Western Michigan Spring Market Update 2023

 

 

Supply:

 

The current supply shortage as we see it now in Western Michigan has been a major contributor to the current status quo the market finds itself in. As you will read below we will explain a multitude of factors that have led to higher prices and stiff competition in 2023. 

 

A supply shortage in the real estate market can occur when there are more buyers than available properties for sale. This can happen for a variety of reasons, such as:

 

Low inventory: When there are fewer properties available for sale, it creates a situation where there are more buyers than homes to buy.

 

High demand: If there is a lot of demand for housing, such as in areas with growing populations, the demand for homes can outstrip the supply.

 

Economic factors: Economic conditions, such as low interest rates, can make it more attractive for people to buy homes, leading to increased demand.

 

Local factors: Certain regions or cities may be experiencing a supply shortage due to unique factors, such as limited land availability or zoning restrictions.

 

In general, a supply shortage in the real estate market can lead to higher prices and more competition among buyers. However, it’s important to note that real estate market conditions can vary widely depending on the region and local factors.

 

 

Pending Sales:

 

According to data from the National Association of Realtors, pending home sales in the United States decreased in January 2022. The Pending Home Sales Index (PHSI), which is a forward-looking indicator of home sales based on contract signings, decreased by 2.8% compared to the previous month. This represents a decrease in pending home sales activity across the country.

 

There are several factors that could be contributing to this trend of decreased pending sales. One is the ongoing supply shortage in the real estate market, which has led to increased competition among buyers and higher prices. Additionally, rising interest rates may be making it more difficult for some buyers to afford homes, leading to a decrease in pending sales as the market waits for sellers and buyers to come to terms with the new high interest rate environment. 

 

It’s important to note that the trend of decreased pending sales can vary depending on the region and local factors. Additionally, while pending sales are an important indicator of future home sales activity, they are not a guarantee of actual sales. Nonetheless, the recent trend of decreased pending sales may indicate a slower real estate market in the coming months.

 

 

 

Median Sales Price: 

 

According to data from the National Association of Realtors, the median existing-home price in the United States has been steadily increasing over the past decade. In 2011, the median home price was $164,500, and by 2020, it had risen to $294,000. This represents an increase of approximately 79% over the past 10 years.

 

There are a few factors that have contributed to this trend of rising home prices. One is a shortage of inventory, which has led to increased competition among buyers and higher prices. Additionally, low interest rates prior to late 2022 have made it more affordable for buyers to purchase homes, increasing demand and driving up prices. Although this may be coming to an end as we watch the Federal Reserve Bank increase interest rates in order to taper off inflation and slow down the economy overall. 

 

Some areas may have experienced sharper increases in home prices than others due to factors such as population growth, job growth, or changes in zoning laws. Nonetheless, the overall trend in the United States over the past decade has been one of steadily increasing home prices.