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The best description I've seen of the current state of the US housing market was from Bloomberg News last week, which stated that we are in “an uneasy state of equilibrium.” While our real estate market here in northern Michigan is definitely faring better than many other markets across the country, I think all of us here can still relate to the “uneasy state of equilibrium” sentiment. The spark-notes version of this market update is that inventory is extremely low, homes are sitting on the market a bit longer now, and sale prices continue to climb, slowly.
We are hurting for listing inventory right now. Northern Michigan has always been a seasonal market, with the amount of new listings decreasing around the holidays and not picking up again until early spring. However, what we're seeing right now goes beyond the normal seasonal slow down. Comparing November 2021 to November of this year… we saw a 6% decrease in # of new listings in Grand Traverse County, and a 35% decrease in Leelanau County. With the decrease in new listings comes a decrease in number of sales.. sales are down 27% in Grand Traverse County and 57% in Leelanau (Nov ‘22 compared to Nov ’21).
What this all means for sellers:
If buyer demand continues to drop due to interest rates & recession fears, AND we see the normal influx of listings in spring/summer, then it could mean longer days-on-market and price drops for sellers this summer. If you want to sell within the next 6 months, I would aim to list in early April at the latest, before the possible influx of spring/summer listings.
Also: pricing matters so much right now. It's crucial that you work with your Realtor to determine a listing price that is informed by current market data.
What this all means for buyers:
One of my favorite aspects of the current market is that generally speaking, buyers no longer need to include appraisal gap coverage in their offer in order to get it accepted. I haven't written appraisal coverage into an offer in over 5 months now. In 2020-2021, unless you were a cash buyer, it was almost impossible to get a seller to consider your offer without including appraisal gap coverage. It was hugely frustrating for a lot of buyers, especially first time buyers. Another pro to being a buyer in today's market: if issues do come up in the inspection, it's now much easier to negotiate some concessions or repairs.
