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Real Estate Market Trend Predicted to Continue

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Realtors and brokers predict that Metro Detroit home prices will continue their record-breaking trend into the fall and holiday season. Virtual home inspections and online home purchases are likely to return to in-person showings and open houses. In June 2021, single-family real estate sales shattered records with median sales prices at their highest levels ever, and the number of homes available for sale rose for the second straight month. According to Realcomp, the median sales price rose 18.4 percent to $244,000 for single-family homes. Home showings also increased in June, and the average time on the market went from 60 to 22 days.

 

Challenges Continue With Traverse City’s New Construction Market

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Homeowners who want to build in the Traverse City area are facing hurdles. They need to come with cash, a buildable lot, a contractor with a pool of skilled tradesmen, and then more cash to offset the increase in building materials. There has been a 250% increase in lumber prices. The annual average increase is between 3 and 7 percent. Many construction companies are booked months ahead. Those that are available for work are struggling with supply chain issues. Workforce issues also contribute to construction delays.

Detroit Landlords Are Given An Ultimatum

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Detroit Mayor Mike Duggan has given bad landlords an ultimatum. If they don’t clean, sanitize and restore damaged properties from last month’s flood, they’ll be fined $250 a day. The effort may not be enough in the face of the myriad of difficulties renters face. Year-long delays with home repair grants programs, mortgage challenges, over-assessed properties and a tax foreclosure operation have made things hard. For the first time in 50 years, renters outnumber homeowners, but with a high poverty rate and scarce renter’s insurance, renters are struggling after last month’s floods. They don’t qualify for most home repair programs, nor were they protected when their landlords were foreclosed and their homes were put on the auction block. Many Detroit landlords don’t keep their rental properties in good repair. Experts believe that renter-focused policies is the answer.

 

 

The Demand for Single-Story Home Construction Increases

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New single-family housing construction in the Great Lakes region is following a nationwide trend. For the last 4 years, the number of single-story homes being built has gradually increased. The number of two or more storied homes has been decreasing. Although single-story homes are more expensive to build, they appeal to older home buyers who have more money to spend as they downsize their homes. That makes single-story sites very lucrative.

Justice Department Sends Antitrust Signals

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The Justice Department backed out of a proposed settlement with the National Association of Realtors in regards to real-estate agents’ high commissions. Although in the past, the government has brought antitrust cases and then decided to dismiss them, they have never agreed to a proposed settlement and then backed out. There’s speculation that this is a signal from Washington that antitrust enforcers are ready to address the exorbitant brokerage costs that American homeowners pay, often 2 to 3 times higher than the rest of the developed world.

 

Tenants Terrorize Landlord: No Eviction In Sight

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Queens, New York landlord, Vanie Mangal, spends her days supporting Covid 19 patients and her nights facing harrassment from her tenants.  Some of her tenants haven’t paid rent in over 15 months, and she has lost over $36,000 in rent. They’ve also destroyed or damaged her personal property. The federal government and the state of New York imposed eviction moratoriums. The moratoriums have hit small landlords especially hard. An estimated 28 percent of New York’s 2.3 million rental units are owned by landlords who have fewer than five properties. Landlords can seek pandemic financial assistance, but the aid is too slow, and it comes with certain strings attached that limit the actions the landlord can take against unruly tenants. 

Rental Market Experiencing Inflation

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With people continuing to work virtually and relocating to less expensive cities, along with the influx of millennials and Gen Z renters, the rental market is beginning to surge as the economy reopens. Rent prices are up 7.5% nationwide, three times more than normal. Experts predict that rent prices will continue to climb. This could be a warning sign that higher inflation is here to stay longer than the federal government has predicted.

The Housing Market May Be Hitting Bottom

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From April to May, pending home sales rose 8% according to the National Association of Realtors. Economists had projected a !% decrease. The housing marking is attracting buyers due to falling mortgage rates, which fell below 3%. All regions of the country saw an uptick in sales. Economists predict that the market will slowdown in the 2nd half of 2021, citing the flattening in mortgage demand over the past couple months. The Mortgage Bankers Association’s data backs up the prediction. Buyers are facing challenges with the average loan size increasing. Many first-time homebuyers are squeezed out of the market due to entry-level homes for sale.

 

 

 

Outdoor Living Spaces Tip the Scales

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Outdoor living spaces are a tipping point for homebuyers. Buyers are looking to entertain family and friends in pandemic-proof ways. Home owners want access to golf courses, larger yards, attractive landscaping, and outdoor rooms. Previously buyers may have bought a cabin in northern Michigan, but now they want everything just steps away.  People are focusing on updating and upgrading their outdoor spaces as much as their indoor spaces. Lakefront property is hot right now. Listed lakefront houses and condos are on the market for about 18 days.

 

Buyers Continue Bidding Wars

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It continues to be a “dog-eat-dog” world for home buyers. Brokers advise clients to get pre-approval, save, and have some cash to bring to the table. Many home buyers are waiving home inspections, bidding before seeing the home, paying cash, and paying thousands over the asking price to get to the closing table. With more buyers than sellers, the competition is vicious with the average home going for $10,000 over the asking price. Appraisal guarantees are deal-makers, and buyers will have a hard time winning a bid without one.