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Through the first half of the year, sales are up a little over 3%. Average sales prices are up a little over 6%. The interesting thing is that inventory is down 19%. The fact that sales and prices are up by small margins is a large indicator that this crazy seller’s market that we’ve been in the last couple of years is probably coming to an end.

Looking at the Michigan housing affordability index, our index currently sits at 180. To provide some context, an index of 100 means that the median family can afford the median home. An index of 80 means that the median family can’t afford to purchase this same home.

Historically, Michigan’s number has stayed level at around 135. At the peak of our recession, our number reached 210. As we trickle down toward the 130 to 140 mark, what it’s going to take to get level again is interest rates in the low-to-mid 5% range and housing values to potentially increase another 10% or so. 

"This gravy train sellers have been on is 
likely coming to an end."

Another interesting point is that 89% of homes in Michigan have positive equity, and 72% have 20% equity or more.

We may have one more spring like we’ve had with competing offers and low inventory, but by and large I think this gravy train sellers have been on for the past three or four years is ending soon.

If you’re thinking about selling and aren’t sure whether it’s a good idea to pull the trigger now or to wait until next spring, give us a call and we’d be glad to help walk you through it. Until next time, make it a great day.