2018 ACK President and
Realtor of the Year
By the end of July, residential median prices are up about 11% this year for all areas in the Northern Michigan Multiple Listing Service. That is consistent with July 2017 that was at 12% and where 2017 ended for the whole year.
Keep in mind that we're talking about the whole residential category across all price ranges. Sellers have continued to push the list price attempting to maximize their return. However, it has resulted in price reductions rather than multiple offer situations like we were seeing earlier in those cases. One factor could be increasing mortgage rates that currently are just over 4.7%. That is approaching a percent higher than last year.
An example of this is a home in Boyne City in a very good location that has been on the market for 45 days, at the time of this post, that was reduced recently by 5%. The importance of pricing real estate property properly IN THE BEGINNING is imperative no matter whether it's a buyers OR sellers market!
THE number one reason a home doesn't sell is that it is priced improperly. The market appreciation either has to come up to the seller's expectations for a sales price, or the seller has to go to it. Guess which wins almost every time! No one determines the market price for the home except the market.
Another factor that continues to affect the market is the lack of homes. The cost of building is getting prohibitive as the prices continue to climb for building materials, labor, and government regulations (code). Government entities and private groups are meeting all over the country to try and come up with solutions for homes that people can buy AND rent.
There are no easy solutions but the fact remains that as long as there is a limited inventory of homes, the prices will continue to rise until there is another outside influence such as an economic downturn, high mortgage interest rates, or some other disaster--weather related or otherwise.