It’s a great time to sell. So why is there a home inventory crisis?
Real estate in much of Michigan is a seller’s market.
That’s what we hear from Realtors.
It’s what we hear from sellers, who may have listed property for one day before receiving multiple offers.
And it’s the same story from buyers, who find themselves in feverish competition when a new listing enters the market.
Neighbors also see it, in the form of nearby sales prices pushing up the market prices.
Here is what I learned when I asked about why there are not more houses on the market.
— Paula Gardner, MLive.com Business and Automotive Reporter
Forty-six communities in Southeast Michigan now have average days on market of 35 or less. Similar numbers are generated in West Michigan. Grand Rapids, for example, had an average of 23.9 days on market.
At the same time, list prices are going up. So are sales prices. In Washtenaw County, the list price went up 7.2 percent in May, while the sales price went up 8.5 percent.
More notably, perhaps, is the raw numbers behind the percentage increases in that community, home to Ann Arbor and the University of Michigan: They are less than $500 apart. In coming months, the average sales price could top the list price, making “over list” the norm across the market area.
All of that is happening as the number of listings falls.
This isn’t new. We’ve been hearing about the decline in new listings since the Great Recession, when the opposite was true. But in the past two to three years, as Michigan’s real estate market sees the cumulative effect of that, the number of listings just keep falling.
REALCOMP, the multi-listing exchange serving Realtors across Southeast Michigan, reported that 35.8 fewer homes were listed in May than a year earlier.
(Shown in the photo: A home in Shelby Township priced at $340,000 that had eight showing requests in three days on the market.)
As of late June, 80,000 homes were for sale in Michigan, according to Zillow.com. That includes by agents and owners, as well as new construction.
But, experts said, overall numbers are deceiving. Any listing that’s more than 3-6 months old likely won’t sell at the listed price or condition.
The National Association of Realtors says the critically low inventory levels in much of the country “somewhat sidetracked” the housing market this spring.
“Monthly closings have recently been oscillating back and forth, but this third consecutive decline in contract activity implies a possible topping off in sales,” said Lawrence Yun, NAR chief economist, in a news release.
“Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”