If you have been shopping for a home at all in the last year, you know the selection of homes is very slim. There competition for homes is fierce because there is so little to pick from. One could say it is a jungle out there, but the better description is a desert.
An article in the April 17, 2017 edition of the Macomb Daily featured some staggering statistics from the Realcomp MLS about how 2017 is comparing to 2016 in terms of home prices and the inventory across the tri-county area:
- In Macomb County, average prices increased 5.4 percent, listings dropped 54.8 percent and days on the market before sale decreased 4 percent.
- In Oakland County, average prices jumped 9.3 percent, listings fell 39.7 percent and days on the market are down 14.5 percent.
- In Wayne County, excluding Detroit, average prices rose 14.7 percent, listings were down 45.1 percent and days on the market decreased 17.3 percent.
What this means for our area market is that we are at a 20-year low for inventory. There is a “perfect storm” occurring which is causing prices to inflate almost as fast as buyer frustrations. There are many causes of this low supply of home on the market:
- People that previously lost homes due to foreclosure or short sales are now getting to the point where they can obtain financing again and they are vying for the same properties as first time home buyers.
- Baby boomers are staying in their homes and not downsizing as was done by previous generations.
- People that own homes currently don’t see anything to buy that would be the “perfect home” to replace the one they have because the inventory is low.
- New construction has not caught up to the demand and are also not building homes within the budgets of many first time buyers.
So, if you have a home to sell, now is a great time to get it on the market. The trouble might be in finding something to replace it. For home buyers, patience and the strongest offer you can afford are the only things you can count on in this insane market. There really is no quick fix for the current market conditions unless we get an influx of inventory to match the current demand. All indications are that this market is going to be around for a while.