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 MARKET TRENDS   

 

Home prices nationwide, including distressed sales, increased year over year by 3.6% in May 2019 compared with May 2018 and increased month over month by 0.9 % in May 2019 compared with April 2019.

The CoreLogic HPI Forecast indicates that home prices will increase by 5.6% on a year-over-year basis from May 2019 to May 2020. On a month-over-month basis, home prices are expected to increase by 0.8% from May 2019 to June 2019.

The current housing trends are indicated as stable to increasing throughout most of Southeast Michigan according to local MLS (Multi-List Services) data and the Case-Shiller Index.  It should be noted this applies to the overall marketplace, but not all areas of the State.

In the past few years there has been declining low-end market listings and expanding numbers of upper-end listings.  A key factor contributing to the decline in number of entry-level listings is that in most market areas the distressed inventories left over from the recession are gone.  In 2017 inventories were lower than they have been in over 20 years. 

The shrinking inventory levels are expected to continue at least in the short-term. Southeast Michigan inventory levels were typically 15% to 20% lower in 2017 than in 2016. In spite of low inventories, the actual number of Southeast Michigan sales was only down 1%.  Demand is expected to remain strong as record numbers of millennial buyers look for their first homes and are now the largest demographic segment of purchasers.  Continued strong demand combined with limited inventory levels will continue to elevate prices.  However, rising interest rates and depleted inventory could counteract that demand and may slow price growth. 

The commercial real estate market has seen value growth within the past few years.  Economic development has surged since 2016.  Most vacant industrial space has been absorbed, however, office and retail-type buildings continue to have higher vacancy rates.  The specialty retail segment has seen the most growth especially in the form of neighborhood mini-shopping center/strip-mall-type buildings and those centered around freeway exits with fast food, hotels and highway service facilities.  Big box store expansion along with traditional brick and mortar retail are in a mode of rediscovery due to the impact of internet sales.