Has the pendulum shifted? Have we seen the worst of the real estate market here in Metro Detroit?
Supply is down 20% and buyer demand is up 6%
The real estate market is changing right before our eyes. In the last year inventory or the amount of homes for sale each month has decreased by more than 20%. This in part due to the fact that there are a lot less bank foreclosures on the market. Lenders are much more open to short sales which avoids a foreclosure.
Of the 5,139 sales last month (the fact that there were 5,139 sales last month is remarkable in itself), 757 or 14.7% were short sales. Had the lender not been open to a short sale a lot of those homes would have eventually foreclosed. In general we know demand is up because last month there were 5.8% more sales compared to the same period in 2010. So while demand is up and supply is down 20%, we are experiencing a shift in the market. It is starting to favor sellers.
Great time to pick up some investment properties
Another amazing statistic is that 46% of the transactions that closed last month were CASH sales. This means the buyer didn't get a loan and came to the closing table with CASH. I would assume a good portion of these sales were investor purchases. From a cash flow perspective, it really is a great time to pick up some investment properties and rent them out. You could let a property management company like JMZ Management, handle the entire process from leasing the home out to managing the tenant and complete process after the fact. I personally have bought two or three properties every year the past few years.
23% of the homes listed for sale are short sales
Keep in mind currently of the 25,989 homes currently listed for sale, 16% of the homes are bank foreclosues and 23% are short sales.
Multiple offers are the norm now
I currently have 7 buyer specialists on the team who only work with homebuyers and they tell me almost every offer they write is in a multiple offer situation and more times than not they are writing over asking price and still losing the bidding war. It's very competitive right now as a buyer and a great time to be a seller. The market has shifted in a positive direction and interest rates are still at record lows hanging out around 4%.