April 2017 Real Estate Market Update – Oakland County, Michigan
We are back with a market update. This is something we've been bringing to you for almost a year now and little over a year. Right around the year and we have a lot of the same thing. It's interesting, right? We started doing this. A lot of the same trend has been taking place over this past 12 months and more of the same month, this month and as I always promised you - every video you're gonna learn something. I promise you you'll learn something, you'll get something out of it. Obviously, real estate is something that people talk about all the time. People, a lot of times, are afraid to talk about it with people in the industry, but it's something that is worth talking about it every dinner table. It's a conversation that everyone's having all the time and this is one of those ways many times that we want to raise the level of discourse. We've had a lot of people lately. It's a very weird industry. It's an industry that attracts a lot of different kinds of people and we've had people that are just doing things. Let's just say that they're doing stuff that is not really raising the level of discourse, so we're trying to do stuff that's going to raise the level of discourse. It's going to provide a ton of value for you and in this. That's our goal with our YouTube channel, with everything that we do. We bring you a ton of content. We appreciate all of the texts and the snaps and the Instagram messages and everything you guys send us.
We appreciate that a ton and we know that you guys get a kick out of the all these videos and all the content, the stuff that I knew, the stuff that Paul puts out everything. We get a ton of feedback from there. We thank you guys a ton, but we do, as you guys know that I've been watching now for a year. We do our Insider's Report and we do our market update and there are two different things. So the insider's report is a macro level, 30,000-foot view. It's a global economy view. It's something that I guarantee you no one is talking about and it's something that either big passion, there's a lot of people that try to talk about it and they try to get in there and have a conversation about, which is awesome and that's what we want and that's really what that's for.
We've had a couple great conversations and great dialogues over our Facebook lives and it's a really interesting conversation to have. It's something that needs to be had over and over again because this is just the road we're going on and this is our local market update. So we're based here in Clarkston and we deal in Clarkson, obviously, we work with Oakland County and we'd get outside of that a little bit, but we try to focus on our hometown. That's what we know best. That's what we're experts at. And then we deal with Oakland County also, but we do Oakland county because it gives us, being one of the largest counties in the best county, to kind of give you a vision of what's going on in Metro Detroit. So if you guys, again have remembered what we've been talking about the last year, we've got a big inventory shortage and it's a seller's market. The numbers bear that out.
Active homes on the market
So the numbers are showing us again, actives last year in April. And again guys, I've had people ask me why you do the month previously when it's the next month, May, right? Well because that's what we have. We can't do May to the current month because a month hasn't ended. So active listings - we had 5,300, we almost had 1500 this past April. Then we did the April before. So it just goes to show you the inventory shortage.
Days on Market
We're going through days on market, almost cut in half. So the time that a property sat on the market in Oakland County, it was cut in half almost. I mean, that's remarkable, that is absolutely remarkable. Again, it shrank a little bit. These numbers are a little misleading. We don't add in, get the decimal points for you. But we just rounded here. So these numbers are a little bit bigger than they look clearly. There are things that aren't sitting as much as not as homes out there. There are not as many active homes out there. So clearly, the inventory shrank.
Month of inventory
Month of inventory is if homes stopped to be going active in the market right now, how long at this current pace, how long would it take to sell every remaining house on the market? So obviously that is shortened. We've seen a 25 to 30 percent drop. We've been talking about that for a year now. It's the same thing. I mean, our broker here has been doing this for 35 years and it is unbelievable real estate mind and he said he has not seen a shortage like this in the 30 plus years he's been doing real estate. And again, we thought it was bad last year, a year ago in 2016, and even the years before we thought it was bad inventory shortages. I mean, look at this, we're seeing 25 to 30 percent drops in inventory each month for a year now. We've been seeing these kinds of drops. So this is really telling us what's going on in the market and not only that. This means if you guys have people living around the county, these things are happening all around the country as well. It's not just Clarkston, it's not just Oakland County, it's not just Detroit, it's all around the country.
Price per square foot
Again, we're seeing a decrease in supply. So obviously that's raising the prices of homes. It's something that’s good, it's more of a natural bubble if you want to call it that. It's more a natural bubble than we had 10 years ago. Ten years ago we had people just walking in, they could breathe at a heartbeat. So they were getting a loan. Now we have a lot of that cleaned up and that's better. Now we just have natural bubbles. So prices are going up. They're going up because of the shortage of homes. So it's more of a natural progression. Again, in our macro level, our videos and our reports, we talk about how there's going to be a correction at a point that crashed, what have you, that will happen. And again, no one knows what will happen, but it will happen and it's something you have to think about, you have to worry about. I put that out there and I say that because it's important and people should know that there is a lot of people in the real estate industry. I don't just mean realtors. I mean, anyone involved in the real estate industry that doesn't like that I say that, they don't like that I'm putting things out there like that, but it's the truth.
That's our jobs to tell you the truth and that's exactly what will happen. It's been seven to nine years, eight, nine years since the last crash. The market goes into 7 to 9-year cycles and again, these are things we're going to get into. We get into in our Insiders Reports, we talk about more of the global economy. These are things to be prepared. You have to be prepared for it. Again, I just got it where “Rich Dad, Poor Dad” one of the best books of all time. I mean that's obviously my opinion, but if you want to know finance and you want to know how money works, I recommend go and read that book. I just got the new version of it. It's the 20-year anniversary and what does he say? That one of the first things is your house is not an asset, so as long as you know getting houses are, that's fine. We all need houses to live, but you just have to remind yourself, what's the vocabulary we're using? It's not an asset. The bank's assets. Not your asset, it's the bank's asset. If you look at a balance sheet, what column is your house and it's in the liability column because you're paying on it each month. If you've got a rental property and give you positive cash flow, that's different now, then it becomes your asset. So it's just knowing the language. That book changed my life. “Why Do We Want You To Be Rich” by Kiyosaki, “Donald Trump,” “Rich Dad, Poor Dad.” Those things changed my life, coming up on a decade ago and that really changed the course of my life and the way I looked at money and currency, real estate business. It changed my vocabulary. So great books. I recommend those books. I always try to recommend a book to you guys
We have almost the same number of sold, so I mean we have a lot less than the market but almost the same number of sold. So that is a by-product obviously. Right? I should say the price going up here is a byproduct of the same number of homes being sold and a lot less being on the market.
So that's your update guys. That was April and we've been doing this for a year basically. And we've seen basically the same thing. We've seen a 25 anywhere from the 20 to 30 percent drop in inventory. That's why it's a crazy time for buyers right now. They're really struggling. The silver lining is you have all-time low-interest rates, but it's just a battle out there and that's all there is to it.
So salaries are really making out. It's something they have to think about then they had either have to go into the rental market or they have to then go in and buy something else in a market that is a battle itself. So, it's something to think about on both sides. Obviously, for sellers, it is a solid market. You're making money. Hopefully most people, if not all, it's their close almost. A lot of people, not everybody, but a lot of people are above the place where they were 10 years ago when the market crashed. So I hope this gives you guys some insight into the market right now and we began to appreciate everything that you guys do in supporting us and we appreciate all the questions and comments. We have a layer site.
We've got a list, a mile long of this stuff that we're going to answer over the next year or two videos. We're going to be one stop shop for you to get all of your real estate questions answered and now we're looking forward to that greatly. We're gonna keep bringing you the market updates so you know exactly what's going on here in Clarkston, in Oakland County and Metro Detroit, and we’re bringing you the Insider’s Reports because that is extremely important as well. Obviously, it was tough of Donald Trump going on in wars and that's stuff we keep tabs on and we study each month, so we appreciate you guys a ton. I look forward to seeing you guys next time.