October 2010 Real Estate Market Update
It is a bit to early to announce a definitive trend. Although less than last year, unit sales still showed a reasonable pace (close to 2006 levels), with sales values holding steady since the spring, down about 40% from 05' peak values. It is still a Buyers Market at over 5 months supply, however the number of homes available for sale continues to shrink, helping move us towards stability and signaling the end of the imbalance in our market. Buyers should take action before they encounter an increase in interest rates.
Nationally, both NAR and the Mortgage Bankers project an increase in the number of homes sold in 2011 over 2010 based on continued low interest rates, affordable home prices as well as an improving economy. They also say values will continue to settle downward and bottom out next year. With that said, remember that real estate is local, not national. The various markets across the country will recover at different rates. In general, the Midwest, including Michigan, seems to be faring better than the South and West. Our data indicates most markets have shown a stable and even slightly rising value trend however, even in markets that continue to settle downward, it will not be significant enough for Buyers to delay purchasing, since any rise in interest rates will off set any savings from a potential price decline.
Also on the positive side, the latest Comerica economic activity report continues to move in the right direction since bottoming out in January of last year. Economic activity and hiring is slow, but it is still moving in the right direction.
One indicator that the market still has some work to do is our percentage of lease transactions, currently still running at about 20%. A good recovery indicator will be when the percentage of leases falls to under 10% which will go hand in hand with available home inventories falling to a three month or less supply.
With generally better news about the direction of the market in the past nine months, should Sellers be expecting the same in terms of rising values and offers? We are not quite there yet, however there is a growing pent up demand from buyers. In many cases aggressively price homes in good, updated condition are getting multiple offers and selling quickly. These homes represent less than 30% of the market and for the most part are priced below their competition. The rest are typically priced or "conditioned" out of the current Buyer demand.
On a bragging point, Hitwise once again ranked our web site as the most viewed broker site in the state and our new First to Know voice and text programs generated 1,150 client registrations in the past two months.
We are using a new format for the Market Summary this month. With the tax credits influence, comparing to last year can be misleading. A better current trend comparison is to the most recent months using a seasonal index so we can compare “apples to apples” months. These charts follow the current market trend over the past 90 days ( up, down or neutral).
Data Source: MIRealSource, Realcomp, Ann Arbor MLS, TAAR
Months Supply Inventory represents the rate (months) to sell the current listing inventory
*Includes Eastpointe and Harper Woods ** Includes Grand Traverse, Kalkaska, Antrim, Leelanau and Benzie Counties,
Tuesday, December 7, 2010
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