Real Estate Update - February 2018
Throughout 2017, the dominant theme is more available homes are needed to satisfy buyer demand, which is expected to remain consistent throughout 2018. To help balance this, new home construction in the region has been increasing considerably. A recent report by the Home Builders Association of Southeastern Michigan (HBA) announced that 2017 was the best year for residential home construction in the region since 2006. Construction hot spots include South Lyon and Oakland Township. As result, market optimism should remain positive, especially among buyers as inventory levels start to slowly creep up again.
Last month total sales, average days on market and number of available homes across our Michigan market area were all down. The fact that the average number of days a home is on the market is decreasing, is an important element because when there is a big supply of inventory, it significantly affects days on market. However, all of these factors likely contributed to the rise in median prices across most communities.
The City of Detroit's assessed residential property values have risen for the first time in at least 17 years, with nearly 60% of residents seeing their 2018 assessments increase.
In Ann Arbor, the average listing and sales prices for single family homes have increased compared to a year ago. According to data released by the Ann Arbor Area Board of REALTORS®, the average residential listing price in January 2018 jumped 13.6% to $317,646, compared to $279,673 in January 2017. Average residential sales prices for January 2018 are up a staggering 15.6% at $313,361, compared to $271,131 in January 2017.
Mortgage rates will probably continue to trend upwards this year. Lawrence Yun, NAR chief economist, says "Another month of modest increases in contract activity is evidence that the housing market has a small trace of momentum at the start of 2018. Jobs are plentiful, wages are finally climbing and the prospect of higher mortgage rates are perhaps encouraging more aspiring buyers to begin their search now.”
With improving conditions for both buyers and sellers, demand and market listings will grow in 2018 indicating another strong year for our local housing market.
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