Our local real estate market remains very competitive for buyers who are out in force despite higher interest rates. There are just fewer homes available to buy so prices remain high although we aren’t seeing the increases of a year ago and homes can stay on the market for a little longer. Sellers are hesitant to take advantage of higher home values given they might have an existing 3% interest rate on their current mortgage. And even if they were willing and wanting to move, the competition when buying can be daunting.
Prices are off their Highs from Spring 2022 but Flat Year over Year and Still Strong
The chart above illustrates how price per square foot has dropped since the highs of Spring 2022. The data is monthly so you can see the changes month by month. Smoothed 12 month data which is typically shown would have hidden the spike in prices we saw during the Spring and early Summer last year. Values are still comparable to year over year levels and significantly higher than pre-Covid. Overall, prices remain strong for those planning to sell while buyers will have to compete for more desirable homes.
The Number of New Listings Remains Low
The number of New Listings continues to be low with no signs of change. With some sellers enjoying 3% mortgage rates, it’s a compelling reason not to sell. This combined with the competition to buy a home can make staying in your current home very attractive. The data above is smoothed over 12 months to remove the seasonality of new listings which swing dramatically every Spring and Fall unlike the first chart showing Price per Square Foot which isn’t affected by seasonality.
Showings Per Listing Have Dropped Significantly From the Peaks of 2022 but remain Strong
The number of showings per listing is one indicator of buyer demand. Last year, we saw buyer demand spike sharply and prices rose accordingly. Then showing activity dropped over the summer and we are now back to pre-COVID levels of showing activity. This combined with limited inventory means that a well presented, updated, and maintained home that is priced appropriately should still sell quickly and possibly with multiple offers.
Days on Market Remains Low But Starting to Increase
Day on Market has been low even before COVID but we are starting to see an increase over the past few months in the Plymouth-Canton school district (green line above) which has much more volume than either Northville or Novi. There are buyers out there but not every home sells right away with multiple offers. This is one small signal that we might be headed for a more balanced market in the future.
Percent of List Price Decreasing but still High
The Percent of List Price chart above (monthly data points) shows the spike of last last years Spring market frenzy. The trend is now lower but the Percent is still high and similar to pre-COVID levels. The market has cooled since last Spring but overall remains very strong.
In summary, the market is still a seller’s market with desirable, well maintained and updated homes with all the amenities garnering multiple offers while other homes might sell below asking and stay on market for longer. The market this year isn’t as frantic compared to this time last year so it is somewhat better for buyers except for the higher interest rates of course. With Spring just around the corner after a damaging winter, perhaps more new listings and a sense of balance are on the way.
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