It's March Madness in Michigan!

Supply: Southeast Michigan's 5-County market began 2017 with lower inventory levels than any time in the past fifteen years. Then between the beginning of January to the end of February, inventory levels fell another 10.5%, from 9,849 to 8,815 available listings.

Demand: Despite lower and picked-over inventory, new pending activity increased by 12% in January and by 16% in February. The combination of fewer available listings and increasing new pendings caused Months Supply to drop from 3.0 to 2.1 months since the beginning of the year. Many buyers, who did not find or get what they were looking for last year, are still watching the market and ready to jump when they see the right home. Sellers who get their homes on the market early this year have the best shot at tapping into the big pool of buyers who continue to look.

Higher-End Homes: With 9 Months Supply in the over $600K price range, higher-end markets are not as hot as the middle and entry markets. However, even with higher-end properties, many buyers are watching and ready to jump when they see sharp new listings.

Early Opportunities: The combination of low and picked-over inventory with the mild winter provides a great opportunity to sellers who can get their homes on the market early this year.

Low Inventory and High Demand

Inventory levels are at a 15-year low and 45% of the listings that are available are picked over and > 90 days old.

The average Days on Market (DOM) for active listings > 90 days is 241 days.

Buyers are lining up to see and buy the clean new listings - 18% of January sales sold in the first week for just over 100% of asking price.

High-End Supply/Demand: With 9-10 Months of Supply, inventory levels are not as tight for higher-end markets, yet much of that inventory is also picked-over and sitting. While the backlog of higher-end buyers is not as large, there is an unfulfilled demand for clean, new high-end listings. Despite 300 days of supply, the average market time for the 68 January "over $600k" closed sales, was only 133 days.

Today's buyers want and will pay extra for clean move-in-ready homes.

First Week Listing Activity: 10% of January inventory at the end of the month was less than 7 days old with an average price of $233k. 18% of January closed sales were homes that sold and were processed as pending in the first week. With the low and picked-over inventories, a high percentage of new listings are selling in the first week.

Pricing - A Tale of Two Markets: In every price range there is a significant gap between average list price and average sold price (see blue columns in the above chart). For January closed sales, those that sold within the first 30 days, sold for an average of +99% of their original asking price; 97% of original asking price, if sold between 31-90 days; and 94% of original asking price, if sold in more than 90 days. Homes that have slipped off into the > 90 day abyss have been on the market for an average of 241 days and have only reduced their prices by an average of 2%. Most of the > 90 day listings will continue to sit until they make significant price or condition adjustments.

Seller Opportunities: Many of today's listings are rough due to deferred maintenance as we passed through the recession. There is a shortage of well-maintained and detailed homes that buyers want. Couple the inventory shortage with the mild weather...This is a great year for sellers to get out of the blocks early. The threat of rising interest rates also motivates buyers to accelerate their purchase plans. Buyers can afford to buy more house (at a higher price) at lower interest rates. Sellers benefit in that more buyers can pay asking price.

Two Buyer Opportunities

1. Most buyers are looking for well-maintained and detailed homes. Buyers should have their financing lined up and approval in hand. They should use immediate listing notifications and and go see hot properties the same day, with their check books in hand. Be ready to write, the best ones won't be around tomorrow.

2. Buyers who aren't seeing anything that interests them in their target price range should look at slightly higher priced > 90 day listings. Some over-priced sellers are getting lonely and might entertain a reasonable offer.

 Please contact us with any of your real estate needs, we are always happy to assist you.

Subscribe to Our Blog

This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

Send Us a Message!

This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
14 + 4 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.