Washtenaw County, like much of the nation, has a continued inventory shortage. This shortage is heavily concentrated in the starter market.
Comparing the same period last year to this, the number of sales and listings have dropped across the board. At this time last year, 3,609 single family houses had changed hands through the MLS in a one-year period. Today the same parameters show 2,586 sales, or a decrease of over 28% in volume. Last year at this time, throughout the County, there were 483 available listings, but today there are only 288.
The inventory shortage continues to be concentrated in the starter market. New construction is simply not meeting the needs of the more modest market, while there is an abundance of properties available over $500,000. As of this morning, if a buyer can only afford $200,000 in the Ann Arbor school district, there is one available listing (single family houses, not condominium units). Increasing the price to $300,000 reveals only nine additional offerings. Across the board for all of the school districts in Washtenaw County, there are still only 77 available listings not shown to be under contract, compared to 1,172 sales in the previous year listed up to $300,000. This means there is less than one month’s inventory across the entire Washtenaw County board. That is a shortage.
For comparison, sales within the same market area listed from $500,000 to $600,000 that sold in the past 12-months totaled 178 sales. As of this morning, there are 27 active listings available, or 1.82 months’ supply compared to 0.79 months for $300,000 and under. There are nine contracted listings in the price range, or 25% absorption, and $300,000 and below there are 93 compared to 77 available, or 54.71% of those properties under contract.
Although we expect there to be a lot of price pressure in the starter market due to lack of inventory, prices may not necessarily increase/decrease in the manner expected. For example, taking sales in Saline (excluding new construction) and segmenting built from 2000 forward but arranging in three size ranges, all houses on less than an acre, it is easy to track trends over a year. This starts with 1,400-2,000 sqft, then uses 2,001 to 2,500 sqft, and finally from 2,501 to 3,500 sqft. It could be expanded, but it is to show how the market is segmented in direction of where the sales fall.
This segmentation based on size is a good visual on how the market in general is behaving. Basically, it shows the starter market trending upward on a linear trendline, stable for the mid-sized houses, and declining for the larger houses. Using a third order polynomial trend shows a dip recently for all of these segments, however it may be due to the time of year more than changes in the market, therefore only the linear is represented above.