Oxford Township MI, Real Estate | Why Has Housing Supply Increased As Sales Have Slowed Down?
Team Success Listing LLC
If you are looking to buy a home in Oxford MI, as real estate agents, we want to be prepared to ensure that you are given the best buying experience with knowledge and expertise to guide you along the way. One of the methods we use is to research the current inventory almost on a daily basis, we want to know where are the best deals for our clients when it comes to purchasing a new home in the Oxford Township area.
In the last 30 days, 38 homes have sold at an average price increase of 7.0% over last year at this time and sold within 16 days on market. 59 new listings with an average list price of $296k and 3.9 months supply of housing still means we are in a sellers market.
Today, we would like to talk to you about “Why Has Housing Supply Increased as Sales Have Slowed Down?“
According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the inventory of homes for sale this year compared to last year has increased for the last four months, all while sales of existing homes have slowed compared to last year’s numbers.
For over three years leading up to this point, the exact opposite was true; Inventory dropped as sales soared.
NAR’s Chief Economist Lawrence Yun shed some light on what could be contributing to this shift,
“This is the lowest existing home sales level since November 2015. A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”
Let’s take a deeper look:
Interest Rates
Since January, 30-year fixed mortgage interest rates have increased nearly a full percentage point (from 3.95% to 4.9%). Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association are all in agreement that rates will continue to increase to about 5.2% over the next 12 months.
“The rise in rates paired with this very strong price appreciation absolutely is slowing housing,” said Fannie Mae’s Chief Economist Doug Duncan.
Even though rates are higher than they’ve been in a decade, they still remain below the average for the 1970s, 80s, 90s, and 2000s!
Mismatch of Inventory
Elizabeth Mendenhall, President of NAR, said it best, “Despite small month over month increases, the share of first-time buyers in the market continues to underwhelm because there are simply not enough listings in their price range.”
Prices of starter and trade-up homes have appreciated faster than their higher-priced counterparts. Over the last 5 years, the lowest-priced homes have appreciated by 47% while the highest-priced homes have appreciated by only 24%.
According to the Institute of Luxury Home Market’s Luxury Market Report, the $1M-and-up price range is now experiencing a buyer’s market. This means that supply (inventory) has finally caught up with demand and buyers are in the driver’s seat when it comes to negotiations. Additionally, many listings in this price range have experienced price cuts in order to entice buyers to put in offers.
Natural Disasters
Although not fully to blame for the national shortage in sales and inventory, natural disasters like Hurricane Florence, Hurricane Michael, and the wildfires on the West Coast have certainly had an impact.
Bottom Line
Additional inventory coming to market could help normalize the housing market and allow incomes to catch up to home prices. For more information about sales and inventory in our Oxford area, let’s get together so we can help you make the best decision for you and your family.
Source … KCM Donald Horne Blog
If you have any questions about Oxford MI, the schools, the amenities or the surrounding community, don’t hesitate to call on us at 810-338-0628 or send us an email to: teamsuccesslisting@gmail.com We will be happy to help you.
Are you considering selling your home? If you are, we would love to meet with you soon to show you what comparable properties have recently sold for, give you an estimate of your home’s current market value and review with you our marketing program.
Donald Horne, Broker / Owner | Team Success Listing LLC
810-338-0628 | teamsuccesslisting@gmail.com
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