Detroit Area Stats Show Promise

Real Estate Agent with Remerica Hometown One

Every month I review statistics for the Detroit and surrounding areas. The trend over the last years has been positive. Inventory levels have remained even or have dropped. What does this mean to the consumer?

If you look at the Real Estate Market's indicators, inventory levels are a leading indicator. They're the first things to point out a market trend or direction. Everyone focuses on prices but prices almost always lag behind inventory.

Here's an Excel sheet I've used to measure market inventory. Rule of thumb is that 4-6 months of inventory is a normal market. If there is more inventory prices drop due to too many choices for a buyer. If there is less inventory, the buyer must make a quicker choice and will much more likely be in a competitive bidding process.


    Active Pending Sold   A/Inventory P/Inventory
Detroit   3052 1067 2615   7.00 2.45
Livonia   428 128 527   4.87 1.46
Canton   270 88 389   4.16 1.36
Novi   212 52 197   6.46 1.58
Troy   356 93 353   6.05 1.58
Northville   184 53 153   7.22 2.08
Plymouth   152 28 195   4.68 0.86


The above table shows that the city of Detroit has a 7 month supply of inventory. This is up almost 1/2 month from Decembers numbers. This could signal another price drop if the trend continues. Plymouth, on the other hand, is down about 1/2 months of inventory form December.

Now, you can't take one month and predict a trend but if you look at 6 months you can get an idea of where the market is going. Some of the factors that could affect the market are unemployment not expecting to get much better soon as well as other general economic trend. Still, it bears keeping the stats in mind if you are an investor looking to purchase.

Comments (3)

Celia Maddox
Solutions Real Estate-The Celtic Connection - Gilbert, AZ

Thanks for posting. I learn a lot from Active Rain blogs. Best Regards,

Feb 02, 2010 12:38 AM
Michael Delaware
North Sky Realty LLC - Battle Creek, MI

Good post.  I am from Michigan too, in Battle Creek, and it is good to see something positive about Detroit.

Feb 02, 2010 12:42 AM
Jerry Gardner
Remerica Hometown One - Livonia, MI

Thanks Celia, Hope all is well in AZ.


Michael, I believe that Michigan will begin to make a recovery, not just in the Southeat but the whole state. Stay tuned.

Feb 02, 2010 01:09 AM