August 2014 Monthly Market Update

by admin on September 1, 2014

The business activity in early August and throughout July defied our predictions in a good way, as business was surprisingly robust. It seems the release of the weather-delayed- activity really hit stride in June and July. Also, the increased number of listings entering the market has brought out some buyers who, with the low inventories, had stopped looking.  All in all, good news for sellers, a continued strong demand, and for buyers, a few more homes to choose from.  We may see August also finish stronger than expected, but we are still holding on to the prediction that the market is settling.

As the charts below show, listing inventories are beginning to rise in many price ranges, signifying the strongest sign of an equalizing market, which in turn, slows the pace of value appreciation. 

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The price-per-square-foot trends for the under $250,000 markets has been slowing from a very wild ride last year, settling down this spring but jumping again with the spring/summer rush as buyers have outpaced available listings. The markets over $250,000 have had a more stable growth rate, falling in June and July as listing inventories began to rise, bringing those price ranges closer to a balanced market.

Just to get a historical perspective, the following chart shows the rate of appreciation over the past 20 years for SE Michigan. This uses Case-Shiller data and compares to a 10 city composite. Southeast Michigan did not rise as fast, but fell a bit farther than the rest of the country. Although home values have not quite reached 2006-peak values, as you can see we have recovered enough to approach the appreciation percentage rates we are used to seeing pre-crash.

Case-Shiller Monthly Appreciation Rates: 1991-2014picture

 

 

 

 

 

As we suggested last month, the market will continue to be strong for the balance of this year, carrying strong momentum into 2015. However, beginning this fall, each successive month will settle a bit from the last as showings will be strong (but not as strong), offers will be plentiful, but not as plentiful, and values will continue to rise ( just not as fast).

July finished very strong for our offices in all markets, with a nice increase in market share over last July. The market has been pretty wild. Thank you for all of your hard work and success!

 

 

 

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