Why All Types of Homes Aren’t Selling Quickly

By now everyone has heard that the market is strong and homes are selling quickly, but is that true for all price points?

Buying in Southeast Michigan? Perform a full home search

Selling in Southeast Michigan? Get a free Home Price Evaluation

We know that the real estate market is doing well and homes are selling quickly. However, are homes selling quickly at every price point?

In the chart above, put together by Trulia, starter homes, trade-up homes, and premium homes are shown and separated by the percentage of buyers searching for each type and the percentage of homes listed of each type. If you subtract the homes listed from buyers searching, we can see if there are enough homes available to meet the demand for each type.

For starter homes, we have a -5.7, which means there is not enough inventory and prices will go up. For trade-up homes, we have a -5.3, which also means there is not enough inventory and prices will go up. Both starter and trade-up homes are below demand. 

However, for premium homes, we have a +11, which means the supply is greater than the demand. The upper end of our market is just not seeing the type of demand that the other two price points are. This doesn’t mean premium homes won't sell, it just means we have to price strategically and communicate on a weekly basis regarding foot traffic versus days on market.

“

The demand for lower priced to moderately priced homes is much greater than the demand for higher priced homes.

”

The next graph in the video above, provided by CoreLogic, shows the price appreciation by price category for last year. It shows very similar data compared to the Trulia report. We see that the demand in the lower priced to moderately priced homes, or starter to trade-up homes, is much greater than the higher priced or premium homes.

Sellers at the upper end of our market need to realize that their properties will sell, but they won’t move as quickly as the more affordable homes. For example, if your home is priced at $500,000 and there is more than six months of inventory in that price range, you won’t see value appreciate because your home would be in a balanced market.

If you have any questions about this topic or you are looking to buy or sell a home, please don’t hesitate to give me a call or send me an email. I look forward to hearing from you.

Arati Shares Her Opinion About Kime Realty

Arati- "It was really good. My agent was really helpful and showed us houses around. I would refer them, definitely!"

Are Foreclosures Making a Comeback?

Foreclosures were a dime a dozen after the market crash in 2007. It’s a completely different story today.

Buying in Southeast Michigan? Perform a full home search

Selling in Southeast Michigan? Get a free Home Price Evaluation

A few years back, foreclosures were a popular option for homebuyers, simply because there were so many of them. Although this was the case back in 2007 and 2010, it’s not the same story today.

Here, you can see a chart from CoreLogic that shows the total number of foreclosures between 2007 and 2016 broken down nationally and by state. The chart shows the number of foreclosures in thousands, so we actually saw 7.8 million total foreclosures during this time period.

“

We will stay on top of the data in case anything changes.

”

With interest rates about to rise, should there be worry of foreclosures coming back in a big way? The answer is no. Although foreclosures skyrocketed between 2007 and 2010, they have been falling steadily since. There are more loan modifications being done, and the types of mortgages being secured by buyers today are much more stable and secure than the adjustable-prime rate mortgages we saw just before the market crash.

We will stay on top of the data, as always, but we don’t think foreclosures will be quite so important in the market as they were a few years back. It shouldn’t be of much concern to you.

According to the Chief Economist of CoreLogic, Dr. Frank Nothaft, we can’t ignore the connection between jobs and homeownership. A healthy economy is driven by jobs coupled with consumer confidence that usually leads to homeownership. In our opinion, the economy is much different than it was in 2008. It’s an economy that is conducive to more homeownership, not less.

If you have any questions, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.