June 2011 Real Estate Market Update
Listening to the media reports can get you very confused about the direction of the real estate market. Most show the market continuing to decline. Much of that is a result of comparing this year, without the benefit of Tax Credits, with last year, which was artificially fueled by the Tax Credits. The market is certainly improving, but until May, had not improved enough to make up for the effect of those Credits. However, in both May and June, sales activity has picked up dramatically (shown by increased pending sales numbers and property showing appointments) and is at a pace to exceed last year's sales rate.
Southeast Michigan continues to lead the country in the housing recovery. That does not mean the market is jumping off the map, but we are seeing more sales activity than we had expected at this point in the recovery. Make no mistake, regardless of what you see in the media, the housing recovery has officially begun, to the best of our estimates it began coming off the bottom this winter. The question that time will answer is; is this current activity boost a long-term movement or the initial rush of water after the dam breaks? It is logical that after a five year hold back, there are thousands of consumers anxiously waiting to buy or sell, so each step of positive economic movement will bring another bunch of buyers and/or sellers into the market.
What does all this mean for pricing and appreciation? As we have been saying all year, the first stage of recovery is increased activity and sales, the next is appreciation. We are seeing strong evidence that homes that are updated, in good condition and price competitively are selling for more than what they would have received last year. However, there are still plenty of homes in poor condition or with design obsolescence that are still requiring a discount to attract buyers, which continues to bringing the overall market averaged down.
The number of homes available for sale continues to fall, which will help push up home values, so as a seller, it is a great time to test the waters in terms of home value. For buyers, the market has moved away from the super discount deals, but home values, even for the best homes attracting multiple offers, are still at 14 year lows. For a buyer, with prices so low and interest rates seeming to be holding steady at near record lows it is easy to feel you can sit on the fence and wait. However, many buyers are finding that those perfect homes are selling in days so waiting will leave a buyer with mainly outdated and over priced homes to choose from.
For more positive news about Michigan and Detroit I though you might enjoy an article from the New York Times about the metro area. http://nyti.ms/iAPgCi
The best evidence of a housing recovery are our June sales, a record month for our family of companies (2,081 transactions) and the most for any broker ever in the state of Michigan in one month!! Thank you for all of your extra effort. Each transaction today requires an extra level of service so your time and commitment is especially appreciated!
Here are our numbers for June, pretty cool stats - the showing appointment numbers are particularly strong, at over 19,000, a good sign for July and August sales!
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Monday, July 25, 2011
June 2011 Real Estate Market Update
Posted by Suzanne OBrien at 11:58 AM
Labels: 2011 Expert Advice, Business Plan, Detroit Area Home Sales, Michigan Realtors, Real Estate, Real Estate Coaching, Real estate news, Real Estate Trends, Realtor Training, Social Media Success
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Greetings Suzanne, Just wanted to comment regarding your assetment of all of the appointments for showings. I have shown a client more than 35 homes. He has made 6 offers for homes that were declined. He is attempting to purchase a home on a land contract with $25,000 down payment. He is involved in a short sale on his condo which has a mortgage balance of $135,000, but, they are now selling for $60,000. Naturally this has affected his credit score.
The point I am making is, that a lot of the appointments do not really indicate that the market is picking up.
Best to you, RCH
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