Push-Pull in Residential Real Estate: Median Sale Prices Remain High While Buyers Contend with Inventory & Affordability

City of Detroit continues climb with more listings and nearly 30% increase in median home sale price

Real Estate Market Commentary:
As the summer draws to a close, multiple opposing factors and trends are competing to define the direction of the real estate market. After the Federal Reserve lowered its benchmark interest rate on July 31, 30-year mortgage rates continued to decline, approaching alltime lows last seen in 2016. Yet most experts agree these reductions are unlikely to bring sufficient relief, at least in the short term, for first-time home buyers. The lack of affordable inventory and the persistence of historically high housing prices continue to affect the housing market, leading to lower-than-expected existing home sales at the national level.

Closed Sales decreased 2.8 percent for Residential homes and 4.5 percent for Condo homes. Pending Sales decreased 0.4 percent for Residential homes and 7.4 percent for Condo homes. Inventory decreased 13.8 percent for Residential homes but increased 0.6 percent for Condo homes.

The Median Sales Price increased 6.7 percent to $190,000 for Residential homes and 0.2 percent to $168,900 for Condo homes. Days on Market increased 2.9 percent for Residential homes and 21.4 percent for Condo homes. Months Supply of Inventory decreased 12.5 percent for Residential homes but increased 3.4 percent for Condo homes.

As many homeowners refinanced their homes to take advantage of declining interest rates, consumer confidence in housing was reported to be at historically high levels. Even so, real estate professionals will need to monitor the market for signs of continued imbalances. Although the inventory of affordable homes at this point remains largely stable, it is stable at historically low levels, which may continue to push prices higher and affect potential buyers across the U.S.

Single-Family Real Estate Points of Interest:

• Closed sales decreased by 3% from 9,522 to 9,232 for the month of August Y-O-Y.
• Median Sales Price increased by 6.3% from $175,900 to $187,000 for the month of August Y-O-Y.
• Approximately 1 in 4 new listings (3,455 of 13,568 or 26%) were listed and pended (same month).
• An average of 6.5 showings were conducted in August. This was down only slightly by .6 days Y-O-Y.
• Overall, Days on Market increased by 1-day Y-O-Y from 34 to 35 days.
• 2.5% of Residential and Condo On-Market listings are flagged as “lender mediated”. These listings include foreclosures and those marked as short sales. This percentage increased by .5% Y-O-Y based on the recalculated percentage for August 2018.
• Single-Family Real Estate Trends for August

* = Recalculated figures pulled from Realcomp’s MLS statistical database 9/11/2019