Factors Influencing the Washtenaw County Real Estate Market
One of the biggest changes has been the significant decrease in inventory. In Ann Arbor we are entering 2012 with only 434 homes for sale, which is a 14% drop in inventory from 2011. The Ann Arbor condo market has seen a 25% drop in inventory as we head into 2012 with only 203 listings. The decrease in inventory is even more stunning when compared to the peak years. Since 2007 the residential inventory in Ann Arbor has dropped 49.55% and the condo inventory has dropped 69.8%.
Some of the decreases from 2011–2012 in other schools districts were as follows:
- Saline entered 2012 with 199 listings – a 3.86% drop in inventory
- Dexter entered 2012 with 150 listings – a 23.8% drop in inventory.
- Lincoln entered 2012 with 164 listings – essentially the same as last year.
- Ypsilanti entered 2012 with 66 listings – essentially the same as last year. In 2007 there were 289 listings, so this market has changed significantly.
Should inventory remain low, the hope is that price increases will follow. The main reason for the decreased inventory is the fact that many seller’s are underwater with their mortgage and can’t afford to sell, so they stay put, or they rent their home.
Prices peaked in 2005-2006 when the average price/square foot in Ann Arbor was $174/SF for the residential market and $145/SF for the condo market. Several of the sub-markets have seen small increases for 2 years in a row, and with decreased inventory, job growth, and low interest rates, the hope is that this will continue. I don’t see prices increasing too rapidly though. Every time prices increase a little, there will be a surge of sellers who will now have enough equity to sell their home, which will keep a lid on huge price increases.