THE NEW REALITY OF TODAY’S REAL ESTATE MARKET
by David Medendorp
Clients come to me and other agents to help them analyze all of the available information to help them understand what the market is doing and help them understand their options. Today, I am more of a teacher than a sales person. I try to help my client understand the real estate market, what is happening in the market now and what might happen in the future.
The current market in Muskegon, West Michigan and the State of Michigan is showing many positive trends! The market has made a turn for the better. The average sale price in Muskegon was up 19% in March 2013 from March 2012. The median sale price was up 20%! The first three months of the year, the average sale price was up 15%. Now that, my friends, is something to be excited about!
The State of Michigan is up about 12% year over year for the first three months of 2013. West Michigan and Muskegon are leading the state. Detroit, for the first two month of 2013 was up 13.6% according to Case Shiller Home Price Index.
Inventory year over year for the first three months of 2013 is down from a 17 month supply of homes to an 11 month supply. The number of months of supply has a big impact on real estate value. In West Michigan five to seven months inventory is a normal market. One to five months supply of inventory usually indicates appreciation and a seller’s market.
For 2013, I expect the real estate price in West Michigan to top in November and resume additional appreciation in February of 2014.
What do I believe we should watch or be concerned about? Shadow Inventory. If the banks release or introduce too many short sales of list properties they are holding too fast, that could slow the market down. The market will be affected if the availability of loans increases or decreases, if interest rates go up or down or if there is significant additional new employment or unemployment.
What can we do to have Muskegon and West Michigan continue to be a leader in recovery? Government locally must be willing to work with real estate owners and new investors, with neighborhoods and business districts to improve our city in curb-appeal, safety and friendly service. All groups must try to understand each other’s challenges and work together to increase the value of our neighborhoods and business districts. By doing that, the government would get more tax revenue, the home owner more equity; the investors get increased wealth through appreciation therefore, investing in their properties and have more money to spend in the market.