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HOUSING REPORTSOUTHEAST MICHIGAN | MARCH 2019

MARCH 2019HOUSING REPORT

Southeast Michigan

Inventory levels continued to decline through January in most Southeast Michigan markets. Sales activity (showings and new pendings) generally fell off in February compared to the prior month, yet closed sales were up 10%.

Heading into March, closed sales were remarkably even with last year (5,651 vs. 5,654). Values continue to rise, but at a slower rate than we’ve experienced over the past several years. Closed volume has been up in all local markets except the Macomb County and Detroit Condo markets.

Entry level markets continue to shrink (declining inventories and sales) while upper-end markets expand.

Developers have generally been focused on the luxury markets. As a result, upper-end markets are getting saturated with inventory. Although luxury sales were up last year, values showed signs of plateauing and even dropping in many areas.

While market conditions are generally shifting in a direction less favorable to sellers, the movement isn’t necessarily favoring buyers either. As prices, interest rates and property taxes continue to rise, many potential buyers are getting completely priced out while other buyers won’t be able to afford the same home they could have purchased a year or two ago.

Although prices are increasing at a slower rate than they were, they continue to rise in most markets. Interest rates, which had a slight downward adjustment, are expected to continue to rise over the long term. Additionally property tax assessments (which generally lag a year or two behind values) will be on the rise for a couple years, even after prices level. For anyone thinking of buying or selling in the next few years, moving sooner rather than waiting would be wise.

Market Overview

Opportunities

Sellers: At any give price, more buyers can afford to purchase a home today than later this year or next year. There is a shortage of affordable move-in-ready homes. Buyers will still pay a premium to be able to move into nicely finished homes. As most sellers need to purchase a replacement property, the “buyer advantages” are also relevant to most sellers.

Buyers: Prices, interest rates and property tax assessments will all continue to rise this year. If you are planning to move in the next couple of years, you may want to think about doing so sooner rather than waiting. Many younger buyers are delaying their move while saving to build up a larger down payment. For most buyers their target home is moving out of reach faster than they can save. Talk to your lender. Many younger buyers strapped with school debt are also getting help from family members. Without being reckless, it may be a wise financial move to lock into a new home before it moves further out of reach.

Copyright 2019, Real Estate One


$100

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May '17 Aug '17 Nov '17 Feb '18 May '18 Aug '18 Nov '18 Feb '19

Closed Single-Family Home Sales

Summary

Data source: Realcomp MLS using Great Lakes Repository Data.

5,651YTD CLOSED SALES

even with last year

$213KYTD AVG SALE PRICE

+3% from last year

9,215AVAILABLE HOMES-6% from last month

3,406NEW PENDINGS

-8% from last month

$129YTD PRICE PER SQ FT

+4% from last year YTD Closed Volume: $1.2B (+3%)

LISTINGS $/SF

Southeast Michigan

YTD Closed Activity

YTD Closed Change YTD $/SF Change

All 5651 0% $129 4%

$10k - 150k 2313 -7% $78 4%

$150k - 250k 1654 5% $130 4%

$250k - 500k 1398 5% $145 2%

$500k + 286 7% $206 2%

SummaryBoth inventory and new pendings declined in February compared to the prior month. Closed sales were up from the prior month and YTD closed sales were nearly identical (5,651 vs. 5,654) with last year. YTD average price and price per square foot were up 3% and 4% respectively. Rising prices, interest rates and property taxes will continue to challenge both buyers and sellers. Buyers will compete and pay a premium for move-in-ready homes. For those planning to buy or sell this year, options and opportunities will be greatest for those who get an early start.

