One of your biggest, if not the biggest investment in life will be your home. So it is only natural that discussion of homes and the housing market in general comes up often. Whether it was twelve years ago when the market was beyond hot, or three years ago when it was ice cold, people always want to talk about their homes, and what they are worth.
The biggest question that has been coming up lately is “Do you think we are/were at the bottom?” The answer to this is pretty simple. We have hit “a” bottom. That much we know. In reality, what people want to know is if this is “the” bottom? That one is tough to answer. The only people that know the concrete answer to this are those with a crystal ball.
All indications do look good though. The inventory in Grosse Pointe has stabilized, and so have prices. Currently there are approximately 267 houses on the market in the five Grosse Pointes. There are approximately 129 houses currently pending (under contract), which amounts to 32 percent of the market. Several years ago when inventory blossomed, and prices began to rapidly fall, we had more than 800 homes on the market. Less than 10 percent of inventory was pending.
According to the National Association of REALTORS® Confidence Index which analyzes the national real estate market,indications point to a continued market recovery. Confidence and price expectations are up nationally. It is important to note that although the housing market is not expanding exponentially, we are making a slow and steady recovery.
It is always good to glance at national statistics, but as everyone knows, real estate is local. In the Grosse Pointe area with continued stabilization, prices will continue to bounce back. It will be a slow process, but one that will pay off for property owners down the road. Even though the past few years have been a bump in the road (some might even call it a mountain) historically home ownership has been a very prudent investment.
The buyers who stand to do the best in our current market are those looking to upgrade. If you are looking to move into a larger home, you will do well. For example (all of the following numbers are made up just for comparisons sake) you sell your 1500 square-foot, 3 bedroom colonial in Grosse Pointe Farms for $150,000. It is a painful deal because you paid $165,000 for that home several years ago. You end up with a net loss of $25,000 (between upgrades, taxes etc.).
Here is the kicker though. On the flip side you can purchase your dream home for $450,000 which several years ago would have been $675,000+. Combine that with historically low 3-4% interest rates, and you have done quite well.
Every situation is unique, just like every neighborhood in Grosse Pointe is unique. If you have questions about your situation,whether you are upside down in your mortgage, or just curious to see if moving now makes sense, call a member of The Grosse Pointe Board of Realtors®. Only local Realtors® truly understand this market. If you have questions you would like addressed in this column in the future, please feel free to email me at email@example.com.