Just a few days ago the National Association of Realtors made a statement of the improving sales for the month of July. That may be a national trend for one month but for those of us trained in marketing one month does not make a trend.
Many economists are not so sure that the market surge reported in existing home sales is anything more than a blip that will go away as fast as it showed up. Michigan has some underlying factors that are affecting our market that may not be present in other markets.
- Michigan rates #5 in the foreclosure rate nationally with over 42000 foreclosures.
- Grand Rapids has just seen one of the long time mortgage companies go out of business....they were caught up in the sub-prime loan issues and could not survive.
- Unemployment, with the job market tight people are hanging on to their jobs. The West Michigan statistics do not show much movement in numbers.
- Consumer confidence in retail purchases fell last month indicating a tightening of budgets. This also means that back to school purchases may lag a bit too.
- Listings are still out pacing sales by a wide margin with the buyers market raging in full swing.
On a lighter side of the economic issue home have always been a wise investment and will continue to be. It is more difficult for people with credit blemishes to get loans but they still can qualify. Will all the inventory and relatively cheap interest rates it is still one of the best time for buyers to change homes or purchase a home. Yes sellers will not get the price they may have gotten a few years ago but they also are not paying the same for the home they are buying.
My estimate is that we are going to continue to see the housing market slump for another 18 - 24 months. So if you are waiting for a turn around before you buyer or sell you may have a bit of a wait. If you find that the current home you have just does not offer the comforts or amenities that you would like and you can afford to sell.....you could not pick a better time to buy. Here is the siver lining. As the market rebounds your new home value will increase right along with the market surge. The other issue is your value increase will outpace your taxes for a change....now won't that be nice.
I hope this update has help you in your real estate decision process.