November '24 Market Report
Inventory Woes and Pricing Gains
Sales Trends:
Post-pandemic sales in Southeast Michigan peaked in 2022 but have since declined. The market in 2024 started slow, trailing 2023 through the first half, but has recently caught up to last year’s pace. Despite strong demand, inventory shortages, elevated interest rates, and a lack of move-in-ready listings have significantly limited sales over the past two years. Through October 31, year-to-date sales held steady at 33,865 units, matching 2023’s performance but marking a 16% drop from 2022 and a 24% decline from the 2021 peak.
Values: Average Sale Price and Price Per Square Foot
The pandemic amplified the previous issue of high demand with low supply. In the surge from 2020 to 2021, average sale prices and price per square foot soared by 15% and 18%, respectively. Price increases slowed to 6% in 2022 and just 1% in 2023, but in 2024, average prices are up 9%. Recent price increases have been fueled largely by the expansion of upper- end markets with the simultaneous shrinking of more affordable entry-level markets. The current average sale price of $334,927 and price per square foot of $199, are up 30% and 36% compared to 2020.
Listings Taken:
Listings peaked in 2022, with 62,847 properties hitting the market. However, the number of new listings has steadily declined, with 2024 year-to-date listings at 51,926, down 2% from 2023 and 17% from 2022. The lack of fresh, quality inventory continues to restrict both sales and price growth.
Looking Ahead:
Through year-end and into 2025, demand will continue to exceed supply. Inventory shortages, interest rates and rising property taxes (due to increased values over the past few years) will continue to challenge first-time and entry level buyers. Upper-end markets will be more balanced.
In the short run, expect the frequency of year-end price reductions to rise in an effort to move tired inventory. Average price will temporarily drop due to inventory quality, but will recover as fresh new listings arrive early in 2025. Market cycles will continue to create opportunities for those who understand and embrace them.
