October 2018 Real Estate Market Update – Oakland County, Michigan
We have your Oakland County Real Estate Market Update for October 2018. Let’s jump right into this. I always preface every single market update video with two things and it’s a question we get a lot which is why are we doing the month in arrears and why do we have three years of data and very simple answers. One, because we have all the data now. The month is over. We now have all the data. It’s hot-off-the-press and now we can give that information to you so you can make the best decision for you and your family. That coincides with the other point which is we’re looking at three years of data to see the pattern. We want to see the pattern. “Numbers tell a story” as Robert Kiyosaki always says, and we want to go to see that. We’re basically giving the numerical version of the technical analysis. If you’re a stock investor, real estate, you look at graphs and charts and things like that, there’s uptrends, sideways trends, and there are downtrends. We want to know which way the trend is going. “The trend is your friend” as they say, and we want to be able to make accurate decisions based off of the trends and which way the graph, the chart, the numbers are telling us, right? You don’t want to be going in and trying to plot to sell your home when you know the market’s way down here and we’re trending into this really bad market or what have you. Right? So you want to be able to use the trend and make it your friend. So let’s jump right into this.
Days On Market
DOM. Anytime you see DOM, ADOM, CDOM, additional days on market, cumulative days on market, it really is the average days on market that you are spending until your home is sold. So in Oakland County, we have seen a fairly stable over the last couple of years. Actually, it dropped a little bit in October and it’ll come up again a little bit, so pretty stable or last couple of years, which is nice to see. Nice reprieve.
Active Homes on Market
This now again has kind of come up again a little bit, went down a lot last year and kind of come up again a little bit. This is a one-off number though. So it’s one day in time how many active homes are on the market that day when we drew the data. But because we do three years of data, it gives us a better idea of what was going on at the end of every month, a pattern of what was happening. So again, we’ve seated a lot of homes that were on the market compared to last year, but not as much as 2016. So again, we have fewer homes in the market than normal. We are still under a balanced market as we’ll see here in a second. We’re still in a seller’s market, but things are looking like they’re rebounding back towards a balanced market.
Month of Inventory
And right here we’re going to get into the month of inventory, which MOI stands for months of inventory, which means that the rate homes are currently selling, how long would it take to sell every last home with no new homes coming into the market? And this gives us a simple way, a simple ratio to look and say, “Boom, what kind of market are we in now? What are we looking at?” I don’t need to dig into all these numbers necessarily because now I know with three months of inventory, I know what market we’re in. I know if I’m looking to make a quick decision, if I go into a brand new market, I can see, “Okay, that’s the kind of market they’re in. And what it means just to give you some context, is one to three months of inventory is a seller’s market. Four to six months is a balanced market. And then anything, seven-plus is a buyer’s market. So, you know when there is seven plus, that means there are tons of homes available and it’s a buyer’s market. Buyers are generally getting better prices on homes. Then when you’re down here, the seller’s territory, when we’ve had previous months when we’re in the one, two or three months of inventory, that means there’s not a lot of inventory. There’s either more buyers in the market or the same amount of buyers so it’s just less inventory. That means prices are rising as we’ll see here. Prices have been rising, things like that. It’s more expensive. It’s a seller’s market. They’re getting more for their homes they’re selling. So let me know if any of that doesn’t make sense. Give your questions, comments, concerns about that.
New Homes in the Market
This is a month wide number. This is taking me the whole month into account. How many new listings came onto the market in that month compared to the previous years? And yet we’ve actually had a fairly significant uptick this past October. It’ll be interesting to see going forward how that number plays out because there are historically more homes in the market than it has in the last year in October. So we’re going to see how that plays out. I’m really excited to see the numbers over the next couple months to see what’s going on in the market and give us a really good idea of where that trend is going. Is this uptrend starting to become a sideways trend? Is it starting to become a downwards trend? What is happening? So it’s gonna be very interesting to see.
Price per square foot
Price per square foot is taking your square footage and multiplying it by this number. It’ll give you a rough estimate, are a very rough estimate of what your home is worth. More important because remember, this is a countywide number. If you want a true analysis of your home, you have to have a real estate professional. Someone, myself, our team, a real estate appraiser come in and give you a true analysis report on your home. This is a guide to show you that trend. Again, we want to see the trend in the last couple of years. Where has the price has been going? Well, they’ve been going up, they’ve been trending up. The trend is your friend, but again, you need a true analysis of your home if you want to see an accurate look at your home’s value.
Sold
So sold homes is really a buyer category. It’s really our only buyer category and this is how many buyers are out there, what the buyer pool looks like because this is the number of closed homes in that month in that county. We’ve actually seen this go down a little bit and this has to do with homes are going under contract, getting accepted offers in August and September and now they’re closing in October. So what does that look like? We’ve had real dips in inventory in those months. So you know what, we’re not going to see as many home close this month or in October that we did in the previous October.
So I hope that makes sense for you guys. Let me know if you have any questions, comments or concerns. If you know anyone in Oakland County, I know many of you are in Oakland County, please share this and share with someone who is maybe thinking of selling or buying and needs this information. Whatever it may be, when they’re looking for information and try and do the research, please let them know and push this to their direction, that way they can hopefully get a better understanding of what’s going on so that they can make better decisions for them and their families. So I appreciate you guys more than anything in the world. Your time and energy are humbling and I’m honored to share this time together and bring this to you. We look forward to seeing you in our other videos, in our other market update videos and we’ll see you very soon. And one last thing, we try to keep our comments all that stuff. I know it’s tough. Not everyone wants to put their comments and questions and concerns inside the Facebook feed, but if you feel comfortable enough to do that, please do that. That way we can share and learn from each other inside of the timeline on the comments there. I love getting direct messages and texts from everyone in emails and things like that, but we do want to try to make it more of a community feel. That way people can learn together on the timeline in the comments there. So appreciate you guys. We’ll see you soon.