Real Estate Market Update and Trends for Ann Arbor and Surrounding Areas in Michigan
August 2015
The biggest overall trend for 2015 has been the awakening of the listing inventory. Even in Washtenaw, where inventories have been tighter than anywhere else in the state, there has been some relief for buyers, but mainly in the upper price ranges. So far this year has had more Home sales than 2014 and we expect that trend to continue this fall as well. The slow-down in under $250,000 segment this past month is a result of too few homes to buy, not a reduction in buyer demand. You can see that values jumped and “Days on Market” fell as a result of the inventory drop. The rest of the market followed a pattern seen across the rest of Southeast Michigan, with both rising sales and inventories. The bigger than anticipated jump in sales in June and July seems to be a result of buyers jumping in, anticipating a future interest rate increase, as well as reacting to a larger For Sale inventory. August activity, although still strong, has slowed a bit, possibly as a result of what would have been August business being pulled into June and July.
We track the number of visitors to our web sites as a way of anticipating future buyer demand. As the chart below shows, activity is equal to last year with a continuing upward trend, confirming that there is still strong buyer interest.
Home values continue to rise, but slowing from the crazy levels of 2013/14. Although not as geographically targeted, Case-Shiller tends to have the best data on true appreciation rates. The chart below shows the year over year value changes for SE Michigan, demonstrating that appreciation still healthy in the 5% range and also reflecting what we are seeing in Washtenaw as well.
Going into the fall, sellers will need to be aware that with inventories rising, home values will not move as much, and in those markets where inventories jumped quite a bit (mainly in the higher priced segments) values may decline for a short period of time until supply and demand balance again. A recent survey of home sellers showed that they have become more optimistic about the value of their home. The graphic below compares the seller’s opinion of value to their actual appraisal. Up until March of this year, the seller’s guess was less than their appraised value, but since March they have become more optimistic, with that optimism increasing each month. That combination of increasing value optimism by the sellers and an increasing For-Sale inventory is likely to cause many properties to be overpriced this fall and winter.
Please contact me regarding any of your real estate needs. I am happy to assist you.
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