The housing market in Michigan boomed last year. With low-interest rates, home buyers were hungry to get into a house, but with lower than usual foreclosures and low inventory, it was a dog-eat-dog market. We saw a little of everything. Homes were flying off the market; often sellers received offers within the first day of listing, and by the end of the first week, it was off the market. Sometimes the process was so difficult, inventory so low, and costs so high that more than a few home buyers decided to call off their search in 2021 and wait for the market to improve. Unfortunately, they may be waiting a while. Forecasters predict that 2022 will be more of the same.
Inventory
Low numbers of available houses on the market drove up prices and forced people to think about appraisal gaps, come up with a lot of cash upfront, and even forgo inspections. There will likely be more of the same as inventory continues to remain low. The National Association of Realtors reported that the number of U.S. homes for sale is 18% below July 2020. That means that home buyers will need to remain patient and tenacious to get into a home that they love and can afford. Likewise, it’s essential that they get the best agent possible as well as recognize that they are going to have to kiss a lot of frogs until they find a prince–meaning, they may have to make a number of offers on a number of houses until they find and get accepted by “the one.” While the market clearly favors the sellers, for buyers, interest rates are still low, which is good news.
2021 Michigan Housing Market Statistics
- Home prices were up 17% from 2020
- The median price was $235K
- Homes sold in approximately 7 days
New construction
If a buyer is looking for new construction, it is in short supply as well. While building and construction have resumed, a disrupted supply chain along with labor shortages has caused the completion of new construction to be much slower paced than demand. Likewise, the costs associated with building a new home have risen a great deal because of wage increases for labor and higher costs of materials. This trend is likely to continue.
Pricing
Last year, we saw prices soar and huge appraisal gaps develop (the value of the home is below the asking price and home buyers make up that difference). The good news for buyers is that while experts predict that prices will continue to rise, they aren’t predicted to soar outrageously in Michigan. Home seekers need to be willing to cast their location nets as far as possible in order to hit pockets like Huron County and Shiawassee County where home prices have actually gone down. In the city, it means looking at homes in areas that are your fifth and sixth choices and not your first and second.
Whether you are searching for your forever home or looking to sell, it’s important that you partner up with a real estate agent that knows the communities you want to live in and who has solid referrals. Equally important, you want someone who is all about helping you get what you want out of one of the biggest monetary transactions you will make. You need someone you can trust who isn’t just looking for a fast transaction. At 616 Realty, that is what the agents are all about; it’s all for one and one for all! And, not only can you find an agent that has everything you are looking for (communicative, hard-working, empathetic, tenacious, and knowledgeable) but because 616’s agents are a family, they believe in helping one another. Contact us for top-of-the-line, genuine service.