The deep freeze marches on! Real estate activity continues to be held back across all areas. The good news is, unlike restaurants and other retail, our “lost” business will come back when the weather clears! The weather makes it tough to analyze where the underlying market is moving. Our web activity continues to match 2013 and sales are not off as much as property showing appointments, so it looks like buyers are still finding a way to purchase properties.
For the five counties in Southeast Michigan (Wayne, Oakland, Washtenaw, Macomb and Livingston), property showing activity has been off 23% compared to the first two months of 2013, while new sale contracts written were off about 9% and new listings were off 15%. With property showings off in January and February, we can expect slower March sales (compared to last year).
The term “slower,” of course, is relative. It is still a very fast paced market, even in February, with half of all sales coming from homes on the market 30 days or less (one forth of all sales from properties on the market 10 days or less). Our Months Supply of Inventory is at its lowest yet, at 2.8 months. For the 30 days or less listing inventory, which is what most of the buyers are chasing, it is 1.6 months.
So when will all these buyers and sellers be released from their snowy cocoons? We don’t need 70-degree weather; just a good snowmelt will get things going. It will begin in April and really jump up in May. If our math is correct there will be a 10-15% jump in activity in April and May over what we saw last year. Remember this will be catch up business, the market is still strong, but the wild pent up demand of 2012 and 2013 has gone down. Once the weather effect is accounted for, the market should settle back down to a bit slower than 2013 in terms of homes sold.
For a little market insight, we spotlight below the relationship between price and time on the market. Not all homes are selling instantly. Time on market data can help sellers understand what to expect when they put their home on the market. From the data below, we can see that multiple bids will typically occur within the first 10 days or less. If your home is not sold within the first 30 days, expect (on average) a 7% or more price reduction before you will attract any offers. After 90 days, 12% or more.