October 2017 Real Estate Market Update – Oakland County, Michigan
We have another market update for you. Another amazing display of numbers as always, we're here to bring you all the value that you're looking for when it comes to real estate in the local market in the Metro Detroit area and more specifically Oakland County. And it truly is amazing to see what's going on in the market right now and just what's been flushed out and bearing itself out here over the last 18 months. Really transitioning from after the crash, we had a big buyers market and then it got a little sideways for a while and then started to slowly transition into a seller's market. And that's where it leads us to today, which is a big-time seller's market. It's been like that the last 18 months or so.
And again, as you've been following, maybe you're just joining us for the first time, but as we've been doing over the last couple of years, just going through the numbers so you can see exactly what is happening. More specifically over the last two years, you can see what is going on in the market. That way you can ultimately make the best decision for you or just know where the market's at. I know everyone's always talked from the dinner table. We're coming up to the holidays and people are always talking about things like this. So this will hopefully aid in your discussion. So we'll jump right into it here.
Days on Market
As you can see, this is October, the last three years basically, ‘15, ‘16, and then this past October. We had been really trimming down almost 10 days, nine days here of last two years of time on market, on average. And in trimming from 50 all way to 41. These numbers again, are you going to tell the same story over and over again? As I have said many times, right? Numbers tell a story. Robert Kiyosaki, he always talks about the numbers telling a story. Whether you run a business or whether you're doing anything, you're doing your accounting for your own family. The numbers tell a story and if you can read that story, you can tell them where they are financially going or where the market's going. So that's what's really important. And remember life just repeats itself. Life is just a series of cycles and market is just a series of cycles. So if you can see things before they happen, that's a good thing.
Active homes on the market
Again, this goes into the inventory shortage that we have and the issues that we have had that made it a seller's market and it's because of this right here. We had almost 7,500 homes in the market active until ‘15 in October and we're down to just above 5,000. So again, a steep decline in the homes on the market.
Months of inventory
Always include this. These are rounded off numbers but I usually include this because it gives you a ratio to give you a gauge of what's going on. But more or less, I just like to explain it. Each month we go through this and what months of inventory is - it's the rate of homes that are selling, the rate at which they're selling. If no other homes came on the market, how long would it take for all of the existing homes to sell? And right now it's about three months. It's been like that, over the last few October's. But again, it gives you an idea of what the market is like just at a quick glance and for a healthy market, usually anywhere from four to six months, probably five months is a healthy market. So obviously we are below that and hence that's why it's a seller's market. And when you get into these other numbers, it tells a story of why this number is the way it is.
New homes in the market
Again, we have a steep decline from two years ago. Last year, we were seeing some inventory shortages already and this just goes to show you that. Almost 100 or less, looks like about 80 or fewer homes on the market this past year. All the numbers tell a story, you know, what kind of story are they telling? It's telling us a story that there's inventory shortage, so it's a good thing for sellers because they're getting more for their home.
Price per square foot
Something that has gone up over the last two years and his has risen greatly and again this is something we've seen over the last 12 to 18 months. All of these numbers, if I stack all of these charts we have side by side by side, you'd see the same story playing out and again going from 106 two years ago to 113 to 122, $7 difference here and an $8 or $9 difference there. Those are big increases over the last year or two. So just things to think of, and again, this is another general rule of thumb. I mean, if you take your home, say you're in Oakland County, for instance, if you took the square footage of your home and you multiply that by $122, that's going to give you approximately what your home value is worth. And obviously, there are a lot of other variables and I'm not seeing a home and being able to give a full analysis of your neighborhood, what's going on, it makes it difficult. But this gives you just a gauge, a general rule of thumb of where your house might be at if you're in that area.
So, lastly, sold property. Again, this number, as you've seen, if you followed us over the last few years, this number does not change very much. There's always about the same number of sold properties because truly there's usually always a good a buyer's market out there. There is always a lot of buyers out there. Generally, that doesn't change too, too much. What changes a lot of time, like as you've seen are the number of people selling or not selling. So that's a lot of times what changes the dynamics of the market and make things fluctuate up and down. And that's why you have some similar numbers here. They're very similar, so you have the same, almost the same number of homes selling, yet you have, a very limited supply of homes to choose from.
Again, it's showing you and all these other numbers bear that out. This is why the days on market decrease, this is why this is below three. That's just it because these numbers are telling a story. And what these things tell us is that the days on market are decreasing because there's a lot of the same buyers are fighting over fewer properties.
So I hope that gives you guys a little window into what's going on in the market. We love doing this for you. We appreciate your time and attention because we know that's the greatest asset that you have and that we all have is your time, attention and energy. And we appreciate all the comments and the questions that we get. We love answering them. So if there is anything that we can answer or anything else that we can go over for you, we love doing it. Throw some comments in here. We get a ton of Snapchats from you guys and Instagram DMs and Facebook messages. But I'm pleased if you have anything that you want us to go over, let us know. We will gladly hash it out. So have an awesome month guys. We look forward to seeing you very soon.