The question of housing inventory in West Michigan is on the minds of many. For the last number of years, a tight housing market — marked by scarcity of listing inventory, rising home prices and fast-paced activity — has made it an interesting time to say the least. Some benefits of these market conditions have been equity gains for sellers (and buyers), increased confidence for sellers and overall a very robust market.
Challenges have resulted too, however. Affordability, stiff competition among homebuyers and a sometimes-frenzied pace for all players in the housing market are a part of our new paradigm. As we roll through our fifth year of historically low inventory levels in West Michigan, will that trend continue? To help answer that question, here are some observations:
Sellers entering the market
The first two months of 2020 showed an increase of 8.6% in the number of listed properties coming to market. That number, logged prior to the pandemic setting in, is notable. It seems that many sellers who had stayed on the sidelines began stepping out in 2020 and moving forward with life plans that included a change in housing.
The pace of new listings understandably took a dip in March and April due to Michigan’s stay-home order, but listings have again been on the increase since. Prices have continued an upward trend, and the market marches forward.
One of the reasons new listings are coming online now is that sellers and their real estate agents have found solutions to the question, “When I sell, what will I buy?” Here are some strategies we’ve seen our agents successfully using to help sellers reach their goals:
- List contingent upon property availability for your next purchase
- Extended possession after closing
- Extend the “pending sale” or sale to closing period
- Delayed offer review to ensure ample market exposure
- Shorten the inspection period.
- Offer nonrefundable earnest money deposit to strengthen an offer
- Locating non-MLS inventory (for sale by owner, or soon to be listed)
- Utilize contingent offers
In general, having one’s “ducks in a row” for a purchase, along with some of these other strategies, has helped sellers who also need to buy.
In the first two months of the year, buyer activity was up, as well. As noted above, seller activity (listings) was up significantly. Buyer activity was up even more. It seems that the increase in inventory choices had stimulated buyers to increased action — and then some. More choice, very favorable interest rates and a renewed appreciation for the benefits of home all mean that buyers have kept a foot on the gas. With pent-up buyer demand still not exhausted, we expect this pace of buyer activity to continue.
So, what does it all mean? Available inventory is likely to remain relatively low for the foreseeable future. However, we believe the market environment is still favorable for sellers to move ahead with their life plans.
Solutions for selling confidently, and in turn buying confidently, are the keys to success. These solutions, along with the duality of increasing prices and favorable rates, continue to fuel a strong market in West Michigan. Even as we all continue to adjust to the changes of 2020, West Michigan real estate will lead the economic rebound and continue to meet the ever-important need for a home.