In the world of real estate, recent headlines may appear disheartening, but beneath the surface, a promising trend is emerging. U.S. sales of existing homes have seen a dip, falling to a 13-year low with a 2.0% month-over-month and a 15.4% year-over-year decline, according to the National Association of REALTORS® (NAR).

What’s Causing this Shift?

Surging interest rates and soaring sales prices are among the culprits, making homeownership seem out of reach for many prospective buyers. While purchase activity has taken a hit compared to last year, and rising interest rates are keeping current homeowners from selling, there's a silver lining that's creating a buzz in the real estate market: low inventory is translating to higher sales prices.

Local Market Snapshot: Washtenaw County

Let's zoom in on Washtenaw County, where we can witness this optimistic trend firsthand. While new listings for Single Family homes have decreased by 1.1%, Townhouse/Condo homes have experienced a robust 14.5% increase. Pending sales are also on the rise, with a remarkable 38.9% increase for Single Family homes and a solid 20.6% increase for Townhouse/Condo homes. Despite a reduction in inventory, down by 36.0% for Single Family homes and 30.5% for Townhouse/Condo homes, the most noticeable outcome is the surge in sales prices.The median sales price in Washtenaw County has seen a remarkable uptick, rising by 11.8% for Single Family homes to reach $390,000 and 12.1% for Townhouse/Condo homes, now at $299,950. Days on the market have also decreased significantly, by 18.5% for Single Family homes and an impressive 30.4% for Townhouse/Condo homes. This points to a quicker turnover in the market and heightened demand.

Nationally, the low inventory scenario is keeping the real estate market on its toes. Total housing inventory entering October witnessed a 2.7% increase from the previous month but remained down by 8.1% compared to the same time last year. This translates into a 3.4 months' supply at the current sales pace, according to NAR. The scarcity of homes for sale is posing a challenge for buyers, but at the same time, it's a boon for sellers. The result? Higher sales prices nationwide, with the median existing-home sales price increasing by 2.8% annually to reach $394,300, marking the third consecutive month of year-over-year price hikes.

While the real estate market is undergoing some changes, it's essential to remember that low inventory is not necessarily a gloomy scenario. For sellers, it's an opportunity to reap the benefits of higher sales prices, and for buyers, it's a chance to be a part of an ever-evolving market. As we navigate these shifting dynamics, the future of the U.S. housing market looks bright, with optimism in the air and the promise of increased property values for those looking to sell.

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DMA Real Estate is a team of experienced, licensed real estate agents serving the Washtenaw County, MI metro area. With a proven track record of getting results quickly and a direct line of communication at all times.