We head into 2011 feeling much better than we did one year ago. We are not seeing major increases in Ann Arbor area property values, however today I would define recovery as being the end of continuing price declines. For the first time in 5 years, we are seeing slight property value increases in most Washtenaw County areas. With historically low interest rates and unbelievable home prices, housing is more affordable today than it has been for decades. I believe that 2011 will be the peak year for buying Washtenaw County real estate.
Washtenaw County Property Values
Looking at the year end MLS reports, there are promising statistics to report:
- the average sales price inched up by 1%
- closed volume for residential sales increased by 4.0%
- closed volume for condominium sales increased by 25.6%
- number of residential sales increased by 2.98%
- number of condominium sales increased by 26.36%
- new listings decreased by -5.6%
As exciting as some of these statistics are, it is important to understand that real estate is local. Here is a chart that shows what is occurring in each school district in Washtenaw County.
As can be seen, Ypsilanti homes and Willow Run homes have seen the largest increase in value (when looking at $/SF). They’ve also had the greatest drop in property values since 2005 – over 50%. This is typical of a market where there are a large number of bank sales. Because the market finds the bottom very quickly, it is the first to recover as investors come in to pick up all the incredible bargains. The Milan real estate market is similar and has recovered by 3.5%.
The next greatest price increase occurred in Ann Arbor. Because the Ann Arbor real estate market is not driven by bank sales, the market has remained stable. The demand has stayed very strong due to a stable job market, and the inventory – due to the lack of bank sales – has remained very tight. We are finding that many home owners that have wanted to sell, can’t do so because they are upside down on their mortgage. Because they don’t qualify for a short sale, due to a solid income, savings etc, they simply stay put. We can expect that trend to continue for a number of years, which will continue to keep the inventory low. Usually decreased inventory puts upward pressure on home prices, however, the constant flow of bank sales and short sales to the market will keep price increases in check.
Two markets that are continuing to see price decreases are the Chelsea real estate market (-1%) and the Manchester real estate market which saw a significant drop in property values of 6.8%. With the concern over gas prices and increased affordability of homes closer into Ann Arbor, rural properties have been at a disadvantage due to decreased demand. The less demand, the greater chance that homes will fall into foreclosure, which continue the downward spiral in prices.
To keep up to date with the Washtenaw County real estate market, check back here often or better yet, subscribe to our blog. We want to be your real estate source in Ann Arbor and Washtenaw County. Please feel free to use our websites, www.bouma.com, www.condohotline.com/annarbor, or www.subdivisionhotline.com for current information on the market, and remember— that our moving truck is always available—on a first come basis—to our current and past clients.