With the peak home buying season in full swing, real estate experts say home buyers should brace for a competitive environment as the supply of homes for sale remains low despite healthy price increases.
Starting with the city of Detroit, where home prices have risen faster than income growth in the past five years, the combination of low housing supply and increasing demand is driving home values ever higher. Now, homeowners who rode out the bad times during the recession and those that bought at the bottom of the market are starting to reap their rewards as Detroit’s median home sale prices have risen 275% over the past five years. In addition, Wayne County median home sales rose 95%, while Macomb’s rose 54% and Oakland’s 43%. The upward trend reflects the continued high competition, as the number of listings drop. The average number of days on the market in Detroit is down to 25 and nearly 90% of houses have been selling for above asking price. A year ago, there was approximately a 2.9-month supply of houses for sale in metro Detroit. That has declined to a supply of 2.2 months.
Oakland County saw home prices increase 7.7% last month, the largest percentage increase in southeast Michigan. The county's median sales price is $280,000, which is $3,100 more than the national average. At the end of July, 1,654 homes were sold in Oakland County, which represented a 11.5% decrease from a year ago. Many are pointing to the lack of inventory as one of the main factors driving up home prices and negatively affecting the number of homes sold. In Macomb County, the 'days on market' average is 27. That's three days faster than just a year ago.
Grand Rapids home sales ended last month with a total of 1,182 homes sold. That is a 2.3% increase from the previous month. The average for sale price of homes in the Grand Rapids area is $351,000, which represents a decrease of 2.2% from the previous month. The total number of homes available this month is 1,628, which is up 17.7% compared to the previous month. These homes are staying an average of 52 days on the market, unchanged from last month.
Grand Rapids has been ranked the fifth best city in the country for first-time homebuyers, according to a report published yesterday by WalletHub. Additionally, the city is ranked #17 in affordability, #18 in real estate and #142 in quality of life.
Houses are selling fast, and not many more are coming on the market. With the competitive market we are in, a lot of focus has been put on the buyer. The two most important things for a seller to remember is to price their home correctly and to make sure that they're available for showings. Showings have to be convenient for buyers and Realtors. Even though it's a seller's market, sellers still have to be smart.
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