Over the past several months, we’ve been receiving more and more calls from home owners wanting to shrink their living standards, including their Ann Arbor homes. Of course in the supply and demand scenario, if there are more people wanting to downsize than people who want to upsize, you run into a situation where the supply exceeds the demand and that places a lot of pressure on home prices.

Supply vs. Demand

This can be evidenced by looking at the real estate market statistics in Ann Arbor. As of today, there are 75 Ann Arbor homes for sale priced over 700K with nothing being under contract per an Ann Arbor MLS search. In all of Washtenaw County, there are 121 homes for sale over 700K, with only 1 home under contract. In 2007, there were 4 homes under contract at this time. Over $700,000,  there was a 12.3% decrease in number of homes sold from 2007 to 2008 versus 2.7% for the entire Ann Arbor real estate market. As the inventory picks up and fewer homes go under contract, we will begin to see an increase in short sales and foreclosures. I’m aware of a number of homes in this price range that are already in the foreclosure process.

We all thought that the higher end Ann Arbor neighborhoods would be spared the nightmare of foreclosures and short sales. However, as the auto industry gets hit harder and harder, the ripple effect is being felt in the upper end market. I’m talking to people everyday, especially business owners and corporate people,  who are in shock by what has happened to their financial picture in the past year. Luckily Ann Arbor is being buffered by the many high paying jobs associated with the University of Michigan, the local hospitals, and the high tech industry and creates a level of stability not seen in many other communities. However, for the short term it appears that the home buyers looking to buy in the upper price ranges, are being outnumbered by the number of home sellers that are experiencing financial distress.

Ann Arbor Homes are Still Selling

Regardless of the current real estate market, as your Ann Arbor Realtor, I want to remind people that houses are still selling. It is imperative that when selling your home, it is in excellent condition, and above all that it’s priced correctly. If you decide to put your home on the market, you need to be aware that you are competing with highly motivated sellers – and lots of them. A well priced home in excellent condition will sell in any market.

Are you considering downsizing from your current Ann Arbor home? I would love to talk to you to discuss the many options you have available!

Until next time-

Your Ann Arbor Real Estate Expert