Michigan Real Estate News

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Detroit’s Rental Market Shows Decline

The vacancy rate for apartments rose 16% in the fourth quarter, double what it was in the first quarter of 2020.  Pre-pandemic occupancy rates were at 92%. They currently hover in the mid-80s. Landlords are offering move-in deals and lower rental rates to moderate the decline. Anecdotal data suggests that renters left when their jobs pivoted to virtual work or with the closures of area businesses like restaurants, bars, and sports and music venues. Developers predict the downward trend is temporary.

Homebuyer Mistakes That Can Derail or Delay Closing

Sometimes, first time home buyers don’t know what they don’t know.  Buyers need to be proactive at the start of the home buying process or common mistakes can stall their efforts. Some proactive steps include paying attention to the paperwork when it’s first received to check for errors, making sure the property assessment matches or is under your offer by doing your market research before submitting your offer and keeping a tight rein on big-ticket spending prior to closing.

Weekly Brief – February 15, 2021

One of the biggest unknowns of the real estate market in 2021 is the impact of the lifting of COVD-19 forbearances, and the expiration of foreclosure moratoria.

The number of mortgage loans in forbearance is still quite high, at 5.38%. And the pace of borrowers exiting forbearance plans is the lowest since tracking began in the summer of 2020. This could mean that borrowers are unable to resume regular mortgage payments due to continuing weakness in the economy.

However, some commentators argue that an accelerating economic recovery due to the reduced impact of the COVID-19 pandemic will lead to borrowers being in a position to resume mortgage payments. If this is the case, the rate of foreclosures once moratoria are lifted could be lower than expected.

The other unknown variable is whether we will see further governmental relief targeted to the housing and mortgage industries. This could be an x-factor that upends the normal market forces.

Obviously, the rate of foreclosures will have a significant impact on home prices. Right now, home sales are increasing at a healthy rate. Perhaps even too quickly. Too many foreclosures, however, could shift that pendulum back to stagnant, or even decreasing home prices.

The ultimate outcome of the COVID-19 economic crisis and its impact on housing prices will be a trend to watch this summer and in 2022.