Home sales dropped 0.6 percent in 2019 while the median sales price increased 4.7 percent year-over-year, according to RE/MAX of Southeastern Michigan’s annual review that was released today.
In 2019, 48,024 homes were sold, down from 2018’s 48,308 units and 2017’s 50,678 dwellings. The median sales price for 2019 was $217,788, up from $208,030 in 2018 and $196,000 in 2017.
Homes spent 36 days on the market on average, an increase of three days from 2018. Homes spent 36 days on the market on average in 2017 as well.
“Sellers enjoyed a market that saw rising home values, solid demand by buyers, and a relatively short time frame needed to sell their home,” says Jeanette Schneider, vice president of RE/MAX of Southeastern Michigan. “And while an inventory shortage still plagued the market, 2019 provided low interest rates and fewer multiple bid scenarios, allowing buyers to have success in buying a home. It is as close to a normal market that we have had in a decade. The city of Detroit garnered attention by posting the biggest increase in home prices, and Macomb County saw increases in both home values and sales. Overall, it was a solid year for everyone.”
Home sales decreased by 4.7 percent in Detroit from 4,188 homes sold in 2018 to 3,992 in 2019. However, the city’s median sales price increased the most – 22.6 percent to $40,000 from $32,625 – compared to average prices in Livingston, Macomb, Oakland, and Wayne counties.
Home sales increased by 2.2 percent to 2,766 from 2,706 and by 1.4 percent to 10,922 from 10,768 in Livingston and Macomb counties, respectively. Home sales decreased in Oakland and Wayne counties by 0.6 percent to 16,236 from 16,340 and by 2.1 percent from 18,494 to 18,100, respectively.
Home prices were the highest in Livingston County at $285,000, a 5.6 percent increase from 2018’s $270,000. Macomb County saw the biggest increase of the counties – a 6.3 percent jump from $173,900 to $184,900. Prices increased by 2.7 percent in Oakland County from $259,368 to $266,250. In Wayne County, prices increased 4.8 percent from $128,850 to $135,000.
Homes spent an average of 51 days on the market in Detroit, an increase from 48 in 2018. In Livingston County, they spent 40 days on the market, up from 36. Homes in Wayne County spent 36 days on the market, up from 33, while these numbers were 35 from 32 and 34 from 30 in Oakland and Macomb counties, respectively.
In December, national home sales were up significantly – 13.5 percent – while they dropped 3.3 percent in metro Detroit. RE/MAX experts say this is due to a lack of inventory, not a lack of buyer interest, which is high due to low interest rates.
“In what has been an up and down year for home sales, December saw sales lower than last year,” says Schneider. “Low interest rates and high buyer demand are still factors, which contribute to the supply of inventory remaining low. Pending sales were up in December, which means much of the existing inventory has been scooped up. At the same time, new listings taken were down, so we expect January to continue the pattern we have seen over the past year.”
The month saw 3,296 homes sold, down from November 2019’s 3,551 and December 2018’s 3,407.
The median sales price increased 6.8 percent to $214,250 year-over-year from $200,600. However, this price is drop from November 2019’s $215,250. Nationally, the median sales price increased 11.1 percent to $266,000.
Homes spent an average of 43 days on the market, two more days year-over-year and five more days month-over-month. Nationally, homes spent 54 days on the market on average, down one day from the previous year.
There was a 2.4 months’ supply of homes, down from 2.6 months’ the previous year and 2.7 months’ the previous month. Across the country, there was a 3.3 months’ supply. A supply of six months is considered balanced.
Livingston County was the only county that saw an increase in home sales – a 1.1 percent jump from 174 homes sold the previous year to 176 homes sold. Numbers decreased in the rest of the counties and Detroit by 0.7 percent to 763 homes sold in Macomb County, 0.6 percent to 1,093 homes sold in Oakland County, 7.4 percent to 1,264 homes sold in Wayne County, and 7.5 percent to 297 homes in Detroit.
The median price increased in all areas, and Detroit saw the biggest jump – a 20.8 percent increase to $43,500. The price increased by 9.9 percent to $285,000 and 9.8 percent to $135,000 in Livingston and Wayne counties, respectively. Macomb County saw a 7.1 percent increase to $182,000, and Oakland County saw a 2 percent increase to $255,000.
RE/MAX also released its housing outlook for the region. One trend, dubbed Hipsturbia, is expected to see millennials moving to the suburbs as they have families and want to own homes. However, the group is still seeking urban amenities such as walkability, dining, and entertainment options. Communities with walkable neighborhoods and active downtowns are expected to be popular with millennial buyers.
Mortgage rates are expected to remain low in 2020, under 4 percent. Home values are expected to continue to rise as the supply of available homes continues to shrink. There is no indication that the supply of homes for sale will increase in 2020. Baby boomers and Gen Xers are staying in their homes, which has led to the median length of time in a home to reach 13.3 years.
As technology advances, using cloud-based platforms to share data or view properties will become more commonplace.