There are various stages in life where the mindset of temporary housing or a rental makes sense. However, Detroit home sellers should know that while it would have previously been the norm, these people are now more focused on finding permanent housing situations and increasing the number of buyers competing for houses in the local real estate market. Part of this drive may be due to a lot of company’s business models rolling over into working from home. Another phenomenon that has come to light, more wealthy investors are updating their investment plans to move with the market, making their second home purchases for retirement earlier than previously planned, increasing the shortage of available properties on the market. In this article, we’ll go over what home sellers in Detroit should know about the current market in detail.
Riding the Wave
Like a wave still rolling from the 2008 national trend of slowing new housing production, the backlog of completed units has yet to be met, let alone the surge in demand that has emerged since the pandemic. Low-interest rates are also pushing buyers into the market that may not have otherwise been able to afford as much housing. There is also a migration of buyers from high-tax states brought on by changes in federal tax guidelines, which means they can no longer write off their property taxes.
The National Association of Realtors reported in October of 2020 that there were fewer homes for sale now than ever. If no other homes were listed on the market starting now, there is just over a two-month supply of inventory available. There has also been a stall in the number of homes listed by sellers that would typically be making an upward move in housing, such as moving up from a starter home. Many homeowners choose to stay in place to see how they are involved and settle out before risking what they have in place. These factors have combined to create an epic seller’s market, with the surge in demand and shortage of housing units available, causing prices to soar. Read on to discover what Detroit home sellers should know about the real estate market in Detroit.
The Trouble With Bidding Wars
While a seller’s market may sound like a perfect scenario, Detroit home sellers should know that bidding wars affect the real estate market in Detroit. The problem comes when buyers bid above the amount the home will appraise while remaining below the typical 80 percent of the loan to value the mortgage. There is a potential to lose your buyers, should they find themselves in a bidding war. They may not have the finances to afford the higher monthly payments and a higher principle, let alone the extra cost of mortgage insurance. They also may not have enough cash on hand to cover any shortage between the appraisal and the final purchase price.
What Goes Up Must Come Down
All good things come to an end. Housing prices had already begun to trend upward before the pandemic and continue to rise. Under the current conditions, most first-time homebuyers facing the rapid jump in listing prices cannot afford the average home. Detroit home sellers should be acutely aware that the current rising price trend on the real estate market in Detroit cannot continue forever and the real estate market may crash. Indicators are that foreclosures, which are on hold now, will rise among lower-income households. Around 2.75 million mortgages are in forbearance under the CARES act’s protection at this time, with approximately 10 percent of all FHA-backed mortgages more than three months behind on payments.
Avoiding the Risks of Selling
Avoiding selling for too long may mean that home sellers miss out on this rare opportunity to strike while the market is at or near its peak. When it comes to traditional listings, a significant number of people simply do not want to take the risks of meeting with strangers to negotiate or do business. Many would prefer not to have showings during the pandemic because of potentially ill buyers walking through their homes. With stress already at an all-time high for many, the mere thought of the additional pressures of selling a home, especially when school and work are home-based, is too much to consider. Detroit home sellers should know that there is another way to sell their home on the real estate market in Detroit, by selling to a direct buyer like Detroit Fair Offer.
Ready to learn more about what Detroit home sellers should know about the real estate market in Detroit? At Detroit Fair Offer, we are here to listen and help you handle all of your problems. With fair prices, straightforward easy to understand contracts, and quick closings. Working with Detroit Fair Offer means there’s no need to delay selling any longer! Detroit Fair Offer will walk you step by step through the process and help you determine what is best for you!
Send us a message to learn more about the advantages for home sellers working directly with a professional homebuyer or call Detroit Fair Offer at (313)647-8806 today!