A brief explanation of why there aren’t many homes for sale and what that means for Northville and Novi.
Buyers are hungry, prices are high, yet there are even less homes for sale now than there were last year. Where are all of the sellers, and what does the lack of them mean for the people in Northville and Novi?
WHERE ARE WE NOW?
Residents of Northville and Novi know that home values are up. In fact, they are the highest they have been in eight years. The local and national housing markets saw a fantastic recovery and sellers are thrilled with the high prices. Interest rates are also staying low, keeping buyers hungry with the taste of low monthly payments; the problem is that there are no homes for sale to satisfy their appetite.
The housing inventory has cut nearly in half this year despite the fact that home values have increased. What’s more interesting is that even though the inventory dropped, we actually saw more homes sell this year than last year!
Common sense tells us that if prices get higher then more people will want to sell. So where are all of the sellers?
SERIOUSLY, WHERE ARE THEY?
An article Trulia posted earlier this year regarding the national real estate market likely points to the answer with some key points:
- Homeowners ready to buy their next home can’t afford to, so they aren’t selling. High-end homes have increased in price faster than starter homes, leaving a large gap between the two categories. Average household income is stagnant as well, leaving many would-be buyers unable to buy at the next level. As a result, this means that first-time buyers don’t have as many homes available for them.
- The investors who snatched up all of the foreclosure homes after the crash in 2008 aren’t selling. A lot of would-be buyers are turning to renting, causing a high demand in the rental market. Investors are taking advantage of this by sitting back and collecting rental income, which doesn’t exactly motivate them to sell.
- Some homeowners are still underwater despite high home prices. This group has been shrinking for years now, but it’s still a reality for some households.
OKAY, SO WHAT DOES THAT MEAN FOR NORTHVILLE AND NOVI?
The great news for local residents is that the lack of available homes isn’t scaring our market. Home values are still increasing because of it and interest rates are staying low, keeping buyers motivated. Northville and Novi real estate is alive and well regardless of income level and price point. Just remember to stay educated about what’s happening in our market to be successful: Buyers, know that you’re likely going to have competition when you find a home, but the threat of an interest rate hike makes the fight worth it right now. Sellers, you will have to fine-tune your selling strategy to match your home’s price point; a great market analysis from a realtor is crucial if you want to take advantage of a market that is still in your favor.
Adam Somers
Real Estate Consultant
(734) 751-5508
adam@dimora.com
*All analysis’ and opinions are based off of data from Realcomp II Ltd. for 2014-2016 regarding “number of active listings”, “number of sales,” and “average sales price” on a monthly and annual basis for all residential and condominium sales in Novi and Northville. For more information, please contact Adam Somers at adam@dimora.com.