The downstream real estate market is showing signs of slowing, with price increases moderating and inventories stabilizing.
Year-over-year, July sales fell 13.5% (443-383) while the median price rose 2.3% – to $180,000, according to a sales summary from Realcomp II Ltd., Michigan’s largest multiple listings service.
Days on market also hit 17 from 13 in July 2021, Realcomp said.
Market listings ended July at 597, down one from July 2021.
“The Downriver area continues to be in a market shift that is leading toward a more balanced market,” said Jeanette Schneider, president of Re-Max of Southeast Michigan.
Jim Lucas of EXP Realty in Taylor said “the market is cooling down a bit” heading into the fall.
“Sellers are always looking for the best they can get, with high expectations and high hopes,” he said.
Buyers continue to compete and offers “above asking price” remain common, Lucas said.
But the speed of sales is stabilizing as the market adjusts to rising mortgage rates, an increasingly uncertain national economy and a seasonal change in the pace of sales in the spring and summer.
“The market continues to experience unprecedented numbers, especially median selling prices,” said Karen Kage, Managing Director of Realcomp II. “Those looking to buy should be encouraged by rising inventory levels.”
Of the downstream communities where at least 10 homes sold in July, four showed a slight increase in closed sales from the previous month, according to Realcomp: Brownstown Township, up 24.1% on 36 closings; Flat Rock, up 20% over 12 closes; Taylor, up 10.3% over 75 closes; and Romulus, up 4.5% over 23 closings. Riverview reported 11 closures in July each year.
The median price rose in five communities that reported 10 or more sales: Flat Rock, up 112.5% to $382,000; Township of Huron, up 46.9% to $351,125; Southgate, up 25% to $205,000; Trenton, up 17.5% to 235,000; and Taylor, up 17.0% to $158,000. The median price for each July was $295,000 in Brownstown Township and $135,000 in Lincoln Park.
Realcomp said market listings increased in July in nine communities, compared to the previous month: Allen Park, 36-33; Brownstown Township, 43-31; Flat rock, 17-9; Lincoln Park, 68-54; Melvindale, 24-16; Red River, 17-10; Riverview, 10-9; Romulus, 46-33; and Southgate, 43-31.
Two communities reported an equal number of registrations in July compared to July 2021: Ecorse, 25; and Rockwood, 11.
Realcomp said the median closing price for a home in Wayne County in July was $203,000, up 6.8% from a year earlier.
Lucas said buyers and sellers are increasingly concerned about the impact of rising interest rates, mortgage rates and the inventory of homes for sale.
Nationally, economists and real estate analysts are worried about home sales and home values. A direct debit:
• Home values fell for the first time in a decade, down $366 from a typical home, according to the Zillow Home Value Index.
• Existing home sales fell for the sixth consecutive month, with price increases rising moderately, the National Association of Realtors reported.
• The National Association of Home Builders said new home construction is slowing the residential real estate market. “Tightening monetary policy from the Federal Reserve and persistently high construction costs have caused a housing slump,” said Robert Dietz, chief economist for the builders’ association.
• A slowdown in the housing market is likely in 2023, according to rating and research agency Fitch. “The likelihood of a severe US housing downturn has increased; however, our rating scenario calls for a more moderate pullback that includes a mid-single-digit decline in real estate activity in 2023 and further pressure in 2024,” the agency said.
• The number of housing starts fell by 9.6% in July, according to the US Department of Commerce.