April 2020 Real Estate Market Update – Wayne County, Michigan
We have your Wayne County April 2020 Real Estate Market Update. The market's decimated in calamity. I hope that you are doing well. I hope that you're safe. I hope your family is safe. I hope you're most importantly taking some positives and taking some wins out of this. I just wrote down this morning 20 different things my wife and I have done. Jessica and I have changed things we've improved in our family. I've improved in my life. She's improving her life because of this time, the two months at home and being together. It really has changed a lot that we think about and what we have always known as important but haven't always focused as much as we like on it. So I'm appreciative of the time we've had at home. I hope that you found some positive things to come out of all this.
I know there's been a lot of bad, a lot of negative. I have a feeling that we're having unseen. We're just kind of at the tip of the spear, really, of what we're going to see going forward. I'm afraid that we just haven't seen anything yet. And that's concerning. However, in great crisis lies great opportunity and that's what I'm hopeful for. So let's jump right into this.
I always preface this with two things. We have three years of data that way we can see the trend. It's more important than ever to see the trend now. In times like this is why we've been doing this for four-plus years. So you can see the trend, see what is going on in that way you can make the best decision for you and your family. This is the biggest investment, the biggest liability you most likely have in your life. It's the bank's assets, not your assets, the bank's asset. You might have some equity in your home and that can become an asset by you taking a home equity line out and then using it to purchase an asset, something that gives you cash flow every month. You could sell it and take that money tax-free and go put it on something else. That could be an asset. But generally, it's a liability and that's where you have to know what's going on so you know where you're positioned, you know how your balance sheet looks. So let's jump right into this three years of data. As I said, you can see the trend and we always have the month in arrears because we have all the data now. It's hot off the press. So let's jump right into this.
Days on the market
Forty-three two years ago, 53 last year and 45 this year. So we've seen it again, very consistent. We've seen kind of a little bit down up, a little bit and then down back down a little bit because we have such a demand crush, a deflationary event of buyers not being able to do anything which you're going to see down here later. We have such a big crush there that it's hurting some stats and helping others. So we're going to see that more here in a minute actually and it's going to be incredible going forward what happens I think when we do these market stats. I'm a big data guy, a numbers guy. I love looking at this and it helps inform me as to how to position our clients, how to position myself. Am I going to buy apartments? Are you going to buy single-family homes? Whatever it may be. You have to know the data. I've got to know what I'm doing so that way I can give advice to our vendors, our contractors. I can give advice to our clients, our investors. You have to be able to know what you're talking about in order to make decisions that are best for you and your family.
Active homes in the market
This is the number of active homes that were there on the day that data was taken. So 3,819 two years ago, 4,534 last year, it's incredible. And then 4,343 this year. So we're going down a little bit. Again, very similar numbers across the board. We're seeing it already start to decline here a little bit when this data was taken.
Months of inventory
This is where it starts to be a little crazy. The month of inventory is the rate the homes are selling, how long would it take to sell every last home with no new homes coming on the market? Two, three, and then four this year. So we're seeing that very common theme across the board here in Metro Detroit as well. This is huge. You would think because the rate of homes being down, you would think this number would go way down and we backed down to one. But no, we've had such a deflationary event. It's such a demand crush that of buyers not being able to do anything made that number actually go up, which is so counter-intuitive. It doesn't make any sense at all. And if the wind would cooperate, like the economy, we'd be having a great day. Right? So this is just incredible. This is why the numbers are so important. You have to be able to read and you have to make sure you can read that language, understand that language. That's really a different language. You have to really understand that, see, and read through the numbers that way you know what's going on.
This is the number of new homes that were actually listed throughout the entire month. This is a month-wide number - 3065 two years ago, 3,283 last year, and then 934 this year. Are you kidding me? That's insanity. I mean, we're down - what, 60%, 75%, 70%. That's incredible! There are other numbers here - 75% down in other counties, 50% down, 66% down. This is remarkable. I don't even know. That's such a big drop. I don't know what the stats are, but it's somewhere around that. We're down probably 70%. It's just incredible. Absolutely incredible. It's only unbelievable from a numbers perspective. These are all people being affected, that's what we have to remember. These are all people being affected, not being able to sell their home, not being able to buy, being stuck, having to pull-off on transactions. It's just a catastrophe. This is why we've been doing this for years and I've been saying, prefacing these things for years that way people could have some context. When things did happen, we would know, we're able to see what was going on.
Price per square foot
Eighty-eight dollars two years ago, $92 last year to $102 this year. Again in concert with fewer days on the market. We're so close to the eye of the storm. There's that event where people - it's real estate, move slow and people think we're still micro, still going up when the bottom dropped out from under them. They don't even know yet. There's the coyote chasing the roadrunner. There haven't even looked off the cliff. They've gone off the cliff and haven't looked down yet and that's I believe where we are. You talk to some experts and they believe that we're going to be having millions of foreclosures next year or two and you talk to some other people that think more micro. They say, "We're gonna be totally fine. Look, prices are going up. We have a huge inventory crush." That isn't even a battle that plays out, let's just say that. That's going to be the battle that plays out over the next few years. I tend to believe that we're gonna be more on the devastation side. But again, devastation doesn't mean you have to be included in that. If you know what you're doing and you know how to position yourself properly, you can prosper because of that.
This is actually the people closing sitting on the closing table and closing on their home. One thousand six hundred ninety-nine two years ago, 1,774 last year and then 1,026 this year. A huge drop-off again. This - I guess I say every single time - that's why I've said it for years. This number doesn't change that much. Look, you can see it again, very consistent. It doesn't change much unless there's a catastrophe, an anomaly. Something like a Black Swan event. That's exactly what we had. That's exactly why we see this just falling through the floor because people aren't being able to close. We had one deal that fell apart because of this, fortunately, one, but I know many, many others who've had deals fall apart in the last month and a half, two months because of the crisis.
This is huge, guys. But this is your Wayne County Market Update for April 2020. I hope you guys got something out of this. If you know someone that's in the area or live in this area, please tag them, share them, like it, comment on a question, ask questions at @legacygroupmi, on our Facebook or YouTube channel. That's where you can go and we will see your question or comment there. We appreciate your time and your energy. It's the most important asset we have now more than ever. I think a lot of us are realizing that. I think that if we utilize this time correctly, you can position yourself for big things ahead because of a great crisis. There's a great opportunity. So I appreciate you guys and we'll see you on the next one.