COVID-19 Tanks Real Estate Market
CBS Detroit - The uncertainty of COVID-19 and Governor Whitmer's Executive Orders shutting down the state have hit the Metro Detroit real estate market hard. However not in ways one would expect. In an article by Crain's Detroit Business, condominium and home sales dropped sharply in a 15 year low. The part no one could predict is the prices overall are up.
According to Farmington Hills company, Realcomp Ltd., year-over-year sales from April 2019 saw a 46% drop in sales across 15 counties in our region. They report that Livingston, Macomb, Oakland, and Wayne counties saw decreases in sales as much as 47.8%.
Prices, on the other hand, are up and are surprising some experts in the field. Median sale prices year-over-year rose 11.7% or $171,000 to $191,000. Metro Detroit saw a higher rise of 15.6% or $180,00 to $208,000. The reason they think for this is low inventory. As COVID-19 set in across Michigan with massive uncertainty everywhere, the housing market ground to a dead stop. Within that period people took their homes off the market. A reported 18.2% fewer properties from last year. Metro Detroit having 19.5% fewer properties on the market.
If this were any other time in history, now would be the start of the home-buying season. However, the virus has taken its toll on home and condo sales. Falling last month 53% (7,519 to 4,060) in the MLS and 52% (4,742 to 2,475) in Metro Detroit according to Real Comp. Year to year Crain's Detroit reports 13.3% drop and 14.9% in Metro Detroit.
Frank Tarala, Realcomp chair and principal broker for Sterling Heights Sire Real Estate told Crain's Detroit Business, "These numbers in April reflect a month that we were shut down," he said. "But there was still some activity that was taking place for people who had maybe seen properties before the shutdown and did go through and make offers."
Historically, Realcomp reports a decline like this hasn't happened since 2003 and the largest drop in sales was a decade ago in October of 2010 with a drop of 24.7%.
April 2019 to April 2020 Home Sales Break Down
Sales in the City of Detroit dropped 56.2% from 390 to 171. Housing prices increased from $45,000 to $65,000, a 44% increase.
Wayne County, including Detroit, experienced a 50% drop in sales. From 1,741 to just 868. Prices are up 26%, going from $127,000 to $160,000. Inventory is down 16%.
Oakland County prices stayed pretty much the same. Only experiencing a 2.4% increase. However, Oakland County, like the rest of the market, saw a steep drop in sales of 44.8%. Going from 1,554 to 858.
Macomb County experienced a drop similar to Wayne County. Being down 50.1% in sales, moving from 1,194 to 596. Prices rose 14.5% and available homes for sale dropped 25.4%.
Livingston County had a 39.5% drop in home sales. With only 153 properties sold in April. Prices have hardly risen. The number report only a 1.1% increase in median sales year-to-year. With an average home being $280,000, about only $3,000 more since last April.
Washtenaw County reports sales are down 38%. Going from 421 homes sold to just 261 in April. Home prices did go up modestly, with a 26% increase. With the average home now being $160,000. Available homes for sale are down 16.1% from last year.
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