The link below will take you to a comparison for the number of closed transactions by county (Macomb, Livingston, Washtenaw, Oakland, Wayne and within the city of Detroit) and price range over the past four years. The charts as a whole show an interesting trend of the under $100,000 price range closed activity is dramatically shrinking with the exception Macomb county, which has experienced a small increase. You will notice some great news in Oakland County where all price ranges OVER $250,000 are up and all UNDER $250,000 are down. That is definitely a positive sign for the Michigan real estate market. A similar trend is happening in Washtenaw County with the $300,000+ market seeing a nice increase in closings while the lower ranges are not as consistent, some are up while others are down. As a contrast to the Detroit Metro Area, all price ranges within the City of Detroit are showing a decrease in closed transactions over this same time period in 2010. Could this decrease in the city of Detroit be due to a lack of inventory? Will the good news continue? Only time will tell. Check back often, we will keep you posted.
Market Graphs through March 31, 2011
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Thursday, April 28, 2011
Monday, April 18, 2011
Michigan Real Estate Market Update
The first quarter of 2011 has been an interesting ride with home buyer activity at a pace not seen since 2004. Many indicators show that Michigan is actually leading the rest of the country out of the recession, boosting consumer confidence and housing interest.
Looking at the months supply of housing inventory (MSI) gives us a good indication of why the Michigan real estate market has felt so frenzied (MSI of 0-3 months = Sellers Market, 4-6 months = Neutral, over 6 months = Buyers Market). We have been in a Buyers Market for nearly 6 years but in a short period of time we have moved from 8.3 MSI in December to 4.6 months in March and under 3 months for bank-owned for Southeast Michigan!
Within those numbers is a growing housing quality issue. For a percentage of homes where the mortgage has exceeded the market value there has not been an incentive to update, upgrade or even maintain. The result is a higher percentage of homes for sale that are less desirable since they may be dated or require significant work, even if they are not bank owned. So when you factor in the quality of the current housing inventory, the overall market number of saleable homes may be closer to 3 months MSI.
The following chart shows how the market has shifted from 2009 to 2011 in terms of the number of homes for sale and the rate of sales.
It is not hard to see the forces of supply and demand at work over the past three years.
Increasing sales and decreasing inventories have created the multiple offer situations we have seen in the last 90 days. As strange as it sounds, we have a significant shortage of saleable homes for sale.
Does that mean prices are rising as well? Not really, conservative appraisal standards will still hold back values to some degree and at this point in the early stages of our recovery; increased activity translates into a faster sale, but not necessarily a higher price. So pricing still needs to be aggressive to attract attention. But it is clear that for sellers it is the best time in the past six years, with demand exceeding supply, to try the market.
The best advise for a buyer is to be very flexible and willing to act quickly, hesitation will be costly. As prices begin to firm up, buyers will need to shift their mindsets from making deep discount offers to working within the range of the asking prices.
So with all these good signs, what can slow things down again? There has been some conversation about a real estate double dip and in fact Detroit was named as a double dip market (we have not seen that in our data). Increasing gas prices and in general a slowing of consumer confidence will keep a lid on growth. Also the number of bank owned homes being released to the market could have a negative short term affect, but positive in the long term. There is also a large backlog of homes that have been leased because they were not able to sell which, if placed on the market in high numbers, could slow the recovery.
Any market that changes direction, in this case in a positive way, gives off confusing signs to both sellers and buyers, so remember the weirder it gets the better it is for home ownership and home values!
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Looking at the months supply of housing inventory (MSI) gives us a good indication of why the Michigan real estate market has felt so frenzied (MSI of 0-3 months = Sellers Market, 4-6 months = Neutral, over 6 months = Buyers Market). We have been in a Buyers Market for nearly 6 years but in a short period of time we have moved from 8.3 MSI in December to 4.6 months in March and under 3 months for bank-owned for Southeast Michigan!
Within those numbers is a growing housing quality issue. For a percentage of homes where the mortgage has exceeded the market value there has not been an incentive to update, upgrade or even maintain. The result is a higher percentage of homes for sale that are less desirable since they may be dated or require significant work, even if they are not bank owned. So when you factor in the quality of the current housing inventory, the overall market number of saleable homes may be closer to 3 months MSI.
The following chart shows how the market has shifted from 2009 to 2011 in terms of the number of homes for sale and the rate of sales.
It is not hard to see the forces of supply and demand at work over the past three years.
Increasing sales and decreasing inventories have created the multiple offer situations we have seen in the last 90 days. As strange as it sounds, we have a significant shortage of saleable homes for sale.
Does that mean prices are rising as well? Not really, conservative appraisal standards will still hold back values to some degree and at this point in the early stages of our recovery; increased activity translates into a faster sale, but not necessarily a higher price. So pricing still needs to be aggressive to attract attention. But it is clear that for sellers it is the best time in the past six years, with demand exceeding supply, to try the market.
The best advise for a buyer is to be very flexible and willing to act quickly, hesitation will be costly. As prices begin to firm up, buyers will need to shift their mindsets from making deep discount offers to working within the range of the asking prices.
So with all these good signs, what can slow things down again? There has been some conversation about a real estate double dip and in fact Detroit was named as a double dip market (we have not seen that in our data). Increasing gas prices and in general a slowing of consumer confidence will keep a lid on growth. Also the number of bank owned homes being released to the market could have a negative short term affect, but positive in the long term. There is also a large backlog of homes that have been leased because they were not able to sell which, if placed on the market in high numbers, could slow the recovery.
Any market that changes direction, in this case in a positive way, gives off confusing signs to both sellers and buyers, so remember the weirder it gets the better it is for home ownership and home values!
Michigan Home Search
Join Our Team
Join Us On Facebook
Chat with us LIVE
Wednesday, April 13, 2011
7th Annual Screen Door Open "fore" Special Olympics
It's that time of year again! The 7Th Annual Screen Door Open ‘fore’ Special Olympics is set to go on Tuesday June 14, 2011 at Northville Hills Golf Club, Northville, Michigan. A number of teams have already registered, but we still have room for yours. We promise a great day of golf, course contests and prizes, all to raise money for Special Olympics. We are also looking for sponsors so please pass this information on to anyone that you think could help us.
Don’t delay. We want as many people as possible to be part of this great event. To register on line click here.
Thanks for your support.
REO CHARITABLE FOUNDATION
Don’t delay. We want as many people as possible to be part of this great event. To register on line click here.
Thanks for your support.
REO CHARITABLE FOUNDATION
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