This summer, our market trends blog documented the issue of an unusually low inventory (less than 3 months supply) in the Grand Rapids MI real estate marketplace. According to the data report, (which tracked data available through the Grand Rapids Association of REALTORS up to May 2014) the amount of housing inventory available for sale in West Michigan had dropped to under 3 months of supply. (2.4 months to be exact based on Pending Sales)
Recently, the Grand Rapids Association of REALTORS released their September report. Inventory levels have relaxed a bit with levels of 3.6 months based on Pending sales. There has been a decline in the number of Pending Sales, BUT this has resulted in an INCREASE in the average sales price- almost 10% above the same period last year and 10% over last year’s sales prices.
These numbers are based on Pending sales activity but are tracking fairly closely with Closed transactions which are only slightly lower at 9.6%. Closed transactions pricing is slightly lower at $169,112 vs just over $172,000.
So, does this imply that the market is softening? The answer is a mixed Yes & No. An important statistic to note when looking at the numbers is how long homes are staying on the market before they are sold. In May, the average home was staying on the market for 52 days or more. In September, the number dropped to 47 days. So while, the price of the average home may have dropped by 2%, the amount of time to sell the average home has also dropped by approximately 10%!
So, it’s a little bit of a mixed bag. Prices have dropped slightly, BUT homes are selling more quickly. Inventory has risen since the summer from just under 3 months (2.8 months) in the summer to over 3 months (3.6 months). To sum things up: When homes are priced correctly and show well, the fall market can be very attractive because the competiton is less. You’re more likely to be dealing with fewer new listings and the excess inventory is often carry over from listings which did not sell during the summer.