Buying a house in Detroit is easier now, but not cheaper
Detroit’s real estate market is starting to level off, according to the latest MLS data from Realcomp.
Why it matters: After two-plus years of plummeting inventory and sky-high home prices, Detroit-area buyers have waited a long time for a little relief.
What’s happening: Inventory, inflation and interest rates are driving the market, Jeanette Schneider, president of RE/MAX of Southeastern Michigan, said.
- Inflation makes it harder for folks to save up for a down payment.
- Higher interest rates mean higher monthly mortgage payments, which puts buying out of reach for some.
- Less demand and more inventory leads to lower home prices.
By the numbers:
- Inventory of homes for sale in Detroit was up 25.5% in August.
- Closed sales are down 17.2% compared with this time last year.
- And while median home prices are up 13.3% year over year, they have fallen in recent months.
- For example, in June, the median sales price was $100,250 and in August it was $85,000.
- 30.3% of Detroit listings had price drops in August, up 12.4 points from last year.
- 23.7% of homes sold for over asking price, a 5.3-point decrease from last year.
Zoom out: What we're seeing now is in line with 2019 and the pre-pandemic market, Karen Kage, chief executive of Realcomp, said.
- She's been in real estate for 43 years and says conditions in 2020/2021 were highly unusual.
- Looking at a five-year period, however, Detroit's home values have appreciated healthfully.
What it means: Even though Detroit isn't seeing the inventory rebound quite like other parts of the country, local buyers still have more options than early 2022 and 2021, Schneider said.
- A less-frenzied market means buyers can take their time touring, offer closer to asking price and get an inspection.
What they're watching: Mortgage rates. How those change, or not, over the next several months will have a big impact on the market.
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