Housing Market Update October 2015

Real estate is local.  That being said, there are things that happen nationally to affect all markets.  One of them is interest rates.

USA Today ran an article today that quoted San Franciso Federal Reserve President John Williams as saying there is a “very strong case” (their quotes) for rates to rise next month – if the economy continues to improve.

Earlier this year I had the occasion to hear, in person, the National Association of Realtors Chief Economist Lawrence Yun.  He went through a ton of stats and indicators that graphically showed how much the economy has improved.  But, he said, it seems that people just “don’t feel it.”  That was holding back home sales.  Question – do you feel it? 

I’ve kept that in mind and I ask that of people I meet occasionally.  Not a lot are feeling it.  They ‘see’ it – with new construction, with homes selling quickly, once vacant strip malls filling up again, lower unemployment figures – they just don’t personally ‘feel’ it.  But let’s get back to the Federal Reserve.

The Fed’s perspective seems to be that gradual rate increases beginning now lower the risk of a run up in inflation later.  They can always stop raising rates if the economy weakens.  Bob’s Prediction – look for up to a quarter point increase in December or January.

What is happening locally?

Rental demand remains high and rental rates continue to slowly increase. I think that will continue for the foreseeable future.  First-time buyers are not the force they once were. Perhaps because they ‘don’t feel it’ yet?  I don’t know, but there are not as many of them as there used to be.

We’ve seen cash buyers decrease, too.  Sure, a lot of them were investors buying lower priced properties but there were also some higher priced buyers paying cash for move-in condition homes.  As of the end of October 2015 for Livingston County, there were a total of 2828 sales. Only 219 were cash buyers (7.7%).

I fully expect home prices to continue their rise.  Part of that is with the lower price point inventory shortage. Everything I’ve been reading says our area should see at least 3%-5% appreciation in the next year. 

Locally, Howell, Brighton and the SE Livingston County area, homes under $250,000 will continue to sell very fast if they are priced correctly (within 2%-3% of their true value).  Sellers – trying to squeak that extra percent of two from a buyer could shoot you in the foot.  Buyers today are more educated than ever before.

Tighter lending standards have also had an effect, but if you’re 680 or better you should be able to get a loan.

 If you’re a first-time buyer, I can give you a short ‘buyer information’ course that will fill in a lot of blanks with the entire home buying process.  If you have a property to sell, please contact me for a complimentary home valuation and a tailored advertising/marketing discussion.  My information is on the sidebar of this blog.  I’m a full-time residential real estate professional and a Senior Real Estate Specialist. I work western Oakland, northern Washtenaw and all of Livingston County, especially Howell, Brighton, Hartland and Pinckney. 

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