Home Sales Continue to Decline in Much of Downriver as Interest Rates Rise – The News Herald
The Downriver real estate market couldn’t be any easier for home hunters.
Advice from a real estate industry veteran: Follow the three “Ps.”
“Be patient, be prepared, and be persistent,” said Kim Jarvis, a Realtor with Re-Max Innovation in Southgate. “It can be a frustrating challenge and emotional process for buyers.”
After a rough ride during the COVID-19 pandemic, the home sales market has turned to inventory pressure, with rising interest rates and economic uncertainty conspiring to keep many potential home sellers on the sidelines.
Downriver home sales fell 29.7% in September, compared with a year earlier, according to data from Realcomp II, Michigan’s largest multiple listing service.
Realcomp said the inventory of Downriver homes for sale fell 36.1% from the previous month.
The scarcity of supply has helped push up sales prices, according to a RE/MAX Housing report. The median sales price of a Downriver home rose 16.1% to $240,750 in September, compared to a year ago, Re-Max said.
“The reduced supply of homes in the Downriver market contributed to the increase in home prices in September,” said Janet Schneider, president of Re-Max of Southeast Michigan.
Downriver pinches tighter than in Wayne County. Total sales in the county fell 16.7% in September compared to the previous year. Realcomp said sales were down 21.9% in Monroe County.
Inventory is “very low and has been that way for the last three years,” said Jarvis, who has 18 years of experience and is ranked in the top 300 among Southeast Michigan Realtors.
“I don’t see that changing any time soon, partly because of interest rates,” she said.
Thirty-year mortgage interest rates are at 8% – and appear to be rising.
High interest rates have discouraged some current homeowners — especially those with interest rates in the 3% to 4% range — from selling.
Many homeowners who have put their homes on the market are still receiving multiple offers, Jarvis said.
“It doesn’t seem to matter where you are in Downriver, there are multiple offers, often within a day or two,” she said.
The tight competitive market adds to the frustration of potential buyers.
“One client made six offers on different properties,” Jarvis said. “Very respectable offers, but beaten six times by higher and stronger offers.”
Among the lucky home hunters were Micah and Kimberly Collier, Downriver residents whose growing family prompted them to look for a larger home.
By exercising patience and perseverance, the couple’s two-year search paid off when — after making “two or three offers” on other homes — the couple closed the deal on a 2,500-square-foot colonial house in Flat Rock.
“We bought our first house as newlyweds,” Micah said, referring to their 1,600-square-foot home in Southgate. “After two kids, we needed something bigger.”
When it comes to house hunting, Micah said, it helps to hang in there and have “a little bit of faith” that the search will pay off.
He said: “You will be rewarded if you stick to it.”
During the first nine months of the year, Downriver home sales were down 17.8% (3,132 to 2,573) compared to the same period a year earlier, Realcomp said.
Communities reporting double-digit declines during the nine-month period were: Allen Park, down 19% to 255 homes sold; Brownstown, down 18.7% to 225; Flat Rock, down 16% to 23; Grosse Ile, down 20.7% to 92; Huron Township, down 28.7% to 77; Lincoln Park, down 15.9% to 328; Melvindale fell 29.9% to 61; The Rouge River decreased by 16.9% to 49 points; Riverview, down 10.6% to 76; Romulus fell by 27.6% to 142; Southgate fell by 26.8% to 197 points; Taylor fell 17.6% to 482 points. Trenton was down 24% to 130, and Wyandotte, down 15.1% to 220.
The communities that reported an increase in sales during the nine months were: Ecorse, up 7.5% to 51; Rockwood, up 73.7% to 33; and Woodhaven, up 10.3% to 96.
Closed sales in Gibraltar for this period were steady at 33 per nine-month period.
Compared to January-September of last year, average closing prices for the first nine months of this year rose by double digits in Flat Rock, up 14.2% to $305,000; Gibraltar, up 35.8% to $297,500; Rouge River, up 10.8% to $72,000; and Riverview, up 13.8% to $215,000.