Thursday, July 25, 2013

Real estate market stabilizing despite inventory shortage

GRAND RAPIDS, MI – The “fast and furious” pace of real estate sales in the first six months of 2013 is showing some signs of stabilizing, according to Terry Westbrook, president of the Grand Rapids Association of Realtors (GRAR).

The biggest challenge for Realtors remains a lack of inventory, Westbrook said. The average home that closed in June was on the market for just 49 days compared to 68 days one year earlier.
Through the first six months of 2013, the average home was on the market for less than three months, a 12-year low, according to the association’s monthly activity report.
“It’s still the same old story. If you list something and if it’s reasonably priced, it sells quickly,” Westbrook said. “It’s such a change from a few years ago.”
While new listings were up 4.4 percent for the first half of the year, home sales were up 29 percent, according to GRAR figures. A total of 5,151 home sales were closed in the first six months compared to 4,087 sales in 2012.
The average home sold for $161,182 in June, an increase of almost 17 percent over last year’s average June sale price of $138,472.
“It’s getting much more attractive for people to go out and list their property,” Westbrook said.
Through the first six months of 2013, the average home sold for $148,325, a 2.4 percent increase over the first six months of 2012.
Westbrook said he expects to see some stability return to the market as interest rates stabilize and parents find homes before the start of the school year.
So far this year, Westbrook said the hottest markets in the Grand Rapids area have been in the neighborhoods and suburbs closest to the “Medical Mile” that has developed on the northeast edge of downtown.
“East Grand Rapids really jumped off the charts for a while,” he said.
The “middle class” suburbs of Wyoming, Kentwood and some Grand Rapids neighborhoods are still waiting for the market to return to its former strength, Westbrook said.
“They’re coming back, but they haven’t come back as quickly as some of the more affluent areas,” he said.
For the remainder of the year, Westbrook said he expects to see home prices to continue to rise along with mortgage interest rates.
“Everything is going to continue to go up. So the longer you wait, the more it’s going to cost.”

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