We have your Oakland County September 2018 market update. Let’s jump right into this and I’m going to preface this with two things. I preface every market update video with. We still get questions about why we do the month previous and why we have three years of data. We do the month previous in arrears because we want the entire scope of data, we want the entire month. All the data has now come in, we have it and now we are giving it to you. That’s why we go in arrears. The second part of this is the three years of the data. We do the three years of data that way you can see the pattern. If I just showed you 2018, it wouldn’t make any sense to you. So that’s why we have three years of data. That way you can see the pattern of what’s going on.
A stock investor, a real estate investor, many business owners, and investors will use fundamental analysis or they’ll use technical analysis. This is a form of technical analysis where a lot of times you see, you know, we’re all familiar with stock charts and going like this and doing its thing. This is just the numeric version of that and what this shows us basically right now the market’s starting to kind of go in a sideways trend. This is an upward strand and then this is a sideways strand. So, that’s what it’s doing. Basically, it’s cooling off a little bit. Interest rates are rising, there was some uncertainty with the political landscape and geopolitics. So, that’s why we have the market cooling off a little bit and that’s why things have eased if you will.
So let’s jump right into this.
Days on Market
Days on market is DOM. This is average of a home sitting on the market in Oakland County. This has now gone down 10 days or last two years in September. So again, we can still say that “Hey, it is still more of a seller’s market and we still have a solid decrease. Even decreased a few days from last year.”
Active Homes on the Market
This is a one-off snapshot one day at the end of September, so it doesn’t give you a full scope of what’s going on, but how many homes were active at the end of that month? We definitely have less. We have about 500 less from two years ago. We actually went down way more last year and then came up again a little bit. So we’re seeing that actually in every county right now in Metro Detroit, we’re seeing the old bump up from the year previous. Sign of things to come possibly like we were talking about this the last couple of months. There have been some anomalies, some things happening, interest rates, like we talked about, some stuff that is kind of affecting the market.
Month of Inventory
MOI is months of inventory, at the rate homes are selling currently., if no new homes came in the market, how long would it take to sell every last home? And that’s MOI. And it gives you just a simple ratio as to where the market is. Is it a buyer’s market, a seller’s market? What kind of market is it? Four to six months is just a balanced market, an even market. Anything should I say seven-plus is a buyer’s market. Anything three and under is a seller’s market.
So that gives you an idea where we’re at. Just under a balanced market, we’re obviously still a seller’s market. We can tell by some of these other numbers. That ratio, that simple ratio gives you a quick glance as to what’s going on in the market.
New Homes in the Market
So this is more of a broad scope. It’s a full month. Unlike active homes in the market, how many new listings came onto the market in that month? And as you can see, pretty dang stable over the last couple of years in September. So really not too much change at all. Literally one home off from last year and only a little bit from two years ago.
Price per Square Foot,
This has gone up almost $20 a square foot in the last two years. Again, the inventory previous to this has been very low, so we’ve had increasing price per square foot and that’s why some of this is still played out and we have obviously fewer homes in the market than we did two years ago. That’s why we see such a big difference here which is great. It’s good. You don’t want it to be at $200, but we want them to come up a little bit. We don’t want them to be down in the 80-90 range where they were after the crash. So really quick though, touching on this, this is taking your square footage to get an easy evaluation, a very simple and rudimentary valuation on your home. You would take this and you would multiply that by your square footage and that would give you a rough valuation of your home. Now, you don’t want to go to market with that number. You need to still do a comparative market analysis, you have to have a real estate professional, you got to have an appraiser, someone there that can give you an actual analysis on your home, come walk your home, look at the neighborhood comparable, see what’s going on. This is just a countywide number of Oakland County. What’s going on? So it includes good cities, bad cities, medium cities. It’s a countywide number. That way you can get an idea of where your home is at but really more or less we want to see what that pattern is, right? We’ve talked about the chart earlier, it’s an uptrend, so it’s going up, right? And that’s where we want to see and that way we can predict even what’s going to happen in the future. Like we talked about earlier. It’s just technical analysis, what kind of trend do we have. As they say in technical analysis, especially in the stock market, the trend is your friend. You don’t fight the trend.
The last one here is kind of a buyer statistic. This one is down a lot, actually. It was down a little 300 from ’16 to ’17 and down another 300 from ’17 to ’18. So again, there’s been less activity overall, fewer homes. These are sold, so that means they’re closing. So the homes are going under contract maybe 30 or 60 days prior. There’s a lot less inventory in those months. That’s why there are fewer closings as well. But again, across the board, we can see a little bit of a slowdown in the market because of the things we spoke about. Because of rising interest rates because of political uncertainty because of geopolitical uncertainty. There’s a lot of things affecting it. This time of year seemed to kind of bring that out. Obviously in Michigan especially, we get the seasonal change. We have people going back to school, kids going back to school, maybe work, jobs are changing, people are thinking about changing jobs. A lot of weird things going on. And really it’s kind of the crux of the year. People are getting back into the main sports and things like that. So a lot of interesting things are kind of happening and that’s what kind of leads to falling and late August, September, early October, a little bit of craziness and then usually the last couple months, October, November are pretty good months and it slows down again in December.
So hopefully that kind of answers everything for you guys, especially here in Oakland County. I appreciate you guys watching and your time, your attention and energy because it is the most important thing we have. So I appreciate that more than anything. Please let us know if there’s anything we can do, our team, our business here, and any questions, comments, concerns, anything else you’d like to see at all and we would love to bring it to you. So I appreciate you guys and we’ll see you on the other market updates.