A 2021 Snapshot of the Greater Detroit Real Estate Market

Like the rest of the world in 2020, the Detroit, Michigan real estate market shifted significantly. The shift was driven by changes that saw many ways of life upended, and sent some searching for a home with enough space to now live and work. If the beginning 6 months of 2021 are any guide, some of these trends are here to stay for the foreseeable future, including increased home prices and fewer overall listings.

At the end of the day, supply and demand are the barometer for the real estate market. Local market conditions can follow larger national trends, or they can become subject to unique local conditions which might vary significantly from larger trends.

Buyer education in a market like the 2021 Detroit, MI market conditions can make a huge difference. Understanding terms like seller’s market and bidding war can help you to make informed decisions and be better positioned to buy your next home.

The Detroit, MI Real Estate Market Snapshot

As reported by the local news outlet WXYZ, the median sales price was up 55% when compared with the year prior. Meanwhile the days on market indicator has seen a significant decline, going from 46 days in April of 2020 to just 20 days as of last month. This means homes are being sold at a clip of twice as quickly, on average, than they were just about a year ago.

These are classic indicators of a seller’s market.

Nationally, trends in real estate look much the same when you compare other areas of the country. Inventory has decreased, listing times have decreased, and prices have gone up. In southeast Michigan, for example, inventory currently runs at about a single month’s worth of homes on the market.

This means that the current demand from buyers would snap up all available homes within a month if no new homes were listed. The normal inventory for a more balanced market would run at about six months’ worth of inventory. If you have approximately 1/6th of the normally available inventory, then that means homes are a bit scarce. And when homes are in short supply, those who have one for sale stand to gain.

A Seller’s Market

A seller’s market is most commonly defined as a market where there are more buyers than sellers. In other words, there is less inventory or supply available than there are buyers. Sellers have the advantage in a seller’s market because homes will sell more quickly. Having an abundance of buyers translates into a more competitive process, where many homes can receive multiple bids in excess of the asking price.

Buyers compete with one another, often forgoing more traditional contingency plans and increasing their offers to stand a better chance of landing their next home. As inventories have shrunk over the past year or so, market conditions have only become more competitive.

Quick Tips for Buyers in A Seller’s Market

In search of a new home in the Detroit, MI area? Then time can be of the essence. Here are a few quick tips to help you navigate the current market.

• Work with the right real estate agent. The right agent can help you navigate the current seller’s market, which can be intense and a roller coaster of emotion.
• Move quickly if you find a home or potential home. Don’t get caught thinking about it too much if you want to view the home or make that offer.
• Acknowledge that the seller has the advantage and act accordingly. Keep in mind that with the current market, traditional negotiations are all but out the window. Sellers want buyers with fewer hitches and quicker timelines, otherwise they might worry about missing out.
• Be patient with the market. You may lose out in the competitive bidding process, particularly with some homes selling in hours or days. Don’t get discouraged.
• Don’t settle for less. While the lightning pace of the market is almost dizzying, rushing to buy the first home you see could be a costly mistake. Thinking through your actions and offers.

Range Lending is known for quick times to close. Choosing the right mortgage broker can mean the difference when it comes to landing your next home. Start to finish, Range Lending is known for the quickest turnaround in Macomb, Oakland and Wayne counties in Michigan. Begin the mortgage process today with Range Lending.