When it comes to buying or selling a home there are many factors that you should consider. Where you want to live, why you want to buy or sell, and who will help you along your journey are just some of those factors. When it comes to today’s real estate market, though, the top two factors to consider are what’s happening with interest rates and inventory.
The average home loan rates hit 5% recently (a seven-year high). Interest rates impact real estate markets and history shows that interest rates tend to hit their highs shortly after property values peak. Although interest rates are slightly higher, buyers are locking in rates lower than they will be in the future. While home prices have appreciated over the course of the last decade, increases are more likely the result of inventory. Supply hasn’t been able to keep up with demand, which has helped increase prices, albeit slightly. In many markets, upper-end values have flattened out and some are even declining. This is a trend to watch as we move further into the fall and winter months.
In Grosse Pointe, inventory levels dipped slightly compared to the prior month but is up 7% compared to last year. August new pending’s and closed sales were both off slightly from both the prior month and the same month last year. New pending’s in Grosse Pointe averaged 35 days on the market. In addition, Grosse Pointe’s middle and upper-end markets continue to expand while entry-level markets continue to shrink.
Oakland County has seen inventory levels continue to rise month over month and are 4% higher than last year. August new pending sales were 14% higher than last year. Year-to-date, closed sales were down 6% from last year, however, average sale price went up 6%. Lower-end markets continue to shrink while sales in the $400,000—$800,000 market rose 8%. The average days on market for August new pending sales was only 39 days.
Inventory in Macomb jumped 14% from the prior month but was even with the same time last year. August new pending’s were up 3% compared to both the prior month and prior year. Year-to-date closed sales were down 6% while average prices increased by 6%. Average days on market for August was just 30 days.
Realtor.com has crowned Kentwood, Michigan, as the “Hottest” ZIP code in the entire country. Located in West Michigan about 15 miles outside of Grand Rapids, Kentwood has a median listing price of $193,168. Homes are selling quickly lasting only 14 Days on Market, a key indicator of how hot a market is. Kentwood is a family-orientated community with a lively art, dance and music scene. The site reports that Millennials are driving the hottest markets, with the younger generation responsible for the nearly 10% increase in how fast homes are sold in the most popular areas of the country. Look to the more than 60 craft breweries in the surrounding Grand Rapids’ area as a sure sign the Millennials have moved in.
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Supply & Demand
Inventory by Price Range