January 2014 Market Update

by admin on January 18, 2014

The year ended with a bit of a headwind compared to the prior months with both pending sales and new listings entering the market off of last December’s pace. Some of that may have been the timing of a late Thanksgiving, which cut some time off of December by concentrating shopping and holiday time. As a result of our current deep freeze, we can also expect that January sales will show a slowdown over 2013. None of these happenings are worth worrying over. They simply push sales ahead into February and March. As most have been predicting, 2014 is not expected to be as strong as 2013 in terms of homes sold, but don’t get fooled by the year over year comparison stats that might show sales declining. Remember that’s compared to a peak year, so the activity will still be very good, just not crazy good. Also, values are expected to continue to rise (most predict 3-6%). Though with current inventories so low, we think the number will be higher.

For Wayne, Oakland and Livingston Counties, new listings entering the market peaked in the summer/early fall and then declined, which combined with a steady increase of new buyers has caused listing inventories to drop rather dramatically. The new listing decline is somewhat puzzling considering home values have risen, affording more sellers the opportunity to sell. Part of the cause is the reduction in bank owned new listings entering the market (now 5% of the total vs. 21% last December).

Macomb County also had a significant drop in overall For Sale inventory, but because of a slightly different reason. The rate of new sales stayed ahead of the pace of new listings resulting in a net decline in available homes for sale. Macomb has not seen the same rate of increase in new listings as Oakland and Livingston, most likely because they had a slightly higher percentage of homes with values below mortgage balances. It is taking longer for those listings to be released to the market. An increase in expired listings has accelerated the listing inventory decline in the past 90 days.

Washtenaw County has moved at a different pace than the rest with a stronger rate of new listings and new sales. In fact, Washtenaw is the only county where the listing inventory has actually risen over the prior year, starting in August, even though the pace of new sales has been increasing, as well. The rate that listing inventories are increasing has slowed in November and December as new sales have outpaced new listings. The current inventory shortage in Washtenaw, although near record lows, is not as proportionately severe as the other counties (little solace for a Washtenaw home buyer). If the current sale pace continues, Washtenaw County can expect to quickly fall in line with the rest of Southeast Michigan’s declining inventories.

 

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