The news is constantly talking about the real estate market and its sad condition, as if there is but one market all across the country. The reality, however, is this: Real estate has always been, and always shall be, a local phenomenon. While certain aspects of the national market do have implications for local markets, each local market is defined by its own unique characteristics. So, what happens across the country is not necessarily what's happening in Traverse City, nor does the Traverse City real estate market translate nationally.
The greater Traverse City market is arguably the healthiest area in the entire state of Michigan. With our small town charm and larger city sophistication, coupled with the undeniable beauty of this area, Traverse City remains a destination for vacationers, and a hot choice for many to relocate here. We've seen our overall market decline substantially over the last five years, and that has affected many people. But our decline has been less dramatic than many areas of the country, and housing values appear to be stabilizing here.
We have roughly a 10.5 month supply of homes in inventory, down from the 15 month supply we had last year. The inventory supply is determined by the number of residential homes we currently have for sale, divided by the average number of homes we sell each month. A balanced market has a 6 month supply of homes. A larger supply indicates a Buyer's market; a lesser supply translates to a Seller's market. So, on the surface, it looks as if we still have a Buyers market, but closer analysis reveals that we have two different yet simultaneous markets coexisting.
When we break down our statistics even further, we can separate bank-owned property sales from traditional sales. Here's where it gets interesting:
Bank-owned properties (aka foreclosures) accounts for virtually half of all our sales. The inventory of bank-owned properties has dropped to a four month supply. That means that this is actually a Sellers market. With an undersupply of homes for sale and more buyers vying for fewer properties, we are seeing multiple offers on many such homes, with market times measured in days rather than weeks or months.
For traditional sellers (that is, private home owners), the news is less robust. For non-waterfront homes, the inventory exceeds a 24 month supply. That translates to a strong Buyers market for this segment. Sellers, it's crucial to understand the market dynamics. You are competing with foreclosed homes, and these bank-owned properties are always priced aggressively to yield a quick sale. The banks are ruthless in undercutting the prices of traditional home sales. This makes it critical for you to work with a professional who understands this dynamic, and can counsel you appropriately. One still needs to be motivated to sell in this very buyer-oriented market, so an effective marketing and pricing strategy is essential for success.
If you are thinking of selling your home, please call or email me today for your own free consultation. As a student of the market, I understand its dynamics, and can help you achieve success.
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