On a daily basis I am asked whether or not the Michigan real estate market is expected to improve in 2013..
Well, sadly, I’m here today to tell you neither good news nor bad.
It is important to realize when you see or hear statistics about the current Michigan real estate market; these statistics are retrospective. That means the numbers are based on the previous quarter’s activity and do not reflect the immediate increase or decrease in the Michigan real estate market.
The last 12 months have, sadly been the best sales statistics in Michigan real estate within the last several years.
Midsummer of 2012 we saw a dramatic spike in sales activity. Most Michigan real estate brokers I know reported making more sales during the summer market then they had the previous 12 months. Immediately following that spike in sales, however we saw stagnation.
When I try to predict what is going to happen in the Michigan real estate market one of the first numbers I want to know is the current level of Michigan land sales. When the Michigan real estate market crashed in 2008 I knew it would be a long-standing problem because people immediately stopped buying vacant land and in fact canceled contracts to buy building sites in vacant land.
Coupled with a complete shutdown in the new construction of single-family homes in Michigan, we saw many of the builders either close their plats completely or simply hand their entire supply of land back to their banks and enter foreclosure or bankruptcy. Many of these properties are still held by the Michigan banks that made the original loans. It is my understanding these banks are holding these assets in hopes that the Michigan Real Estate market will rebound significantly in the near future.
I do believe these banks in Michigan holding these assets are slightly delusional.
See, one of my favorite metaphors for Michigan real estate is the following: Real estate values drop like a rock, but they drove like a flower.
So when it comes to Michigan real estate market values for 2013, my prediction is that we will see more of the same. In the next 12 months we will see traditional market trends of flat sales until spring. Once the spring market starts to kick in you will see more robust sales all the way through the summer and then they will taper off through the fall.
Currently there are many buyers in the market place even though it is midwinter in their snow on the ground. So my best advice if you’re attempting to sell your Michigan home: DO NOT WAIT UNTIL spring to put your Michigan real estate or home up for sale.
My reasoning is this: the supply of buyers for Michigan Real Estate is steady and currently a LOT of buyers are searching for home in Michigan, which is unusual for this time of year during the holiday season in snow on the ground.
Usually, most home buyers in Michigan act like groundhogs this time of year. They busy themselves with typical holiday activities and usually wait until spring to begin their search. But right now we’re seeing Michigan Real Estate buyers wanting to take advantage of unusually low interest rates. Some of them are actually almost into panic mode because they’re afraid interest rates will go up soon and base year, unnecessarily, that Michigan real estate prices will dramatically increase suddenly.
That is the reason you should have your Michigan real estate or home for sale right now if you are planning to sell your property or Michigan real estate in the next 12 months.
See it’s counter-intuitive, but it makes sense.
Most people withhold their homes from the Michigan real estate market during the winter waiting for spring and then listing their home for sale at the same time everybody else does. Thus, joining a crowded Michigan real Estate market with LOTS o competition.
Why not instead, put your Michigan Real Estate or home up for sale while there are still plenty of buyers out there looking and everybody else has withheld their home from sale. This strategy puts you at an advantage and in a position to capitalize on the existing Michigan buyer pool while there is a limited supply, in essence creating your own sellers’ market.
In summary, don’t expect any dramatic improvements in Michigan real estate prices over the next 12 months, but do look for a dramatic improvement in how many buyers will enter the marketplace due to gradually improving credit scores, improving employment statuses, and new lending programs specifically targeting homebuyers with lesser credit scores and smaller down payments.
If you are intending to sell your Michigan home, land or commercial property then consider the next 12 months your best window of opportunity to liquidate and land whatever’s next in your life