October 2020 Real Estate Market Update – Wayne County, Michigan
We have your Wayne County October 2020 Real Estate Market Update. Let's jump right into this. We have five years. We've been doing this for five years now. We preface it as every single time with two things - three years of the data because the trend is your friend. We'd have to see the trend because that's the most important thing that's going on here. Because you're investing, Whether you know it or not assets and liabilities, I'm not sure what you're invested in with, your rental properties, maybe your own home. You have to see the trend because one year of data is not going to make any sense, had to see all three years to see which trend line you're on. Then we have the month in arrears because now the data is all finalized and we've got it. So let's dive right into this.
Days on market
Thirty-four two years ago, 40 last year, 36 this year. Again, we're seeing that dipping down a bit, really in all the counties in Southeast Michigan. So low inventory leading to fewer days on market. Wouldn't you know? Econ101.
Active homes on the market
This is a one-day data sample. So the time date that was taken, how many homes are on the market? Five thousand six hundred twenty-one two years ago, 5,985 last year, 3,645. That's how insane the market is right now. We have dang near half the homes in most of the counties. We've got 30%-45% retracements in Oakland County and Wayne County. That's insane. That's insane. So going forward, that's not where I'm guessing, really going to drop. Unless we just magically find houses out of nowhere that close, but we have some massive problems with all. These were already low inventory years. We're in for some trouble going forward. The market is a river. That's great for sellers. Great for sellers. However, buyers get very discouraged at that point. They're going to drop out because they're going in, they're getting beat out on two, four, or ten different offers and they ended up leaving the market. They just go rent or something like that. Right? It goes slow to somebody, especially like the climate, the economic climate.
Months of inventory
Three two years ago, 3.1 last year, and then 1.67 this year. So again, we're seeing that number shredder in half, basically as well. That's at the rate home they're selling, how long would it take to sell every last home with no new homes came in the market? Just to give you context, one to three months is a seller's market. Meaning there's low inventory, prices going up. Four to six months means that it's a balanced market. And then seven-plus means everything is going. The inventory is going up and then prices are coming down. So like 10 years ago when we had that in that crash. So I would expect that again coming forward, that will happen in this decade absolutely. I don't know it's going to happen right now. There needs to be a correction, but we're going to have a time where things crash. It could be - I'll save that for other videos. It's a little bit in-depth but we're going to have the time where this goes back to, we're going to add a one here. We'll make that 11.67.
New homes in the market
Three thousand eighty-four two years ago, 3,309 last year, and then 2,807 this year. That's a month-wide number. So really jiving with this one-day number. There are a lot fewer homes coming into the market going forward. So stay tuned for November, December, January, and February. Remember, these were already slow months, a lot less than the mark here.
Price for square foot
$93 two years ago, $94 last year, and $112 this year. So a big increase. We're seeing a lot fewer homes in the market. They're going off the market faster means prices are going up. People are overbidding on homes. They are big in cash offers. They're making appraisal guarantees. They're writing letters to sellers. They're doing everything they can to get that home. Well, that's why prices are going up. If you multiply that by your square footage, you're going to get approximately the value of your home. More importantly, though, you're going to see the trend here. So the trend is going up. Equity in your home is going up. However, if you want an actual valuation of your home, you have to have someone on our team or an appraiser come and look at the home. You have to get something and have someone look at it that's going to give you an evaluation in your neighborhood, in your area, because this is a county-wide number, remember that. This is more for the trend.
This is really our lagging indicators. It's showing us who's actually closing, sitting at the closing table, closing that home for this month - 1,891 two years ago, 1,913 last year in 2,185 this year. We've seen that across the board as well. A jump up with a lagging indicator. Remember, this is really the end, the culmination of all the last months, the last couple months' data, that glut of homes coming in. It's really kind of starting to fizzle out that up now, and everything is closing. But now going forward, a lot less in the market. It's like I said, unless we find rabbits or pulling houses out of a hat somehow, I don't know what's going to happen here in the next four months. It's going to be a lot less to go around. So buyers are going to be struggling. It's going to hurt a lot. We're in this vicious cycle because sellers, what are they going to do? We do have more people leaving the state than we do incoming. So you could have people of sellers leave the state. But if sellers are you're selling their homes, they're now jumping in as buyers for where they're at a lot fewer homes to find. So this is a weird vicious cycle. However, as I said, prices will go down eventually because we're going to have crashes. We have more people leaving the state of 55 to 45 people leaving the state compared to coming into the state. So that's a deflationary event where prices will kind of come down eventually. Supplies will eventually come up or meet that. Prices will have to actually meet that at some point.
That's our Wayne County Market Update. We'll get more in-depth with these things as we go forward. I know I got some more advanced things here, but I want to give you the basic stuff for now and get in and get out. I appreciate your time and your energy, your attention. It's the most important thing would have. Using our time to feed our mind, to make informed decisions. So appreciate you guys. If you're on the podcast, go to @legacygroupmi and then go and put your questions, comments, concerns there. We'll answer them. And we'll see you guys in the next one.