May 2020 Real Estate Market Update Oakland County, Michigan
We have your Oakland County May 2020 Real Estate Market Update. Hopefully, you and your family are doing well. Hopefully, nobody is infected with this disease. Everyone is sound. We appreciate you guys joining us here. We've said this many times, but we've been doing this for five years now. We've never had anything like this happen, what we experienced the last couple of months. But we're going to do this through hell or high water. We're gonna keep bringing you this every month because most people's biggest investment they make is their home. So we need to know these data that way we can make sound decisions. This is the data I use. This is the data I use all the time to help make my own investment decisions with a rental real estate, with multi-family real estate. It helps me with helping our clients, our investors, our business partners. So this is the data that I use as a jumping-off point to know where we are and what we're doing. So let's jump right into this, May 2020.
We do it in arrears because we have all the data. It's hot off the press. The month is closed up. We have all of it at hand. We have three years of data because the trend is our friend in investing, right? We want to see the pattern. If we just gave you one year of data, it wouldn't make any sense.
Days on market
Thirty-eight days on market two years ago, 46 last year, and then 55 this year. A big increase over the last couple of years on market active number of homes. This is a one-day sample size. So the time the data was taken, how many homes were active at that time? Four thousand five hundred sixty-eight two years ago, 5,180 last year, and then 4,379 this past May. So again, we're seeing a big drop-off compared to last year. This is across the board - the number of homes that are actively on the market because we had such low new listings over the last few months. So remember, some of these are lagging indicators.
Months of inventory
We had 2 two years ago, 2 last year and then six this year, tripling. We were seeing doubling and tripling of the month of inventory and across the board in Metro Detroit. What that means is that at the rate homes are selling, how long would it take to sell every home if no new homes came on the market? So just to give you context, one to three months is a seller's market, meaning there's not a lot of homes and prices are going up. Four to six months is balanced and seven-plus is a buyer's market, meaning buyers are getting good deals. There's a lot of homes available and prices are coming down. So we are entering on a balanced territory and we're going to be possibly entering a buyer's market soon. This is the first time in10 years ago, seven or eight, nine years. We've seen this kind of data truly. So buyers getting better deals if you will.
New homes in the market
This is the number of new homes listed that month. So this is a month-wide number. How many new homes were listed new this past month? Four thousand fifty-six two years ago, 4,190 last year, and then 3,461 this year. Again, significant drop-off. We're seeing about the same percentage drop-off of new listings going in the market, across the board, in the different counties. Again, it's going to be interesting. We are already hemorrhaging homes in these years, and there's less going on the market now. So again, it's going to be interesting to see going forward in the months succeeding this, what happens, and where the data goes, where it takes us.
Price per square foot
One hundred thirty-six dollars a square foot 2 years ago, $135 last year, $115 this year. Again, we are seeing a drop-off in price over the last couple - well, overall the counties I should say, and over the last month. So we're seeing this everywhere. This is the trend. You want to be able to see the trend, the pattern because this is a county-wide number. If you take this multiplied by your square footage, they'll give you your value. If you want your actual value, you have to have someone on our team or an appraiser. Someone to gonna goes to your house gives you an actual value. However, this shows you the pattern, at least for the County. Which way is our price trending? What kind of equity do you have in your home? Everything is trending downward. These numbers are in such flux that the market honestly doesn't even know which way it's going. Some of these numbers are pointing out. Some of them are pointing down. A lot of things you can't figure out until you get to the year-end or a year or two later, and then look back and see which way things are flowing.
We're in a race right now of how much inventory there is compared to how many buyers are in the market. On the buyer side, it's hard to tell a lot of times how many buyers in the market. You can look at mortgage applications and things like that. You can look at sold properties, but it's art. It's hard to tell a lot of times who's actually in the market and who's not. We can look at listings and when we have that data, but it's hard when you don't have both sides.
Number of sold
Two years ago was 2,183. Last year was 2,102. And then this year was 791. Again, slashed, two-thirds gone. We're seeing that across the board, 60% to 80%, 60% to 75% drop-off in the number of people actually closing on a home and purchasing home. So that is incredible. We had lower inventory and not much available in the last few months. So hopefully that picks up because we have more being listed. So hopefully that picks up. We are seeing the market being tortured right now. We, fortunately, haven't experienced many problems at all with people backing out of deals or appraisals or stuff like that. But I have heard of a lot of problems happening. So it doesn't surprise me that the numbers look like this. Thoughts and prayers to everyone and people that are affected financially or physically.
I hope this gives you some perspective as to what's going on and helps you and enables you to make better choices going forward. So appreciate you guys. That's the Oakland County Market Update for May 2020. If you're on the podcast, go to @legacygroupmi. Go see the video there. The question, comment, concern there. If you know someone in the area, please share with them and tag them, you think they might find it helpful and we appreciate your time and your energy because it's the most important asset we have. Thanks, guys. We'll see you at the next one. [inaudible].