As we head into the tail end of summer, we are beginning to notice that the market is stalling a little and has become slow. What I mean by slow is that there are not a lot of buyers out there with a real urgency to buy. Homes are still coming to the market, but they are not being absorbed as quickly as normal.
Under $400,000, the months’ supply of inventory is actually increasing – not decreasing as is normal for this time of year. Above $400,000, the inventory is decreasing or staying the same, more due to sellers giving up, versus homes selling. Above $1,000,000, there is an 11% increase in months supply. The total listing inventory for Ann Arbor is down 2.8 percent from last month, and year to date it is down 5.5%. The good news is that homes that are priced right are still selling, and homes that are overpriced are just sitting.
For sellers who aren’t motivated to sell, this is not the time to test the market. It simply isn’t going to happen for you. Even if you found a buyer willing to pay your price, you still have to get the appraiser to agree. When will we see buyer activity increase? I don’t know – no one knows. It depends on a number of factors, with job creation being the most important one. We also have a smaller pool of buyers due to all the foreclosures, and the tightening of lender standards which includes larger down payments.
The good news? With interest rates below 5% and below 4% for a 15 year fixed mortgage, the cost of lending is the cheapest we’ve ever seen. With each 1% increase in interest rates, you qualify for 10% less mortgage. Also, with prices back to where they were 10 years ago, housing is very affordable right now. You do not want to miss this opportunity to get into a home
In the real estate 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.
|ANN ARBOR REAL ESTATE MARKET, AUGUST, 2010|
|Sales Past 12 Months||63||331||309||144||79||46|
|Supply change from last month||-7%||5.8%||3.3%||5%||-1%||-9.3%|
|Sales Past 12 Months||31||14||14||10||1043||236|
|Supply change from last month||0%||9%||0%||11.3||2.0%||4.8%|
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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