Area home prices level, inventories raise as jobs, infrastructure coming

By David Fleet
Ortonville — A mix of economic factors sparked by a surge in interest rates to planned infrastructure upgrades to population increases could provide a dynamic real estate market in the coming year.
According to reports from Realcomp released last week which includes sections of Atlas, Brandon and Groveland townships within The Citizen’s readership area, home prices remained level, however, home inventory jumped as did days-on-the market.
The 12-month average sales price in The Citizen readership area rose slightly by 0.6 percent, from $333,224 to $335,139. In contrast, the prior year showed a 20.5 percent increase, $276,532 to $333,224.
The average price for homes remains almost $100,000 higher than the previous high 17 years ago. In historical context, the market peak price prior to the mortgage meltdown was at the end of 2004. At that time the average home sales price in The Citizen reader area in December 2005 was about $235,000.
Interest rates are a large  factor in the market leveling-off. At the end of December 2021- a 30 year fixed rate averaged 3.11 percent just 12 months later the 30 year fixed average was 6.42 percent, according to U.S. News and World Report.
“Currently, average sales prices continue to remain flat to a slight decline,” said Jason Gault, Real Estate One-Ortonville. “The number of homes for sale and the days it takes them to sell are both increasing, with the larger increase being in the number of homes for sale. The market still favors sellers, but it is edging towards a balanced market with a 4-6 months supply of homes.
The inventory rose 46.7 percent from 1.5 months to a 2.2 months supply. The prior year period had registered a 28.6 percent decline, 2.1 months to 1.5 months. For reference, 0-3 months supply is considered a “seller” market; 4-6 months supply is considered “balanced” and more that 6 months supply of inventory is considered a “buyers” market, according to Gault.
“So although 46.7 percent is a large increase, it is still considered a “seller” market, although we are continuing to trend towards a balanced market,” said Gault.
The 12 month average Days-on-Market increased 17.4 percent, from 23 days to 27 days. The prior year had registered a 45.2 percent decline, 42 days to 23 days.
“Locally, the expectation is that current trends will continue into the end of the year, with pricing and interest rates remaining steady,” said Gault.
Other economic factors could play a role in the housing market this coming year.

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