|This month’s Real Estate Update for June 2018 is good news for sellers but for buyers — they are still battling the housing inventory shortage. However, we are beginning to see some upward movement in the amount of new listings. There may not be massive increases in inventory from week to week, but this longer-term trend upward toward more new listings is a good sign.
During the month of May, home sales hit an record highs in Southeast Michigan. Most homes are experiencing multiple offers and are flying off the market, especially in places like Farmington Hills, Novi and Northville. Home values across Oakland County are up 7% in the month of May and even more since May of 2017. It looks like the tides are starting to turn for Oakland County homebuyers as newly listed homes for sale were up an impressive 6.6% year-over-year.
Right now in West Michigan we have extremely low inventory, especially in the mid-range of $175,000 to $250,000. In the most recent data provided by Michigan Realtors, it said that as ofApril 2018, there have been 1,654 houses sold in the West Michigan Lakeshore Association jurisdiction, which is down less than 1% from 2017. Of those sales, the average sale price for the area was $199,679, nearly $3,000 more than last year. These homes are also staying on the market an average of 55 days. New data from realtor.com shows Grand Rapids has jumped up to become the # 9 “hottest” housing market in the country for the month of May. The jump was one of the largest in the monthly ranking, as Grand Rapids sat at number No. 25 in April.
Compared to many other real estate markets across the country, Michigan has an affordable market for investment. According to Redfin, Michigan metros were the most competitive and fastest growing in the nation. Detroit experienced a 21% year-over-year price increase, the second highest in the nation behind San Jose, followed by Grand Rapids, where homes spent on average just 9 days on the market.
Mortgage rates jumped this week reaching a seven year high. A 30-year fixed rate mortgage is currently around 4.6%, which is up two basis points. The last time rates were at this level was the spring of 2011. With interest rates going up, less people could be entering the market, meaning buyers will have less competition when they go in to buy. Real Estate experts are saying the healthy economy and job market are keeping buyers in the market for now even as they face rising mortgage rates.
As we enter the peak of the home buying season, new listings will be key in maintaining sales growth and moderating the rapid price increases we’ve seen throughout this past year. Our current market situation makes it crucial that a buyer has a buyer’s representative. Moving quickly and knowing how to negotiate with a purpose is what will get buyers into the home of their dreams.
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Supply & Demand
Inventory by Price Range