As we head in 2010, the Ann Arbor Condo market looks like it may finally turn around. There are several trends that are supporting this.
Ann Arbor Condo Inventory
Over the past 2 years inventory has decreased from a high of 990 condos for sale in June, 2007 to 347 as of Dec 20, 2009. There has been a 55% drop in inventory when comparing December, 2007 to December 2009. Of course, the less inventory there is, the more competition sellers have for their condos. In this same time period demand has dropped 25%. Even though demand is dropping, it’s not dropping as fast as the inventory which tells me that the market is strengthening. This can also be seen in the months supply of condos. More than 8 months supply of inventory indicates a buyers market. Less than 5 months indicates a seller’s market. Currently there is a 9.2 month supply of condos for sale in Ann Arbor. This is down signifincantly down from an 18 month supply just 2 years ago.
Condo Prices in Ann Arbor, MI
We have seen prices decrease 25% since 2007, which is creating some of the best condo pricing we’ve seen in years. The effect of foreclosures may put continued downward pressure on prices, however, with demand catching up to supply, and investors stepping into the market, prices should stay firm.
Tax Credits & Buying a Condo
First time homes buyer’s qualify for an $8,000 tax credit, so long as they purchase their condo by April 30, 2010 and close by June 30, 2010. There is also a tax credit for repeat home buyers of $6,500. There are restrictions, so feel free to call us for the details. This will definately give the Ann Arbor Condo market a shot in the arm for the first 4 months of 2010.
Historically Low Interest Rates
Interest rates are still at historically low rates, ranging in the 4.5-5% range. Keep in mind that should interest rates rise just 1%, the mortgage amount that a buyer qualifies for goes down by 10%. This translates into 10% less buying power.
Short of a major shift in the economy, all of the indicators are pointing to 2010 being an excellent year to purchase your Ann Arbor condo. Seldom is there a time where every factor that controls price is lined up so perfectly. Interest rates are low, inventory is the lowest in years, prices are the best in years, plus the government is offering a tax credit.
For more information about purchasing an Ann Arbor Condo, call the Ann Arbor Condo Experts at 734-761-3060.