Home sales may be down, but that’s not because there aren’t enough buyers interested in housing – it’s because Metro Detroit and Southeastern Michigan as a whole just doesn’t have enough homes available for sale to meet current buyer demand, experts say.
RE/MAX of Southeastern Michigan Monday released its August Housing Report for metro Detroit. After seeing positive gains in July, year-over-year home sales fell in August. Sales are down 12.3 percent over last year.
Jeanette Schneider, executive vice president of RE/MAX of Southeastern Michigan, said a key indicator known as months’ supply of inventory is currently 2 months — the lowest level reported since March 2020 during the height of the pandemic.
“It is a lack of inventory, not a lack of buyers, that led to a decrease in year-over-year home sales during August. Buyers remain optimistic and active in the market looking for homes and are still competing with other buyers,” Schneider said. “Sellers are getting favorable price and terms and for those turning around to buy themselves find they have great purchasing.
“Election years tend to see a more pronounced slowdown in fall sales due to election uncertainty,” she added. “It won’t be surprising to see that dynamic happen as we get closer to November.”
Local-market trends show that there were 4,367 homes sold in August or a decline of 12.3% over August 2019 when 4,981 home were sold. That also is a decline from this July, when 5,015 home sold, the RE/MAX of Southeastern Michigan Housing Report showed.
Median sales price year over year was up 10.3% to $250,500 in August. The average days on market was up one day to 31 from the same time in August 2019.
Months’ supply at two months was down dramatically from August 2019 when there were 3.6 months worth of homes available. A supply of six months is considered balanced, RE/MAX of Southeastern Michigan said in its report.
Nationally, home sales are up 4.3% year over year. The median sales price was up 11.5% year over year to $290,000. The days on market was down four days to 41 on average from listing to a signed contract, the report also noted. Nationally, the months’ supply of inventory is 1.7 months.
GMAR – also known as the Greater Metropolitan Association of Realtors in Southfield – said in its August report that housing and stock markets continue to be the leaders in the economy. In August, showings and pending sales remained at strong levels while housing inventory remained limited, continuing the competitive bidding market Metro Detroit and Southeast Michigan has seen in recent months.
With the stock indexes at or near record highs as mortgage rates remain near record lows, signs point to a busy fall housing market, the GMAR report showed.
Closed Sales increased 4.5% for residential homes and 5.4% for condo homes. Pending sales increased 17.1% for residential homes and 27.1% for condo homes. Inventory decreased 41.4% for residential homes and 16.1% for condo homes.
The median sales price increased 13.2% to $215,000 for Residential homes and 8% to $182,250 for condo homes. Days on Market increased 5.7% for residential homes and 24.2% for condo homes. Months’ supply of inventory decreased 40.5% for Residential homes and 15.2% for condo homes.
“As we look toward the fall, we normally see housing activity begin to slow a bit as the back-to-school season begins, but this year is far from normal. While uncertainty remains on what effects the upcoming elections and any seasonal resurgence of COVID-19 may have on the financial and housing markets, the healthy housing demand we see today will create significant tailwinds in the near term,” the GMAR report said.
• New Listings: 12.6% decrease Y-O-Y from August 2019 to 12,003.
• Pending Sales: 18.3% increase Y-O-Y from August 2019 to 10,146.
• “New to Pending” Same Month Activity: 37.3% increase from August 2019 to 4,673. So, nearly 46% of the pending sales in August were also listed in August.
• Median Sales Price: 12% increase Y-O-Y from August 2019 to $209,500.
• Average Sales Price: 10.1% increase Y-O-Y from August 2019 to $248,692.
• Average Showings per Home: 66% increase Y-O-Y from August 2019 to nearly 11 showings.