Listings Change New Pendings Change Months Supply Change

All 9215 -6% 3406 -8% 2.7 2%

$10k - 150k 3422 -5% 1416 -8% 2.4 3%

$150k - 250k 1467 -12% 1005 -5% 1.5 -8%

$250k - 500k 2733 -6% 846 -7% 3.2 0%

$500k + 1593 3% 139 -25% 11.5 37%

Monthly Activity



Oakland CountySingle-Family Homes


even with last year


+1% from last year


1,157NEW PENDINGS

+1% from last month


+3% from last year

Closed Sales

$120

$130

$140

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$160

$170

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1,500

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LISTINGS $/SF


Monthly Activity

YTD Closed Activity


All 2890 -7% 1171 1% 2.5 -8%

$10k - 200k 501 -15% 398 -7% 1.3 -8%

$200k - 400k 978 -14% 529 1% 1.8 -14%

$400k - 800k 1029 1% 208 20% 4.9 -16%

$800k + 382 -2% 36 9% 10.6 -10%


All 1732 0% $156 3%

$10k - 200k 653 -3% $115 7%

$200k - 400k 763 2% $147 3%

$400k - 800k 266 3% $173 4%

$800k + 50 4% $302 0%

Inventory continued to decline last month, but February new pendings were up slightly. February closed sales were up 17% compared to both the prior month and February of last year. Expect monthly closed sales to continue to rise as the market moves into spring. YTD closed sales have been even with last year. Both average sale price and price per square foot have been up slightly. Expect values to continue rising (but at a slower pace) in the entry and mid-level markets. The number of upper-end sales will continue to grow, but expect upper-end values in most markets to level off or even drop slightly.

Summary

YTD Closed Volume: $509M (+1%)



BirminghamSingle-Family Homes


55YTD CLOSED SALES

+22% from last year


+15% from last year

146AVAILABLE HOMES-1% from last month

22NEW PENDINGS

-4% from last month


+15% from last year

Closed Sales

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$240

$280

$320

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60


LISTINGS $/SF

Monthly Activity

YTD Closed Activity


All 146 -1% 22 -4% 6.6 3%

$10k - 400k 11 -15% 5 -17% 2.2 2%

$400k - 800k 57 8% 9 0% 6.3 8%

$800k - 1.4m 49 0% 4 33% 12.3 -25%

$1.4m + 29 -12% 4 -20% 7.3 10%


All 55 22% $320 15%

$10k - 400k 15 -25% $236 1%

$400k - 800k 22 83% $241 1%

$800k - 1.4m 8 0% $342 40%

$1.4m + 10 100% $427 -1%

While inventory and new pendings were down slightly from the prior month, year to date closed sales, average sale price, price per square foot and closed volume have all gone up significantly from a year ago. Sales have been up 22%. Values have been up 15%. That combination has closed volume up 41% compared to the first 2 months of last year. This strong early start has been driven by a few extra luxury sales —10 this year compared to 5 in the first two months of last year.

Summary




Macomb CountySingle-Family Homes


-6% from last year


+1% from last year

1,589AVAILABLE HOMES

-10% from last month

863NEW PENDINGS

+14% from last month


+5% from last year

Closed Sales

$90

$100

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$130

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800

1,200

1,600


LISTINGS $/SF


Monthly Activity

YTD Closed Activity


All 1589 -10% 863 14% 1.8 -20%

$10-125k 319 21% 220 48% 1.5 -18%

$125-225k 372 -22% 344 5% 1.1 -25%

$225-400k 495 -19% 243 -4% 2.0 -16%

$400k+ 403 0% 56 81% 7.2 -45%


All 1216 -6% $120 5%

$10-125k 339 -22% $74 2%

$125-225k 517 2% $120 4%

$225-400k 306 10% $133 3%

$400k+ 54 -29% $160 9%

Inventory fell off slightly with new pendings out-pacing the arrival of new listings. Closed sales in the first two months of the year were 6% behind last year. YTD values have been up slightly. The $188k average sale price was up by $2,500 from a year ago and average price per square foot has been up $6. Buyers in the entry-level price ranges will continue to compete with multiple offers for a limited number of affordable move-in-ready homes. Getting in place sooner rather than waiting could be advantageous for anyone planning a move.

