March 2021 Market Update - Are there REALLY no homes for sale? Is the market getting ever crazier, or starting to cool off?
March was an extremely exciting month in the real estate market and very much so here at The Perna Team.
We've been hearing over and over that there are no homes on the market, but we have some great data around this to share. Taking a look back at the numbers in the Metro Detroit and Ann Arbor area, in February of this year we saw 4,573 new homes go on the market. In March that number grew to 6,160 new homes, providing a 26% increase in the number of properties on the market. Looking back at the inventory from year over year, we were down in 2021, but only by 487 homes. Also, we do anticipate seeing the number of new homes coming to the market continuing to grow through April and May, so for any buyers who have been having a hard time winning a bid on their next home, this could be your time!
Taking a look at the number of homes sold - In February we saw 3,889 homes go off of the market, with 4,464 additional homes being sold in March of 2021, giving an increase of 19% in home sales month over month. However, if we look back at the number from March of 2020, there is only a difference of one home at 4,463 homes sold. So are more homes being sold, or are homes just selling a lot faster? Let's look into this further.
Between 2017 up through the first quarter of 2020 the median days on the market that home sat before being sold was 42-53 days. In today's market, we are seeing a median of ONLY 11 DAYS before a home sells. This includes those homes with a much narrower niche in the market, vacant land properties and other homes that we work with day in and day out. So we are seeing not that there are no homes on the market, but homes are selling at a MUCH faster rate than in previous years - nearly 75% faster to be exact. So when driving through a neighborhood or searching on sites like Zillow, we are seeing only 25% of the number of homes that were seen not long ago.
Additionally, we have seen a significant change in the average sales price of homes sold in the Metro Detroit and Ann Arbor areas over the last 12 months. In March of 2020, the average home was being sold at $243,531 in comparison to March of 2021 where we saw that average increase by 13.9% to $277,587. That is a difference of $34,056. Interestingly, mortgage payments have not changed (or in some instances actually decreased just a touch) due to the drop in interest rates since this time last year. In March of 2020, we were seeing interest rates averaging between 4 to 4.25%, where we are now hovering around 3%. This difference means that even though home prices have gone up, the majority of buyers today are able to borrow more money for their new home while keeping their monthly mortgage payments at the same amount or less. Buyers, keep in mind that we do expect to see interest rates continue to creep back up as the economy continues to improve. This means that the current interest rates and your ability to buy more homes for the same payment will not last forever. In March of 2021, we were personally able to help 57 families find and purchase their new homes using our unique negotiation methods. Nearly half of the homes we won for our clients were NOT the highest offer received. Rather, we helped negotiate additional terms that provided extra value to each seller, making our offer the most valuable. Also, working with a reputable agent/team can drastically increase the chance of the co-op agent recommending that offer to their client, knowing it is much more likely to provide a smooth transaction and reach the closing table.
If you have been considering buying and/or selling a home, contact us today. We have been having great success not only in helping our buyers win their new homes but in finding homes not yet listed on the market. We would love to help you and your family get to your next destination!
For help with your real estate needs, or to ask any questions, please call: 248-886-4450
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