's the market...

Seems the further out suburbs are starting to follow suite.

Detroit news artical from friday
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080215/BIZ/802150373

No mention of values....

 

[redfish]

I am seeing investors in many areas of the urban Detroit market factoring in even more risk aversion. 4 months ago in an area I completed an assignment in, REO market participants were paying 50-55% of market value. I was just in the same area last week and the most recent REO sales were reflecting more risk aversion, 60-65% of market value.

 

[Charley Horse]

What am I missing.

REO market participants were paying 50-55% of market value. I was just in the same area last week and the most recent REO sales were reflecting more risk aversion, 60-65% of market value.

... more "risk aversion" = paying 10-15% more of market value? This doesn't make sense to me...

 

[redfish]

My bad, I had my numbers reversed. Thanks for pointing it out.

 

[Kali the Boston Terrier]

I have an investor client who will Not pay more than $0.30 on the dollar. That's for inner ring suburbs.

 

[redfish]

Has that alwasys been the case or has your investor been adjusting that figure.