Housing market evens out after increased home prices
November 13, 2013
The years of not having the financial means or the available housing market to sell a house are over, according to several housing brokers in metro Detroit.
While selling a house three years ago was nearly impossible, with many families in the area not having the financial means to move or buy a new home, Anita Barratt, a sales associate at Max Broock Realtors, said that the market has changed dramatically in the past year to where people are able to sell their homes at a good price, and there is a big pool of buyers at the same time.
“I think the biggest reason there were fewer houses on the market (in the past) was that people were staying put because so many people were underwater (financially), and they would rather stay put than try to sell,” Barratt said. “Prices have come up for houses recently, and more families can afford to sell and try to move up to a bigger house. It is a matter of having fewer sellers and more buyers that is increasing house prices.”
Re/Max Vision Associate Broker Jim Schaffer, who sells houses along the Woodward corridor, said the increase in potential buyers allowed sellers to raise prices almost 20 percent over what they were a year ago.
In recent months, however, the market has been starting to even out in the number of sellers and buyers, allowing buyers to negotiate more on price.
“In the past couple of months, we have seen the buyer pool decrease a little bit, and while it is still leveraged to a seller’s market, there is less demand than there was three months ago,” Schaffer said. “We are still seeing multiple offers and bidding wars, but this summer, every property was the highest and best offer in a week’s time. Now, it is taking about three weeks to sell a house, but that is still better than it was two years ago.”
For Schaffer, a lot of people he works with are recent college graduates. When the job market was down two years ago, he said a lot of college graduates had a hard time getting a job and could not afford to buy a house at that time in their lives.
“For three years, nobody bought houses, and now we have all this pent-up demand for people wanting houses, so I think it will continue like this with an even market for the next three to five years,” Schaffer said. “Folks could not find employment after college, so they moved back in with mom and dad or they rented a cheap flat. But their leases are coming up now, and they are ready to buy because they are back to work.”
The evening out of the housing prices and a little less demand has made it an easier market to navigate for the buyers, Schaffer said.
“Eight months ago, if a buyer missed out on a house or two, ones they thought could be dream houses, the next one that came along, they had to move more apt and make a decision quickly, and that drove prices up,” he said. “Now, buyers have more of a luxury of time. A few months ago, we said if you sleep on it, you won’t get to sleep in it. Now, they can have a day or two to think about it without being outbid.”
When it comes to the seller’s place in the market, Kim Nagy Street, an associate broker with Max Broock Realtors, said it is important new listings are not overpriced, or they will get overlooked.
“In the spring, houses were marked up $5,000-$10,000, but now sellers need to be very aware of where they are pricing, because pricing is key,” Street said. “In the springtime, people were just happy to have a house, and now they care more about negotiating, when it comes to repairs and price.
“Ultimately the buyer determines the value, so sellers need to look at current pending and recently sold houses and determine their pricing.”
Interest rates are slowly going back up, with rates sitting around 4.5-5 percent, depending on credit history. With the rates still being lower than they were a few years ago, Barratt said new homeowners aren’t the only people on the market looking to buy houses.
“We are seeing a lot of people taking money out of the banks, where they were not getting good interest rates at all, and instead of investing in the stock market or putting it in a savings account, they are buying up homes,” she said. “We have fewer sellers and more buyers, so it goes back to that old economic motto of supply and demand.”
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