‘It’s not crazy; it’s complicated’ – The News Herald
For nearly half a century in real estate, Doris LaBeau has seen the home sales market go up, down and reverse.
When asked to assess today’s real estate scene – troubled by a lingering pandemic and disrupted by an uncertain economy – she says succinctly:
“It’s not crazy; it is complicated.”
LaBeau, co-owner and broker at Re-Max Masters in Flat Rock and a 49-year real estate veteran, said the home sales market is resetting, with economic conditions and social forces shaping the changes.
Among those cited by LaBeau and others:
• An inflation rate that has reached a 40-year high, driving up interest rates, increasing the cost of borrowing and mortgages and raising fears of a recession.
• A weakened Wall Street that has drained trillions from the 401(k) investments and retirement savings of millions of Americans.
• Rapidly rising food and gas prices, forcing consumers to adjust their budgets and spending.
Ever-changing corporate policies guiding work-from-home practices that thrived during the height of the pandemic.
• The constant increase in rents, pushing many consumers towards home ownership.
• Signs of decline in new home construction. The Home Builders Association of Southeastern Michigan said the number of permits for single-family homes fell 31% in April, compared to the previous month.
• A trend among national investment companies to buy up residential real estate, frustrating individuals and families looking for a home. Among the sellers: Owners cashing in during a period of higher closing prices.
• Mortgage industry job cuts as interest rates cool the mortgage refinance market. Detroit-based Rocket Companies, parent company of Quicken Loans, offered voluntary buyouts to 8% of its staff. Industry cuts could slow mortgage processing for buyers.
• Changing credit scores as potential buyers juggle spending, credit and wealth to keep up with inflation. Recalculated scores can disrupt and delay mortgage approvals.
“Changes are happening,” LaBeau said, adding that personal considerations influence the real estate market just as strongly as traditional considerations such as schools, closeness to family and public safety.
“What happens in the market every day is based on the individual decisions of retirees, people moving, homeowners cashing in, moving to smaller homes to meet family needs…and so on,” said she declared.
“So who decides to sell and say, ‘Now is my time’, has a lot to do with our inventory. … The purchasing power of buyers will be adjusted. So those in a hurry can slow down a bit, say things like, “I can live where I am, adjust my finances and allow the economic readjustment to happen, and then move on.”
“Those who are starting out will have more patience, maybe, because they haven’t participated in the battle so far. I believe there will be sellers who will be remorseful that they didn’t jump into the market sooner, so there could be an increase in supply throughout the summer.
Karen Kage, Managing Director of Realcomp II Ltd., said, “Any increase in inventory is good news for the market. As the summer season continues, it will be interesting to see if this is the shape of things to come.
Jeanette Schneider, president of Re-Max of Southeast Michigan, said “”
“There is a slight shift happening with some buyers stepping back due to rising interest rates resulting in fewer multiple offers on homes. … Existing homes and new builds are in limited supply , so we expect the market to remain active during the summer.
The bottom line for downstream real estate: Prices are rising, competitive bidding continues, and overall sales are slowing. Downstream market highlights, based on May sales data:
The median price rose 14.8% — to $186,500, compared to May 2021, Realcomp said.
Compared to the month a year earlier, Re-Max said, total sales in May were down 11.3%.
The downstream market ended May with 389 listings of homes for sale, an increase of 0.8% over the previous year, Realcomp reported.
Of the downstream communities with at least 10 sales each year, three showed an increase in home sales in May, compared to May 2021, Realcomp said: Brownstown Township, (26-25); Grosse Ile, (17-14); and Romulus, (25-23). Thirteen Trenton homes sold in May and previous month.
Labeau said the search for a home on Grosse Île has benefited from recent repairs and the reopening of the free bridge, while Brownstown and Romulus – with easy access to highways – are attracting potential buyers aware of rising prices. gasoline prices.
Realcomp said four communities showed a slight increase in pending sales at the end of May, compared to the end of May 2021: Huron Township (13-11); Taylor (85-67); Trenton (28-22) and Woodhaven (18-13).