July 2017 Real Estate Market Update – Oakland County, Michigan
We have something special for you today. We have the July Market Update. This is your Metro Detroit market real estate update. You don't have to go piling through all the data and trying to pluck all this out on your own. We get to do this for you, special every single month. That way you can just see exactly what's going on and you don't have to go through all the millions of pages of data and try to find it on your own so we're cutting right to it, getting it right to you guys. That way you can see what's going on with the real estate and you can make an informed decision. So let's jump right into it here. We have a couple of different categories here.
Let us go over these. Every single month we've gone through is about two years now. If you go back into our YouTube channel and they're all stored there. You can go see the past couple of years, what's been going on so we can see some real trends and we actually added two years ago. We used to just do this year and then last year, but now we've added two years back. That way you can see a true pattern as to what's going on. This is so that you can see and make informed decisions with the real estate market as to what's going on, where things are going, where things are bad,
Days on Market
This is the first one days on market just kind of shows you about how long a home must stay cumulatively on the market. So we had two years ago, 43 days. We've cut that down 10 days in two years to 33, which is, I mean one month. That's unheard of. I mean that's just remarkable how much or how little time that actually homes spending on the market. So this is truly remarkable. Right now we're seeing this in Clarkston and Rochester and Royal Oaks, Milford, and all those areas. It's just crazy. Right now we're seeing it downriver. We're seeing on the east side.
Active homes on the market
This is shocking really. How many active homes are there on the market two years ago compared to how many are on the market here in July, this past July. Again these are this July. We have to go use the month prior because that's when we have all the data obviously. So people always ask, “Well hey, if it's August right now, why are you doing July?” That's because we have the data. Right? So we go back to July, last month. This is last month and then we have July last year and then July two years ago. Look at that in half. Then thousand three hundred, literally almost in half. And then 52, almost 5,300. Again, a sharp decrease. Last year, like we thought last year it was pretty bad. Like that was the way we looked at it and you're like, “Wow, this inventory is pretty low.” Look at that. I mean it's just slashed again, I mean those 30 to 40 percent and we're even seeing a 50 percent drop over a two year period. So it's just remarkable. And again, these things and this number kind of gives me an indication.
Month of inventory
These are rounded numbers. So this is four months of inventory, two months of inventory. What that is at the rate of current sales, if there are no more homes that came in the market, how long would it take to get rid of the existing homes in the market? Well, this number usually over the last few months, last year probably really has been hovered around two. It's been 1.98 and things like that. So we just kind of round for this, the purpose of this, but this gives you an idea of how healthy the market generally is. Somewhere between four and six months of inventory, four or five months of inventory. So we are dangerously low levels of inventory right now. That's why for sellers, it's such an amazing time to sell. Just so incredible because you have a ton of buyers out there and you have very low inventory, so they're not competing with many people. It's not much for people to choose from. The problem is the one thing that obviously our sellers run into in are out there. Where do you go after that? What are you doing? Really, a lot of the options are to go rent after that, go live in someone's basement or try to buy something somewhere. Maybe you're out of state, maybe you're in a different city, maybe you're going up north, whatever it may be. That's the challenge. That's a real challenge because if you're just selling a home and then trying to make some money off of it and then jump into a home, another home down the street, it's gonna be very tough. So you usually have some type of drastic change you're making if you're trying to really benefit from it. So that's one thing that's tough. That's probably why we're seeing such a low inventory because people are like, “Hey Brandon, if I get it, it's a really good time to sell right now, but where do I go?” And for those people maybe it doesn't make a ton of sense to move right now. Maybe it's in a different market, will make more sense. My whole point is to give you guys massive value, show you exactly what's going on the market. That way you can make informed decisions because everyone's decisions are going to be different.
New homes in the market
These are the number of new listings coming on the market. So this is total that are active at that time. This is the number of new listings coming on in July. Now you could already see some slowdowns a little bit. Obviously, you had 4,739 and 3,800. So the last few years are fairly similar. But actually seeing, it's been somewhat steady over this last two years, but a little drop off obviously from two years ago. So because of all this, we have this affected obviously, right?
Price per square foot
So your price per square foot was $109, $112 and now it's $126. I mean again that's unbelievable. So it does, it leads you to these questions like, “Oh, what should we do?” Some people in situations, they're going to be fine. They're going to be able to go do something, they're gonna be able to move and again, felt like every house out there is going to be at the very top of its price range. I mean you just never know. Everyone's in different situations. So that's something you have to make a decision on your own as to what you want to get into and taking those risks, right? To jump in a buyer's market and have that crazy buyer pool.
Fairly stable. Again, obviously it's down just because there's low inventory so the sales are down a bit, but that is the market update. That's what is going on in the market right now in Metro Detroit. And then it gives you a good idea as to what's going on and this is really the Oakland County area and you guys know exactly what's going on. This is a pretty good indicator of what's going on, whether you're in Grand Rapids or whether you're in Kansas City, Missouri or in Los Angeles or somewhere. This is pretty much the case all around the country. The statistics are definitely gonna be different. But we're seeing a lot of places. I mean, I talked to a lot of lenders, we're using vendors and there are some people that do stuff out of state in different states. They say there's a lot of markets that are even crazier than the Metro Detroit right now. So it just goes to show you there's a lot going on in the real estate market.
One of the reasons I think that we have some down inventory is because we have investors who invested after the great recession and they got houses for great prices for a number of years. They're making great cash flow right now. Awesome cash flow. In fact, a lot of them are just sitting on it. They're like, “Hey, why would I sell? Why? Why would I get rid of all this housing when I'm making great cash flow? There's a shortage everywhere of housing, so why would I sell?” So it's really kind of backing things up. The other part of that is we have a lot of builders that aren't in the market anymore and there are a lot of big builders that are gone. They've moved out into the great recession, they moved out of state, they moved down south and moved out east. We have more regional builders here now, but we don't have those massive constructions and new building sites going up where we had that 10, 15 years ago.
So those are some of the big reasons. It's over the last month or so we saw it changed just a little bit of the previous months where we're really smoking hot. But this past month still obviously is great for sellers. Changed a little bit, I hate to say balanced a little bit and plateaued a little bit. It seemed like it did a little bit and just bearing these numbers out a little bit and just kind of looking at it, hey did a little bit. But again, this is something you guys can make a decision for you, your family and that's all this is for. So take it with a grain of salt. Obviously, this is right from the MLS so you don't have to go sifting through hours and hours and pages of pages and information.
Again, I'm Brandon Gentile, Legacy Group Real Estate Team. We look forward to doing this every month. You look out for our other videos, our Insiders report, which is our macro 30,000-foot view of the economy, global economy and currency, what's going on with that because this is the micro view. There's the micro and there's the macro, right? So we, this is our micro view, what's going on in our communities and there is macros insider's report and that's what we're looking at, the global economy and what's going on there and a lot of the interesting things going on there. So we appreciate you guys a ton. Thank you for tuning in and we look forward to seeing you guys very, very soon.