Real Estate Market Watch

Fourth Quarter Brings Mixed Signals!

 by Gerald Frendt       

The Port Huron Residential Real Estate Market is comprised of approximately 22,500 households in the Cities of Port Huron and Marysville, along with Port Huron, Fort Gratiot, Burtchville, Kimball and Clyde Townships. 

The National Association of Realtors defines a "Buyers Market" as a market where the supply of homes currently on the market exceeds the historical demand for homes by more than six months.  For example, if a market normally has 100 homes a month selling and there is more than 600 homes on the market, it would meet this definition.

By this definition the Port Huron Market for homes has been in a severe Buyers Market for more than four years, with an overall supply climbing from 6.3 months, in October, 2004, to 13.0 as of Jan 1, 2009, and down from 14.1, three months ago.  The current supply of 784 homes is down approximately 80 homes from three months ago - mostly a seasonal adjustment.  Demand has increased slightly for the past two quarters when compared to the same times last year - first time that has happened in four years - maybe indicating that we have "bottomed out" at about 715 sales per year.  Properties priced below $100,000 comprise 63% of the market, while more than 84% of the market is priced below $200,000.   The most notable change is that there are two distinct markets - the privately owned homes and the homes owned by financial institutions.  There are two MLS systems that serve St. Clair County, and most Realtors belong to both, but not all.  In order to get accurate statistics, I combine data from both and then eliminate the duplicate properties.  MiRealSource MLS requires the broker to identify whether the home is owned privately, or a bank or government institution.  RealComp MLS has just recently required this information, and their data is not complete in this regard.  Therefore, the following data is not a complete picture of the market, but the results are so dramatic that we don't need a perfect picture.  In St. Clair County, there is currently a 6.2 month supply, nearly double from last quarter, of institutional owned homes, and a 23.2 month supply (BUYERS MARKET), of privately owned homes.  The "blended average" for all homes is 14.1 months (MiRealSource data only).  Buyers are drawn to the "fire sale" prices being offered on foreclosed properties.  Many of these properties are selling in the first few days on the market and they are often attracting multiple offers.  Quite often buyers will bid higher prices than the listing price.  Those that don't sell right away receive regular and sizable price reductions.  Meanwhile the privately owned properties sit on the sidelines - they are not in the game.  

There is great variation, within the market, depending on price range, location, and various other factors. Evidence indicates that those homes priced over $200,000, are competing in a more difficult market than those priced under $200,000. Our study breaks the market into twelve price ranges, and while there is great variation, all would be classified as "Buyers Markets".  

If selling, it is helpful to know how many buyers will likely "surface" during your time on the market, and how many homes you will be competing with for those buyers.  Your market strategy should take into account a price range of $10,000 to $25,000, with homes of similar location, age, size, and amenities.  Homes are still selling and the sellers who "know the market" have an advantage in attracting a buyer to their home.