It is interesting to see the average days on market (DOM) for homes sold has remained about the same over the past two years (the blue line on the chart). This sounds counter intuitive; it would seem the days on market should fall as the market improves. The DOM is a good illustration of the "Tale of Two Markets" we are seeing. A small segment of the market is well priced and selling quickly while the majority remains priced out of the main stream, taking months or even years to sell. So even as available home inventories fall and sales rise, it is all "churning" within a smaller segment of the market. For Sellers, that means they need to be fully aware of the total market and focus on Solds over active listings. Be careful pricing against your current competition. Those still on the market after six months are priced out of the market and not relevant competition.
As expected, our current business mix has shifted even more towards Short Sales in the past few months, currently running at 33% of sales. Traditional sales have also risen to 29%, from a low of 10% in 2008/early 2009 and bank sales/foreclosures about 16%.
So what will next year look like for Michigan real estate? We would expect it to look and feel a lot like 2010, maybe down a bit in number of homes sold, but growing stability in pricing. Also a continued decline in available home inventories, but not falling as fast as 2010 (more bank properties and an improving market will bring out those sitting on the fence). If we simply match 2010, that would be a great success, since it would mean our core economic improvement has made up for the artificial market push this year from the tax credits.
Have a Safe and Happy Holiday!
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