Real Estate professionals in West Michigan are finding themselves involved in an interesting line of conversation with potential home buyers in recent months. After the usual qualifying questions about housing needs and wants, the next step is to find the right home. That’s where it’s getting complicated.
Home Buyers are often surprised to find that there are not that many homes to choose from. And, when a suitable home is found, there’s another surprise. Hopeful new home owners may find themselves competing with multiple offers to purchase a home – sometimes within hours or days of new listings coming onto the market.
For Investors, the outlook is even bleaker. According to the latest statistical reasearch available from the National Association of REALTORS, ALL CASH sales dropped slightly in February to 26% (down 1% from the previous month) and Individual Investors accounted for 14% of the market (down from 17% in the January).
Distressed Sales remain largely unchanged at approximately 11% of the national market. The days when Investors were getting houses for a ‘song & a dance’ have disappeared. The average Distress Sale retails between 15-17% below fair market value.
Inventory levels are at an all-time low nationwide. As a result, housing prices have remained strong. The average home is on the market for less than 65 days. 34% of homes on the market in February sold in less than a month.
On the local front, the Grand Rapids Association of REALTORS reports some trends that mirror the national marketplace but overall West Michigan is posting positive gains. The average home price has increased 7% over the same period of time last year with today’s average home retailing for just under $159,000 versus approximately 140,000 a year ago. This is a significant increase of over 12% over the past year.
What remains the most unexpected element of this story is that last year (February 2014), Inventory levels were at approximately 3.1 months of supply. Today’s numbers indicate a drop to 2.6 percent. Surprising, even as we prepare to enter the Spring Market of 2015. If we repeat the trend from last year, it will be July before inventory levels peak above 3 months of housing inventory. Great news if you’re thinking of becoming a Home Seller. For Home Buyers…well, not so much.
For more information about the insights shared in this Market Trends Report, please contact: Lola@audurealestate.com.
Grand Rapids Association of REALTORS statistical report