The Grosse Pointe Housing Market has been as hot as the weather lately. This is traditionally one of the busier times of the year in real estate, and this year is no exception. Low prices combined with historically low interest rates have created a perfect buying storm, and people in the Grosse Pointe area are taking advantage of it.
Grosse Pointe housing inventory has continued to slightly decline. This is good for almost everyone. Basic economics would indicate that less inventory combined with high demand would equal rising prices. While that is true, prices have only risen slightly and the reason for this is simple.
Appraisals. Basically when a buyer wants to purchase an item, that buyer agrees to spend their money on whatever they are buying at a price the buyer and seller agree upon. The same goes with real estate, only the buyer often isn't using his or her own money. So in the middle of everything is an independent appraisal. The mortgage world came under heavy scrutiny several years back as basically anyone with a pulse and a signature could get any mortgage he or she desired. Since then government regulations have changed the way a mortgage is done, and especially how an appraisal is assigned (meaning who does it) and how it is to completed.
To make a long story short, even though a buyer and seller agree on a price (thus the true market price of the home) an appraiser has the final say. In some worst case scenarios, appraisers can come from as far away as Port Huron or Flint and maybe do not have access to our local MLS (There are two major MLS systems in our area, and for an appraiser to do a thorough job, they need access to both). So in the end the market does not set the price, the appraiser does, which can be frustrating.
Even with that in mind, our local market is still hot. Currently there are 210 single family homes available on the market in the five Grosse Pointes. This does not include any homes under contract, or awaiting short sale approval. There are 140 homes under contract right now, and another 38 awaiting short sale approval for a total of 178 homes or 46% of our market. That is a huge percentage which indicates a robust real estate market. 259 homes have sold thus far this year compared with 208 sales during this time period last year.
Though prices are not shooting up through the roof, this market recovery is good for anyone who owns a home. Like I tell all my friends, we have hit "a bottom." The real question is have we hit "the bottom?" I am confident we have, but no one really knows the answer to this. Time will tell. Either way, its a great time to buy real estate. In the meantime, if you have questions about your specific situation, contact your local Grosse Pointe Board of Realtors Member. Real estate is hyper local, and local agents understand our market better than anyone.