Real Estate Market Watch

First Quarter 2007 - Same as Last Year

 by Gerald Frendt       

Last month the Port Huron Times Herald reported that sales were up and quoted Realtors who felt the market had changed for the better by about 16%.  My figures indicated about 9%.  No matter, the market in March came back almost exactly to the level of demand that we experienced in 2006.  I analyze data from two MLS systems and eliminated overlapping information.  While it is likely that some sales will be still be reported, it appears that we topped 2006 by a whopping 2 sales.

The supply of homes had been declining from October, 2006, but that changed in March with a increase of 50 homes.  Many of the sellers that "took a break" during the holiday season are trying to sell again.  The "Months Supply of Housing" increased from 11.3 to 11.6 during the quarter.  I believe supply will continue to grow as we get through the sloppy weather.   

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 two years, with an overall supply climbing from 6.3 months to twelve months, before going through this seasonal "dip".  

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.

The early year optimism has been replaced with a more realistic view that the reasons for Michigan's economic problems have not been addressed, and we have yet to see the effects of automaker's buyouts.