It is no surprise, the housing market in Southeastern Michigan is seeing an increase in inventory, days on market, and, in some areas, declining average sales prices. The Detroit News has a two-part article on the real estate market in Southeast Michigan.
Here is part one describing how the market is currently affecting sellers.
Part two describes how sellers, builders and Realtors(R) are getting creative in attracting foot traffic and offers.
There are associated articles from this two-part series at the Detroit News website, so click around for more articles.
So why is this news?
Michigan has been hit particularly hard by the unemployment and layoff bug, given our regional ties to the automotive industry. Michigan’s economy has also been slow to adapt to a changing marketplace. Where the nation was once a labor based economy, we have slid as a country into a technology/service oriented economy. Michigan has a whole has yet to embrace this fact. As a result, we are the leading indicator of the housing market cooling-off period, and have been for at least the last 12 months. Michigan, I believe will be hit a little harder than the rest of the nation due to our dependency on a labor economy. Until the state changes its policy towards small business and begins to foster a thriving service and technology based economy, we will be in a rough spot for some time.
What does the economy have to do with selling my house? One word:
Buyers have nearly 50% more homes to look at than last year. The perception is that they can demand anything and likely get it, if the sellers are dead serious about selling.
Perception also works in the favor of the seller if the home has been priced below last year’s average sale price and is in excellent condition. Among all the tricks of driving folks through listing, price and value will sell the home.
By way of an example, an associate of mine has two homes on the market where the agent that brings the buyer is paid 5% of the sales price in commission. Both homes are over the $550,000 mark, a considerably sum of money for a buyer’s agent. What happened was textbook: the first two weeks the homes were on the market, agents were dragging their clients through the homes to see if they were even interested. No offers were tendered and now, the agent is lucky if those homes are shown even once in a week.