The one really interesting trend that we are noticing in the Ann Arbor real estate market is that the housing inventory is actually decreasing as we head into late Spring and Summer. This is normally a time when inventory should be increasing. There has been an overall drop in inventory of 8% from last month. In the beginning of May there were 841 homes listed for sale in Ann Arbor. In the beginning of June, there were 774 homes listed for sale. A contributing factor to the decrease in inventory is that many home owners owe more on their mortgage than their house is worth, forcing them to stay put for now.

The decrease in inventory isn’t spread evenly throughout the market.  Every price range under $600,000 has seen a decrease in inventory, ranging from a decrease of 20% in the $100,000 – $200,000 price range, to a decrease of 6% in the $400,000 – $500,000 price range. Once you get above $600,000, inventory has increased over last month. In the $800,000 – $1,000,000 price range there has been a 20% increase in inventory, and only 1 home went under contract in the past 30 days.

Up to $400,000 there is less than an 8 months supply of housing which is a good sign – basically a balanced market.  Above $400,000, the months supply is over 8 months and begins to climb which each price bracket increasing to 41.3 months when you get over $1,000,000.

What does this all mean? Based on basic supply and demand, this tells us that there is continuing downward pressure on pricing once you get over $400,000.  Under $400,000 the combination of decreasing inventory, and decreasing months supply of housing to under 8 months,  all points to stabilization and maybe even slight upwards pressure on pricing. Over $400,000, the increasing inventory and the months supply of housing being over 8 months is putting upwards pressure on pricing.

So is the market getting better? It all depends on what price niche you’re in.  Under $400,000 look for the market improving slightly.  Over $400,000 the trends point to a decreasing market. In the real 3state market, if there is less than a 5 months supply of homes on the market, you are in a seller’s market. A 5-7 month supply of homes is a balanced market.  Anything over 7 months is a buyer’s market. As you’ll notice from the stats below, prices appear to have stabilized under 400K, however, there is still downward pressure on prices once you get above 400K.

ZIP Codes: 48103, 48104, 48105, 48108 Approximate Location Boundaries: Ann Arbor School District

Location Characteristics: Ann Arbor has many distinct neighborhoods that offer a variety of home buying opportunities. The area is a cultural Mecca with many performance centers and theaters, live music, dance groups, libraries, museums, parks, & farmer’s markets. It is considered the education capital of the Midwest because it is home to the University of Michigan, one of the country’s top universities. The Ann Arbor area offers one of the most varied menus of restaurants in the state with Main Street as one of Michigan’s best places to eat, people watch and shop. In July, Ann Arbor is host to the Ann Arbor Art Fairs, which is among the nation’s top street festivals and takes up nearly all of the downtown area. Artists and shoppers travel from all over the country to attend this yearly event. Ann Arbor is a great place to live!

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About Martin Bouma:

Martin Bouma is the dynamic team leader of the Ann Arbor Real Estate Team, The Bouma Group of Keller Williams Realty. Implementing a barrage of technology tools makes Martin stand out in a sea of real estate professionals.  Martin and his team use these online and offline tools for one purpose alone – so Washtenaw County home buyers and sellers succeed!  He provides superior work ethic and solid dedication to his clients and what separates him from the amateurs is his thorough knowledge of the market, pricing and negotiating skills, and strong team who ensures ultimate success is achieved for their buyers and sellers.

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