The term Polar Vortex has become a national buzzword as harshly cold winter conditions have blanketed much of the nation. However, as 2013 ended, real estate in the West Michigan area was heading in the opposite direction with a flurry of heated market activity. Listing inventory remained low (3.3 months supply in November) with less than four months of housing supply in stock which pushed up average sales price to $153, 000, the highest numbers the local market had witnessed prior to the market crash.
The total number of housing units for sale in the Grand Rapids was down 18% in December 2013 to 2,989 units vs 3,640 in December of 2012. Homeowners who chose to sell during the end of year were often surprised by an increase in showing requests! Some additional significant data points include:
1. New listings coming on the market in December were approximately 25% less in 2013 than in 2012. This trend has not showed signs of significant increase yet, although things are anticipated to pick up in the latter part of the month and February.
2. Sold inventory dropped slightly from 757 units in December of 2012 to 707 units in 2013.
3. The Absorption Rate based on Closed Sales remained at approximately 24% similar to the rate of absorption throughout much of the last quarter of 2012. Peak absorption rates last year occurred during the month of May in which the rate of market activity was 39.5%. What this means is that approximately 1 in 4 homes listed for sale is being sold in any given month on average.
These indicators have served to increase the average sold price and keep the differential between average list price and sales price at approximately 94% which translates to higher net equity for home sellers at the closing table. Due to unusually low inventory levels, days on the market currently stands at approximately two months. Homes which are staying on the market for more than 90 days are over-priced. The market remains unforgiving in that regard.
The median home price is $126,000 which is approximately $10,000 higher than the median housing price at the end of the previous year. It should be noted that each neighborhood in the Grand Rapids area will reflect its own unique variant of this data, therefore pricing strategy must be adjusted accordingly.
Data for this report obtained from the Grand Rapids Association of REALTORS monthly trends report and SWMRIC trendsgrahpix.
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