Michigan’s real estate market is ‘absolutely crazy’ with far fewer homes
Price data represents sales via realtor advice, not all home sales. There may also be some overlap in sales calculations, in which more than one regional listing panel reports prices in some communities. However, the numbers are an indication of what’s going on in the state, real estate industry experts have said.
The price hike reflects “a strong housing market,” said Robert Dye, chief economist at Comerica Bank, with home sales reaching levels not seen since 2006.
Michigan tax collections reflect price increases: So far this fiscal year, property tax collections are 27% higher than a year earlier, joining taxes on motor vehicles and ticket sales lottery as a growing source of revenue for the state, according to the Senate Fiscal Agency.
Homeowners who choose to sell learn from real estate agents how to maximize prices. Al Block said it recommends setting a presentation period of just a few days with an offer deadline.
The best deal, he said, is not just a question of price.
Sellers are asking – and getting – potential buyers to forgo inspections, provide a guarantee to pay full price if an appraisal fails, or to allow a seller to live in a home for a period of time after closing. . Some potential buyers avoid lending altogether and offer cash.
The situation has led many experts to question whether the state is in a new pricing “bubble” that could collapse. Kage, of the real estate data service, said enough factors are different from 2007 and the Great Recession to suggest a bubble shouldn’t be happening this time around.
“I don’t know if we’re looking at that many (of buyers) who could fall into foreclosure,” Kage said, in part due to tighter lending restrictions over the past decade. “We should be OK, as long as interest rates stay low and the economy stays OK.”
Mortgage rates rose more than 3% in early March and economists predict they will reach around 3.4% by the end of the year, a rate still considered low. Meanwhile, foreclosures are not accelerating quickly. National data from the Mortgage Bankers Association shows that 5.1% of Michigan homeowners are behind on their mortgage payments, a lower rate than 42 other states.
Haden Block, the agent for Royal Oak, said the slight hike in interest rates could help ease some of the housing pressures by reducing demand. However, he notes, this won’t help affordability. Another solution, Al Block said, is for more lenders to offer “bridging” loans so sellers can feel confident listing their homes while searching for a new one.
Nothing to show
The coronavirus has changed the housing market, according to industry experts. It closed homes to screenings last spring, and then vendors and the public had to regain confidence with in-person tours. Yet with limited travel and more people staying at home, people wanted to focus on their living space.
“As we went through COVID-19, many people found themselves in a situation where they spent more time at home and worked from home,” said John North, CEO of Coldwell Banker Weir Manuel, who is based in the suburb of Bingham Strait. Closes and operates 18 real estate offices in the state.
Some have chosen to renovate existing homes. Others saw “opportunities to take advantage (of remote work) and move to different places,” North said.
Real estate agent Pete Platte of Gaslight Group Properties in Petoskey saw this happen last year, and it continues in this community of Little Traverse Bay.
Platte said about half of the homes were second homes, but the community is changing as buyers seek primary residences. “If you’re locked in a pandemic, you might as well be in a beautiful area,” he said.
Normally, in early March, Platte would work with 10-15 active listings hitting the market in February for buyers to consider.
“At the moment there isn’t one,” Platte said last week.
A house listed in the $ 500,000 range at the end of February had three offers the next day. Everyone watching him wondered if he could hit a bid of $ 600,000 – or more – if he stayed on the market all weekend. The final price will not be disclosed until after the sale is finalized.
Realtors agree that the lower end of the market tends to generate the most deals right now. Platte said the most he heard from Petoskey was 10, while a ready-to-move-in bungalow in the Creston neighborhood of Grand Rapids recently received 24 offers.
The Youngs have become accustomed to following other patrons to home shows in the Rochester Hills area and seeing another family ready to come in when they leave, Stephanie said. It inspired quick decisions.
After one, while they were discussing it in the car, they decided to make an offer of $ 15,000 above the list price. “We weren’t going to wait.
The house was very close to what they wanted. What they gave up in size, they made up with a better floor plan for their lifestyle, which includes their 6 month old daughter, Alita. They plan to close on March 20.
“We are so happy,” said Stephanie. “I can’t believe we got it.”