January 2011 Michigan Real Estate Market Update

The 2011 Michigan real estate market was kicked off in January with the same positive momentum shown in November and December. The inventory of available homes for sale declined, with listings down in all price ranges and markets, furthering our move towards a stable real estate market. Even in this bitter cold month, buyers visiting Real Estate One, Johnstone and Johnstone and Max Broock REALTORS' open houses were up by 50% and showing appointments were up by 25%, compared to December 2010.

So far it appears 2011 home inventories in Michigan will remain close to 2010 levels, with a decline more likely than a rise over 2010 based on an improving economy (an increase in bank inventories would be the only reason for a rise). The months supply of inventory in the under $100,000 range is below the 6 month mark, moving towards a normal market. It is a bit too early in the year to truly claim a normal market, but we should know by the end of the first quarter of 2011. In the over $100,000 price range, the move to a normal market has been slower, but still moving in a positive direction.

The successful formula for this year so far looks like low interest rates + renters coming back into the market + homes getting priced right + banks moving faster = homes selling faster and possibly for more money. A large factor will be the renters who have repaired their credit from as far back as 2006 and still want to own a home. In fact, a National Association of REALTORS (NAR) study showed that 95 percent of owners and 72 percent of renters still believe that it makes more sense to own a home; which further supports consumer confidence going into 2011. NAR economists expect 2011 to be the third best year on record for housing affordability.

All of this good news does not mean values are going to jump or sales will skyrocket, after all, 2010 was a pretty good year in terms of the number of Michigan homes that were sold. But all are clear signs we have moved off the bottom and have enough market momentum that, at least for Michigan housing, we will be able to handle any economic “double dips” that some economists have predicted.

See our how your local real estate market performed in January 2011:
Oakland County, Macomb County, Livingston County, Washtenaw County, Wayne County, City of Detroit, Grosse Pointe and Northwest Michigan!

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