So how's the market? It appears to be holding steady right now. The inventory of homes for sale is a little higher this year versus last, mainly due to softened buyer demand as prices have risen. It is still a seller's market and very competitive among buyers, but not quite to the extent of last year's spring market. I still regularly have buyers running into competitive situations with 10+ offers. Especially, in the $150-250k price range which has extremely high demand.
Interest rates also crept up over the last year to around 5%, but surprisingly, they came back down and are currently sitting around 4%. The number of new residential listings hitting the market is down by about 5% so far in 2019. Until this number starts to increase, our inventory will stay relatively low. Check out the chart below that illustrates the monthly inventory levels over the last five years.
Real estate was a wild ride this spring. Inventory hit an all time low at 0.9 months of inventory this past March. There was extreme competition among buyers in the $120-250k price ranges. Most of my home buyers searched for at least a few months and wrote multiple offers. I educate my buyers on the different criteria the seller will use to evaluate the offer, and we worked to their strong points as best as possible. For example, some people were flexible in their timing, so they offered sellers longer time to occupy the home after closing. Some were tight on timing, but could offer larger down payments and earnest money. All of my buyers were well prepared and writing strong offers.
It has been a whole year since I wrote a real estate market update for the greater Grand Rapids area. Why? It has been the same story for the last two years straight. How many different ways can you say "we have extremely low inventory!"?
As a refresher, inventory is measured by months of supply. Months of supply is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. Months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Our local market has strongly favored sellers the last few years. Although the market has been great for sellers, it has been extremely difficult for buyers trying to purchase, especially first-time buyers who generally have lower down payments.
The article "I Bought a Condo and it Ruined My Life" was posted on Vice recently. It was shared on Facebook with the suggestion that "this is why millenials don't buy homes." Reading through this I couldn't help but notice the similarities of my own housing situation. I also purchased in 2006 at practically the same age, before the housing market crash. However, my outcome was extremely different than Mike Tunison. My house has been a wonderful financial investment.
Zillow has a reputation for not being accurate and their "pre-foreclosures" are part of the problem. I get asked about these all the time by buyers. This home is not for sale. It is labeled as being in the process of foreclosure, but it is not a foreclosed property yet.
When someone stops paying their mortgage, the bank usually will threaten foreclosure after about 3 or 4 missed payments. Once this happens they schedule the property to go to auction at the courthouse. This auction is called the "sheriff's sale". Once the auction is scheduled, it must be printed in financial reports that are public record. Zillow claims they get this information from these financial reports.
It's spring cleaning time again. I don't know about you, but I haven't even started. Some tasks seem more daunting then they really are. The best thing to do is just start somewhere. Checklists and developing routines makes things more efficient and thus easier. Nothing is more satisfying than completing a project and checking it off a list. https://www.cleanmama.net/https://www.cleanmama.net/ is an awesome resource for cleaning and organization tips. There are a bunch of other checklists and such you can download for free on the website. Here are my top two favorite cleaning checklists-
Ken Kuiper Homes, https://www.facebook.com/kenkuiperhomes/, Kentwood, MI 49512
All-in-One Builders, http://www.allin1builders.com/, 1950 Waldorf NW, Grand Rapids, MI 49544, (616) 299-4171, firstname.lastname@example.org
Buying a new home and selling your current one can seem like a daunting task. The biggest struggle for most people is knowing their options and determining a realistic plan of action. Finances will play the largest role in this decision, but other factors are a consideration including the local real estate market, ease of moving, and the cost/availability of the next home and possibly an intermediate place to stay. So what are the different options?
1) Sell First, then Buy
This is probably the most common option people choose. Most people have the financial requirement to sell their current home in order to purchase another. The benefit of this type of move is you don’t have to worry about carrying two mortgage payments. The negative is you will most likely end up moving twice. An inexpensive interim option is to move in with family while searching for your next home. Others opt for flexible apartment leases. Once your home is under contract, you could start looking and bidding on homes.
In September last year, the greater Grand Rapids housing inventory started an uptick and continued for four months straight. This is the first time that has happened in the last five years or so. We went from a yearly low of 1.3 months of inventory up to 1.9 months by the end of 2016. Many were predicting the market to finally level out a little. However, from December through the end of January, inventory suddenly fell back down to 1.4 months. Last spring was a crazy market with buyers sometimes competing with 10+ offers. This year we have even less inventory than last as we lead up to the spring market. Buyers will need to be diligent, patient, and put their best foot forward in the home buying competition. Sellers have the convenience of short market times and multiple offers to choose from if the house is priced right.
If you live in Michigan and own a home, then you absolutely need to know about ice dams. Water intrusion is the number one cause of damage to homes and that damage can be very costly. Ice dams are formed when snow melts on your roof, but freezes when it gets to the eaves (the part of a roof that overhangs the walls of a building). If the ice builds up, it can form a ridge that prevents water from draining. If the water cannot drain properly, there is only one place for it to go, and that is down into your house. This can happen to any roof, regardless of age or condition. The problem lies not with the roof itself, but by heat loss through the attic due to a lack of insulation and ventilation.
Great info on everything real estate.