Summary

YTD Closed Volume: $229M (-5%)



Wayne CountySingle-Family Homes


+1% from last year


+4% from last year


1,370NEW PENDINGS

-4% from last month


+4% from last year

Closed Sales

$80

$90

$100

$110

$120

$130

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1,200

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LISTINGS $/SF


Monthly Activity

YTD Closed Activity


All 3822 -3% 1370 -4% 2.8 1%

$10-100k 1990 0% 499 -13% 4.0 15%

$100-200k 800 -14% 564 8% 1.4 -20%

$200-400k 597 -1% 246 -7% 2.4 6%

$400k+ 435 2% 61 -14% 7.1 19%


All 2166 1% $106 4%

$10-100k 818 -6% $48 1%

$100-200k 800 8% $110 3%

$200-400k 441 5% $137 5%

$400k+ 107 3% $164 0%

Heading into March, inventory was down from the previous month. February new pendings were also down from the prior month but up 3% compared to the same month a year ago. Through the first two months of the year, closed sales were slightly ahead of last year’s pace and values (both average price and price per square foot) were up 4%. While inventory is up 23% compared to a year ago, there continues to be a shortage of affordable move-in-ready homes in the entry and middle price ranges. To maximize their opportunities, both buyers and sellers who plan to move this year would be wise to get an early start.

Summary




DetroitSingle-Family Homes

534YTD CLOSED SALES

-1% from last year


+3% from last year


384NEW PENDINGS

-9% from last month


+7% from last year

Closed Sales

$10

$20

$30

$40

$50

$60

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50

100

150

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250

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LISTINGS $/SF


Monthly Activity

YTD Closed Activity


All 1778 -1% 422 21% 4.2 -19%

$5-30k 604 -1% 150 21% 4.0 -18%

$30-100k 930 -3% 201 16% 4.6 -16%

$100-200k 153 8% 51 46% 3.0 -26%

$200k+ 91 -7% 20 25% 4.6 -26%


All 274 -3% $48 -1%

$5-30k 113 -14% $16 -5%

$30-100k 120 14% $43 8%

$100-200k 28 40% $89 20%

$200k+ 13 -48% $111 4%

Summary


Heading into March, inventory was just short of even with the prior month. While new February pendings fell off from the prior month, they were 13% higher than the same month a year ago—sales nearly tripled in the $100-$200k price range. February closed sales dropped 18% from both the prior month and the same month last year. YTD, sales are just short of where they were a year ago, but values continue to rise. YTD closed volume for single family Detroit homes is up 2% from a year ago. Looking ahead, expect a continued shortage of move-in-ready inventory.



DetroitCondos/Lofts

32YTD CLOSED SALES

-47% from last year


+2% from last year

185AVAILABLE CONDOS

+3% from last month

25NEW PENDINGS



-10% from last year

Closed Sales

LISTINGS $/SF

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Monthly Activity

YTD Closed Activity


All 185 3% 25 32% 7.4 -21%

$10-100k 25 -14% 3 0% 8.3 -14%

$100-200k 35 52% 3 0% 11.7 52%

$200-400k 73 1% 6 20% 12.2 -16%

$400k+ 52 -5% 13 63% 4.0 -42%


All 32 -47% $200 -10%

$10-100k 9 -25% $43 -46%

$100-200k 6 -45% $177 18%

$200-400k 10 -60% $216 0%

$400k+ 7 -42% $294 -15%

SummaryDespite a 76% increase in available inventory compared to a year ago, Detroit condo/loft sales have been down 47%. Sellers of upper-end existing resale units face increasing competition from new development units. Twenty-two of the upper-end units available on March 1st were new construction units that had never been lived in—many had not yet been completed. It is likely that some of the decline in sales was a result of buyers waiting for new units to be completed.

YTD Closed Volume: $8.4M (-45%)



Grosse PointeSingle-Family Homes

103YTD CLOSED SALES

+7% from last year


+2% from last year


57NEW PENDINGS

-11% from last month


+3% from last year

Closed Sales

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$130

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$180

0

25

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75

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LISTINGS $/SF


Monthly Activity

YTD Closed Activity


All 159 -8% 57 -11% 2.8 3%

$10-200k 7 -63% 12 -14% 0.6 -57%

$200-350k 34 -38% 27 -21% 1.3 -22%

$350-700k 69 19% 14 8% 4.9 10%

$700k+ 49 20% 4 33% 12.3 -10%


All 103 7% $152 3%

$10-200k 18 -36% $125 2%

$200-350k 55 49% $149 8%

$350-700k 25 -11% $157 -3%

$700k+ 5 67% $175 -2%

Heading into March, inventory was still declining and February new pendings were down 11% compared to both the prior month and prior year. YTD closed sales were up 7% and values were up between 2% and 3% through the first two months of the year. Look for a continued shortage of move-in-ready homes in the entry and middle markets. Buyers will be competing to grab those updated listings as they become available. Options and opportunities will be greatest for both buyers and sellers who get an early start this year.

