HOW'S THE MARKET???

It’s a question posed daily to nearly every real estate agent, especially in the last few months with headlines rich in real estate “news”.

The answers are many and varied: It’s awful! It’s not that bad. It’s OK. It’s great! It’s been lots worse! All can be true—all at the same time. It depends and what part of the market you’re asking about . . . and whether you’re a buyer or a seller!

The fact is that—while there are forces nationally that influence all parts of the real estate market: the “sub-prime” market troubles . . . foreclosure increases . . . mortgage banking failures . . . Federal Reserve discount rates—how real estate is doing where you are depends on specifically where you are and what you are doing. Your community. Your neighborhood. Your school system. Your price range.

In the Greater Kalamazoo market, generally, if you are a buyer, it’s a pretty darned good market—there are lots of choices, financing is available and affordable and bargains are there to be had. If you are a seller, the competition is fierce—there are more homes on the market now than at any time in the last 25 years.

Still, there are exceptions and a wide range of variability. For instance, in Portage in the $100,000 - $125,000 price range, the current inventory of homes for sale is only at a 6.7 month supply—meaning that if the current rate of sales continued and no more homes entered the market, how long it would take to run out of homes? To put this in perspective . . . a balanced market carries about a 6 month supply of homes . . . in 1993 we carried a 4 month supply (very much a seller’s market) . . . and in 1981-1982 (with interest rates in the 14-17% range) the inventory hovered around 15 months!

Here’s snapshot of the current inventory levels in a smattering of other market segments in our area: Vicksburg area: $100,000 – $150,000 (7 months), $200,000 - $300,000 (12 months); Richland & Ross Townships $200,000 -300,000 (21 months); Plainwell area $175,000 - $225,000 (16 months); Gull Lake homes over $500,000 (25 months).

The bottom line: Each geographical and price segment of the market is its own mini-market. The experts and the media can say what they will about the national real estate picture—and it is always interesting—but what matters is what’s happening in the micro-market surrounding the home you own or the area you want to buy in.

All The Best,
Jared


P.S.
(I use the quotes around news because my perception has long been that what shows up in newspaper or TV or magazine or internet headlines as “news” is not really new—it’s been going on for quite some time. All media outlets, rightly or wrongly, think that they cannot get your attention and sell you something without sensationalizing the everyday.)