A newly published September sales report via the Detroit Free Press indicates that residential real estate sales in metro Detroit could be topping.
The number of units sold in southeastern Michigan was down 5.7% in Sept. compared with the same month last year, while the median sale price continued to inch higher by 5.5% to $169,900.
Real Estate Statistics For Detroit
RealComp, a Farmington Hills-based multiple listing service, provided new housing data to Detroit Free Press, which showed the tri-county metro Detroit area could be nearing a peak in the residential real estate market. The report said Oakland County felt the most pain, with residential homes sales down 8.9% to 1,399 last month, compared with 1,529 in September 2017.
The median sale price of homes in Oakland County rose 1.8%, far less than the metro’s average, to $235,000. The number of listings collapsed 13.6% to 5,209.
“The decline in home sales during September is a combination of the seasonality of the market along with buyers taking in rising home prices and watching where interest rates are heading,” said Jeanette Schneider, vice president of RE/MAX of Southeastern Michigan, in a press release. “Even with fewer sales, we still have a tight supply of homes and that keeps pricing rising in a market that favors sellers.”
Schneider noted that national housing trends show year-over-year sales dropped by 11.6%, although the median sales price was up 5.6%.
We reported in late Sept. that Bank of America rang the proverbial bell on the US real estate market, warning that existing home sales have peaked, reflecting declining affordability, greater price reductions and deteriorating housing sentiment. In the Sept. report from chief economist Michelle Meyer, the bank warned that “the housing market is no longer a tailwind for the economy but rather a headwind.”
There were 23,832 homes in 18 counties of southwestern Michigan on the market last month, 15% less than September 2017, according to RealComp.
RealComp warned that real estate professionals “are pointing to 2018 as the final period in a long string of sentences touting several happy years of buyer demand.”
“Although residential real estate should continue along a mostly positive line for the rest of the year, rising prices and interest rates coupled with salary stagnation and a generational trend toward home purchase delay or even disinterest could create an environment of declining sales,” the listing service added.
The bottom line: higher borrowing costs — and higher home values — only make it tougher for millennials to make a deal and buy a home. The 30-year fixed mortgage rate could be at 5.55% in Nov. 2019, according to Robert Dye, chief economist for Dallas-based Comerica. The too-hot-to-handle housing market in metro Detroit has now plateaued.