With the completion of first quarter of the year, the statistics for Ann Arbor real estate are pointing to several interesting trends. A question on everyone's mind; "What's going on with the Washtenaw County real estate market?" The answer is not as short as the question.

My answer is that real estate values continue to dip in our market, however, there are now signs that homes may not depreciate as much as they did in 2006 and 2007. We see that real estate inventory is coming down and that sales are picking up.  Consumers should look forward to a leveling of prices in the near future, especially here in Ann Arbor, Michigan.

Remember that real estate is directly linked to supply and demand, so we need to watch both of these to see what direction the market is headed.

Let's talk about Supply  

In the Ann Arbor school district during the 1st quarter, residential listing inventory has decreased by 24% when compared to last year. In the first quarter of 2007, 860 residential homes came to the market, versus 653 in 2008. We are seeing that the inventory is now decreasing. The current listing inventory at the end of March 2008 was 16% below what it was last year.

In the Ann Arbor school district during the 1st quarter, we have seen that the condominium listing inventory has decreased by 32% when compared to last year. In the first quarter of 2007, 627 condominiums were listed, with 7.8% (49) being rentals versus 455. In 2008, with 14% (64) being rentals. At the end of March 2008 the listing inventory was 18% below what it was last year.

Let's talk about Demand

When compared to last year, residential sales in the Ann Arbor school district decreased by 17%. There were 189 residential closings in Ann Arbor during the first quarter, versus 157 in 2008.

In the Ann Arbor school district, condominiums sales decreased by 18.5% when compared to last year. There were 109 closings in the first quarter of 2007 of which 11% (12) were rentals, versus 120 in 2008, with 34% (41) being rentals.

You'll notice that sales went down, keeping both supply and demand into consideration, however the current available inventory decreased by the same amount, which will prevent a build up on inventory.  This is an encouraging trend, as new listings to the market have decreased by 24% for residential and 32% for condominiums.  If this continues we should begin to see a decrease in inventory, a slow down in depreciation and hopefully stabilization. Yet keep in mind that there are two factors that could put a cloud over these trends, and that is continued job loss and the tightening of mortgage lending. I will continue to watch those trends as we head into the spring,

I am cautiously optimistic that we are near or at the bottom. The mortgage industry should hopefully get on track some time this summer and jobs are predicted to increase in early 2009. This is an excellent time to buy a home, as prices are at their lowest point in years, interest rates are still historically low, and I do believe that we are at or near the bottom of the market.

We track every school district in Washtenaw County in $50,000 increments at The Bouma Group, so should you be interested in the above trends in your price niche, feel free to contact us at 734-761-9666.