Traditionally, residential housing starts to slow in Southeast Michigan for two reasons: People become preoccupied by the holidays and all the planning that goes with making big meals and buying presents, and the weather and the related challenges of slogging through rain, sleet, snow and wind – sometimes all in the same day.
However, just as 2020 has been a year like no other, the Southeastern Michigan residential housing market is doing something special. It is still going strong through what real-estate experts describe as the “usual winter slowdown,” keeping home sales moving forward through incentives like lower-than-typical interest rates and a desire to have more work-from-home style abodes.
Home sales are up 10.6% in November compared to that same time period last year, and prices are up 14%, according to the latest housing report from RE/MAX of Southeastern Michigan. The report, which was released in late December, shows a residential housing market that has no signs of a slowdown come wild winter weather or holiday activities.
Some highlights from the November 2020 RE/MAX report include:
• Oakland County saw the largest jump in home sales at 13.7%.
• Macomb County saw the largest jump in home prices at 20.6%.
• The current median home sale price in metro Detroit is $244,625.
Jeanette Schneider, executive vice president of RE/MAX of Southeastern Michigan, noted that November’s kind gales were among the reasons why people kept house shopping.
“Mortgage rates reached new historic lows, and this had buyers out looking to find a home to take advantage of this financing opportunity,” Schneider said. “While we usually see a seasonal slowdown at this time of year, showing activity remained higher than last year across the metro Detroit area and pending deals are up 26% over last year. Add to this the favorable weather so far this season, and we anticipate this trend will continue, and we will end the year strong.”
This week marked the 15th record low for mortgage rates this year. The 30-year fixed-rate mortgage dipped further to an average of 2.67%, the lowest rate ever recorded by Freddie Mac, with records dating back to 1971.
“The housing market continues to surge higher and support an otherwise stagnant economy that has lost momentum in the last couple of months,” Sam Khater, Freddie Mac’s chief economist, said in Realtor Magazine. “Mortgage rates are at record lows and pushing many prospective home buyers off the sidelines and into the market. Homebuyer sentiment is sanguine and purchase demand shows no real signs of waning at all heading into next year.”
GMAR market trends
GMAR or the Greater Metropolitan Association of Realtors in Southfield’s Local Market Update for November 2020 covers the Greater Metropolitan Area of Detroit, including but not limited to locales in Lapeer, Macomb, Oakland, Washtenaw and Wayne counties.
According to the GMAR report, record-low mortgage rates reached “have provided encouragement for buyers to move forward on home purchases, which continued to remain strong overall for the month.”
GMAR said closed sales increased 11.8% for residential homes and 18.2% for condo homes. Pending sales increased 20.6% for residential homes and 19.5 % for condos. Inventory decreased 45.8% for residential homes and 28.2% for condo homes.
The Median Sales Price increased 15.4% to $210,000 for Residential homes and 10.9% to $183,000 for Condo homes. Days on Market decreased 19.0% for Residential homes but increased 20.0% for Condo homes. Months Supply of Inventory decreased 48.4% for Residential homes and 29% for Condo homes.
Showing activity remains higher than the same period a year ago across most of the country, suggesting that strong buyer demand is likely to continue into what is typically the slowest time of year. With inventory remaining constrained in most market segments, sellers continue to benefit from the tight market conditions.
RE/MAX market trends
Among the local market trends, home sales went from 3,749 in November 2019 to 4,146 in November 2020. That is slightly lower than October 2020, when 5,609 homes were sold. But it is still a solid showing for the month that includes Thanksgiving.
Median sales price was $214,499 in November 2019 and went up to $244,625 in November 2020 for Southeastern Michigan, the report said. In October 2020, the median sales price was slightly lower at $237,250.
Days on market – described as the number of days from the listing to the signed contract – went down eight day from 38 average days in November 2019 to only 30 days in November 2020. The average days on market for October 2020 was 36.
Months’ supply, an indicator of how many homes are available for sale, was down to 1.4 months in November 2020 compared to three months available in November 2019. The months’ supply stat for October 2020 was 1.2 month. A supply of six months is considered balanced, RE/MAX of Southeastern Michigan said.
Nationally, home sales are up 19.7% year over year based on data in 54 metro areas provided by RE/MAX of Southeastern Michigan. The median sales price was up 13.8% year over year to $292,000. The days on market was 36, down 13 days from last year. And the months’ supply of inventory was 1.8 months.