It’s a bit too early to announce a definitive trend, but, historically-the combined October and September sales have been a reasonable indicator of the upcoming year (in this case a post tax credit market). Although less than last year, unit sales still showed a reasonable pace (close to 2006 levels), with sales values holding steady since the spring, down about 40% from 05' peak values. It is still a Buyers Market at over 5 month supply; yet, the number of homes available for sale continues to shrink, helping move us towards stability (Yay!)
Nationally, both NAR (National Association of Realtors) and the Mortgage Bankers project an increase in the number of homes sold in 2011 over 2010 based on continued low interest rates, affordable home prices as well as an improving economy. They also say that values will continue to settle downward and bottom out next year. With that said, remember that real estate is local, not national.
The various markets across the country will recover at different rates. In general, the Midwest, including Michigan, seems to be faring better than the South and the West. However, we must be more cautious about growth in the number of sales next year, considering we had a 10% boost this year from the tax credits. Our data indicates most markets have shown a stable and even slightly rising value trend however, even in markets that continue to settle downward, it may not be significant enough for Buyers to delay purchasing, since any rise in interest rates will off set any savings from a potential price decline.
Also on the positive side, the latest Comerica economic activity report continues to move in the right direction since bottoming out in January of last year. Economic activity and hiring is slow, but it is still moving in the right direction.
With generally better news about the direction of the market in the past nine months, should Sellers be expecting the same in terms of rising values and offers? We are not quite there yet, however there is a growing pent up demand from buyers. In many cases, aggressively priced homes in good, updated condition are getting multiple offers and selling quickly. These homes represent less than 30% of the market and for the most part are priced below their competition. The rest are typically priced or "conditioned" out of the current Buyer demand.
Feel free to pass this information on to anyone that is interested in our current market conditions
As always, please contact me if you have any questions or would like to discuss your specific needs.
Thank you and have a fun-family-friend & memory-filled Thanksgiving!
Conne
Conne Terova
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