Many, many, many – did I say many too many times? – many people have been wondering and asking what’s happening to the housing market these days. And rightly so. Because we are observing a shift.
This question is especially relevant when deciding to sell, or buy. All indicators point to a market slightly winding down and becoming more balanced. As we have discussed in previous analyses, rising interest rates and house prices have been affecting market trends. While pockets in the US are experiencing down times ahead, such as in Dallas, TX, in Kent County, and the wider Greater Grand Rapids Metropolitan Area, the field is currently healthy.
In Kent County, we are still hearing of a few multiple offers, and sales above asking, but far from the double-digit number of offers seen during last spring and summer.
Down to the details, in the Greater Grand Rapids Metropolitan Area the year-to-date average months of inventory for the first time appears to have stabilized at the the same levels of 2017. This follows a continuous, steady decrease, from the 13.3 months in 2008 to just 1.5 in 2017. Kent County reflects the same trend: levels for 2017 and 2018 are at 1.4 months.
Noticeable is the percentage in pending sales compared to last year. In Kent County, a 1.6% increase in pending sales has been met by a 15.2% increased volume. For closed sales these numbers are 4.6% and 18.6% respectively. Based on closed deals, the average home now sells at $230,662, an 11.7% yearly gain. That number is even higher based on pending sales, at $232,102. Property value continues to grow while residential new listings are also up 6.8%.
Multi-family units continue to be much sought after and to increase their value as investment. The number of multi-family listings has decreased in October, while overall it has increased year-to-date compared to last year: pending sales are down 30%, with volume up 12.1%. Volume for closed sales in October alone has gained a noticeable 89.6% compared to last year.
Sales of properties priced $500,000 and above has been slightly below market share during the past months, now at 3.4% of closed, and 3.9% of pending, with an overall year-to-date at 3.7%.
My own experience as REALTOR® on the field seems to corroborate these numbers. When inventory is really low, or properties experience high number of offers and then sell in a few days or hours, rarely there is need or room to schedule open houses not connected with an offer-due-by deadline. Conversely, with properties sitting for a few weeks on the market, more space for promotional activities is available. Of the 10 open houses I held in the last three months, 5 happened in the last thirty days, and a next one is scheduled in just two days: a clear acceleration in pace in line with market behavior.
We’ll continue to monitor the market as we move through the holiday season. Thanks to limited competition, data seems to support that this might be a good time to sell, depending on property value; more confidently so for land and multi-units. In spring we expect higher interest rates, which combined with raising home prices might place a few properties out of reach for some buyers. If not yet prepared to sell, this might be the perfect time to start renovating and updating your home ready for a spring listing. With increased listing prices and less competition, buyers now expect something more for their money.
Happy holidays everyone!