Hello, and happy fall!
It is with great relief that I report our real estate market here in northern Michigan is ever so slightly becoming friendlier towards buyers. Don't get me wrong, by all measures we are still in a seller's market due to low listing inventory. However, buyers generally have more power during negotiations today than they did 6-12 months ago.
Here is what we're seeing…
First and foremost, we are seeing a decrease in listing inventory and number of sales across every county which we serve. While listing inventory is down, demand from buyers remains relatively strong despite mortgage interest rates remaining high. It's not nearly the buyer-frenzy that it was in '20-21, but any active Realtor that I know still has a healthy amount of active buyer clients. Two of the demographics where I have seen an noticeable decrease in buyer demand:
1. Second home buyers, including short term rental buyers. Many of the second home buyers who remain in the market are cash buyers.
2. Remote-workers relocating here from out of state, which we saw that frequently in 2020-2021. Those calls have also slowed, I assume due to many employers calling workers back to the office.
Sale price trends vary by county. In Grand Traverse & Leelanau, sale prices are still trending upwards, but at a slower rate than in 2021. We seem to be approaching a much more normal - and sustainable - level of appreciation. For Antrim and Benzie: while the data shown below suggests that the median sale price is dipping (as compared to Oct '21), the sale prices throughout the year have been generally stable. NOTE: Leelanau, Antrim & Benzie are all prone to data skews in their averages. All of those counties have a relatively low volume of sales and all it takes is one or two $1.5M+ sales in any given month to dramatically skew the data, so we use median values for these counties. See charts below comparing avg vs. median sale price in each county.
Other trends we're seeing in the market…
Hyper competitive bidding wars are almost at thing of the past. We are still seeing multiple offer scenarios on some listings, but when we do, it's usually only a handful of offers (like 2-3), instead of 15+ offers like we routinely saw last year. We still very occasionally hear about those kind of 15+ offer scenarios, but it's becoming much less common. In the last week of October, there were 24 sales in Grand Traverse County. Out of those 24 sales:
14 sold for under list price
6 sold at list price
4 sold over list price
Average days-on-market (time of listing to time of closing) is approaching 80 days for Grand Traverse County, and assuming a 40 day pending period, that means most listings are on the market for approx. 20 days before accepting an offer.
What this all means for sellers:
It is important for sellers to rely on their Realtors to make a strategic, informed decision about listing price. Over-pricing your listing out of the gate will undoubtedly result in your listing languishing on the market without much activity. Also, with buyers having more power in negotiations now, it's important you're working with an experienced Realtor. Knowing how to successfully negotiate for sellers in today's market conditions requires a different set of skills & knowledge than negotiating for sellers in 2020-2021.
What this all means for buyers:
Inventory will likely remain low, so it might be slim-pickings for awhile. However, it is much less likely that you'll find yourself in a bidding war once you do find something you like. If you're going to offer under list price on a listing, rely on your Realtor to give you the market data you need in order to arrive at an appropriate offer price.