Prices in Metro Detroit Housing Market Remain High, Sales Low
CBS Detroit - What should be a high right now in the housing market, Detroit is leading the nation in the decline of home sales. According to RE/MAX, housing sales are down 33.7% from last year. Sales in four markets according to RE/MAX are down by more than half with Metro Detroit leading the pack at 64.8%.
While some markets saw sales drop by 1/4 to 1/3, Des Moine, IA had the smallest decline in sales of 14.3%. The good news is homes are holding their value. The median sales price of $272,000 was up 4.7%, which is slightly lower than the usual 5.4% trend normally seen in the May to May price increase over the last 5 years. The median home price in Metro Detroit according to the Detroit Free Press was $234,063, which is right in line nationally at 4.6% higher. Closed sales in our area are down 27%.
Inventory overall has dropped 25% year-over-year, one of the lowest declines in recorded Remax's 12-year history. The cities who had an increase in inventory, or the number of homes being put on the market, were Wichita, Indianapolis, and Chicago when compared to May 2019.
Jeanette Schneider, executive vice president of RE/MAX of Southeastern Michigan told the Free Press, "We're seeing activity from the buyers out there. What we haven't been seeing that much is people putting their home on the market," Schneider said. "Sellers have been a bit more cautious. And because of that, we continue to have our supply and demand challenges."
It would easy to think with the Coronavirus pandemic to think people are unsure of their jobs, but Jason Matt of Keller Williams in Plymouth says many buyers feel secure in their jobs despite the recession.
Part of the increase in home prices they say is also from low interest on mortgages. For the first time in 50 years, 30-year fixed-rate mortgages are below 3%. When you tie those low rates with low inventory, Matt says it's not uncommon to see multiple offers over the asking price. Yet sales still being down.
Total sales were at their worst during the spring during the height of COVID-19 lockdown. when realtors had to show homes remotely. From a county-by-county perspective of median home prices:
- Wayne County - Up 11% to $293,950
- Livingston County - Up 6% to $293,950
- Macomb County - Up almost 3% to $203,850
- Oakland County - Up 1% to $278,450
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