Home prices at historic highs, inventory still a concern for 2022

By David Fleet
Higher mortgage rates, rising home prices and housing inventory issues will continue to be the trend for much of the country including Southeastern Michigan for 2022.
While the pandemic has sent shockwaves through schools, workplaces and the lives of millions—the fallout in the real estate market was not spared.
From inventory to prices to mortgage rates whether a buyer or seller, the pandemic-era housing market continues to be ever changing. According to reports from Realcomp released last week for the 48462 area code, which includes sections of Atlas, Brandon and Groveland townships within The Citizen’s readership area the historically low inventory of existing homes which has created a highly-competitive seller’s market is expected to continue into the new year.
The average price for homes now sits almost $100,000 higher than the previous high 17 years ago, said Jason Gault, REO-Ortonville.
“In short, prices are up,” said Gault. “The December 2021 average sales price is up approximately 16.7 percent to $333,224 from the December 2020 average of $277,614– these are historically high numbers.”
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. That average dropped to an average low of $121,000 in January of 2010. Now, in December 2021 that average sales price climbed to $333,000.
While the prices continue to soar in the pandemic era—inventories have tumbled a trend that started years earlier, he said.
“The number of homes for sale is down,” he said. “The December 2021 number of active homes for sale is down about 36.7 percent from December 2020. The monthly supply of homes for sale is down from December 2020 with a 2.1 months of inventory to December 2021 currently at 1.3 months of supply.”
Michael Stoskopf, CEO of the Home Builders Association of Southeastern Michigan reported single-family permits continue to remain steady.
“Consistency in new home permits has been key to making 2021 successful for builders,” said Stoskopf. “Even in the face of on-going supply chain challenges. It can be tough for builders if they cannot keep their trade subcontractor base consistently busy.”
Based on residential permit data compiled by the Home Builders Association of Southeastern Michigan a total of 308 single-family permits were issued in Macomb, Oakland, St. Clair and Wayne counties for November 2021. That number dipped to 213 single-family home permits in December 2021.
With the decline in December a streak of 300 plus permits ended at 18 months, Stoskopf reported. Oakland County topped the four county area with 1,978 single-family home permits in 2021.
Gault said many factors, seem to point to continued pressure on buyers, historically high prices and low inventory levels.
“That said, the rate of growth in prices should slow and may stall and flatline as interest rates increase and reduce the overall purchasing power of prospective home buyers,” he said. “Things to watch: mortgage rates, new housing starts and the federal reserve’s reaction to increasing inflation.”

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