Local real estate, prices soar, inventory low

By David Fleet
Editor
Area home sales jumped in southeastern Michigan from January 2016 through so far in 2019 according to data released last week by Realcomp II. Median home values were up from $174,000 to $210,000 in the area which includes the Goodrich/Atlas Township, Ortonville/Brandon Township areas.
Realcomp is Michigan’s largest multiple listing service, now serving more than 16,000 broker, agent, and appraiser customers in more than 2,500 offices across Southeast Michigan.
Since August 2018 the change in median sales prices for residential and condos has jumped 5.6 percent while the inventory has dropped by 10.2 percent in the same southeastern Michigan market.
“The biggest issue right now is inventory—homes just don’t stay on the market,” said Atlas Real Estate Owner/Broker Jeff Dawley, 3491 S. State Road, Goodrich. “The price (increase) is all a factor of a lack of inventory. This trend has been going on more than three years. We have seen a reduction inventory that’s lead to stronger price and shorter days on the market.”
“It’s still a great time to sell a house, prices are strong and there are plenty of buyers for the few homes out there,” added Dawley. “But it’s also a great time to buy since interest rates are so affordable. They (rates) are under 4 percent for 30 years fixed, these rates are comparable to 1966. Overall our listings don’t stay on the market very long. Multiple offers are not uncommon and from time to time sellers are getting more than asking price.”
Mortgage rates are based on the 10 year bond. On July 31 the Federal Reserve cut interest rates 25 basis points for the first time in over a decade. The drop in prime rates can impact mortgage, home equity loans, credit cards, student loan tabs and car payments. There are still great incentives to buy with little money down, he said.
“That drop will not impact existing mortgages, it’s not a direct correlation to interest rates,” he added. “But we are seeing refinancing of mortgages gong on right now as rates have been slipping.”
The inventory issue will not go away anytime soon, he added.
“They have not built a lot of new homes over the last 10 years,” he said. “You just can’t catch up in the building trades real fast. We are, however selling new construction going on but still it’s a slow process. The market fundamentals are such that unless something dramatic happens in the economy I foresee low inventory for a while.”