Summary




DownriverSingle-Family Homes

488YTD CLOSED SALES

-1% from last year


+15% from last year


337NEW PENDINGS

+2% from last month


+8% from last year

Closed Sales

$60

$70

$80

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LISTINGS $/SF


Monthly Activity

YTD Closed Activity


All 649 -8% 337 2% 1.9 -9%

$10-75k 116 -5% 45 18% 2.6 -20%

$75-125k 197 -4% 116 5% 1.7 -8%

$125-250k 197 -16% 140 -3% 1.4 -14%

$250k+ 139 -1% 36 -5% 3.9 4%


All 488 -1% $104 8%

$10-75k 85 -30% $58 4%

$75-125k 154 -6% $92 0%

$125-250k 190 10% $110 1%

$250k+ 59 59% $135 6%

Heading into March, inventory was down 8% from the prior month, but both February new pendings and closed sales were up. Through the first two months of the year, closed sales were down slightly but values have been up. The $147k average sale price took a $19k jump from a year ago. Closed volume in the Downriver market has also been up 13%. While the entry level markets continue to shrink, sales in both the $125-250k and the over-$250k markets continue to expand. There were 22 more over-$250k sales in January and February of this year than there were in the same period last year.

Summary




Livingston CountySingle-Family Homes

299YTD CLOSED SALES

+17% from last year


+13% from last year


190NEW PENDINGS

+5% from last month


+5% from last year

Closed Sales

$80

$100

$120

$140

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$180

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LISTINGS $/SF


Monthly Activity

YTD Closed Activity


All 480 -2% 190 5% 2.5 -7%

$10-200k 61 0% 30 -12% 2.0 13%

$200-300k 132 -14% 80 1% 1.7 -15%

$300-500k 187 -3% 68 17% 2.8 -17%

$500k+ 100 20% 12 20% 8.3 0%


All 299 17% $148 5%

$10-200k 61 -20% $121 6%

$200-300k 120 8% $141 4%

$300-500k 98 66% $150 -2%

$500k+ 20 100% $198 3%

Moving into March, inventory was down slightly from the prior month. Both February new pendings and closed sales, however, were up compared to both the prior month and the same time last year. YTD sales are 17% ahead of last year and average price has been up 13%. Through the first two months of the year, Livingston County closed volume was up by 32% from a year ago. While this year has gotten off to a quick start, the rate of price increases is expected to level off. Prices in most markets are expected to level off. To maximize their opportunities, both buyers and sellers who plan to move this year would be wise to get an early start.

Summary




St. Clair CountySingle-Family Homes

238YTD CLOSED SALES

even with last year


+6% from last year


149NEW PENDINGS



even with last year

Closed Sales

$80

$90

$100

$110

$120

0

50

100

150

200

250

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LISTINGS $/SF


Monthly Activity

YTD Closed Activity


All 434 -5% 149 33% 2.9 -28%

$10-100k 72 -9% 39 11% 1.8 -18%

$100-200k 139 -5% 52 13% 2.7 -16%

$200-400k 164 -6% 54 86% 3.0 -50%

$400k+ 59 9% 4 100% 14.8 -45%


All 238 0% $98 0%

$10-100k 69 -10% $55 -2%

$100-200k 97 -15% $95 -3%

$200-400k 72 80% $125 4%

$400k+ 0 -100% - -

Inventory slipped slightly compared to the prior month but remains 12% higher than the same time last year. Both new pendings and closed sales took big jumps in February—new pendings were up 33% from the prior month and closed sales were up 70% compared to both the prior month and the same month last year. Through February, both average sale price and closed volume for St. Clair County were up 6%. Looking ahead, expect a continued shortage of affordable move-in-ready homes in the entry and mid-level price ranges. To maximize their opportunities, both buyers and sellers who plan to move this year should get an early start.

Summary



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