Saline MI – Wildwood

Every town seems to have a neighborhood which has broad appeal. In Saline, Wildwood is one such neighborhood. Here occupants find wooded lots, walkout basements and proximity to many area amenities. What I thought my readers would find interesting is how this specific market has changed over time, measured over the past 12 plus years as well as what I see happening now. The sales information is gleaned from the Ann Arbor Area Board of Realtors MLS and does not include For Sale by Owner properties.

This first image is a scatter graph of the adjusted sales price of each sale from 2006 to 2/28/19. Prices are clearly trending upward.
The next graph shows the adjusted price per square foot in the same period. Price per square foot is meaningful, in that in a data set that contains different size properties, it can normalize some of the increase that might show if the recent sales are larger properties.

This graph also clearly shows an upward trend in price in Wildwood.
Another way we could look at this is with a chart laid out in how many sales per year occurred, what the average and median sales prices were, the average and median sizes, and average and median price per square foot. This type of information could be useful in showing where the majority of change occurred. So far 2019 has only two closed sales, but these were on average, smaller houses.

The graph that follows uses the average and median sales prices compared to each other from the data above. The blue bar is the median, which is my preference in measuring a market. This layout is helpful in seeing there was a slight dip in the market between 2008 and 2011, with the greatest increase in 2016.

Continuing in the same vein, price per square also shows an increase, but with 2018 running slightly below 2017 in general. If an appraiser indicated the market was slowing, based on this data, they would be correct, to an extent. The past three years showed similar gross living area both in the average and median sizes, with 2017 having slightly smaller sales than 2016 and 2018, meaning the expectation is that the price per square foot range would be higher. That is precisely what shows below, while the graph above shows an increase.

What is the saying? There are three kinds of lies: lies, damned lies, and statistics.

As of 3/1/19, the MLS showed no active available listings in Wildwood. There were three properties under contract. The lack of available properties in a subdivision that has steady turnover, indicates higher demand than supply, which in turn tends to drive prices upward.

All of this information is to help the consumer understand the various elements of the market an appraiser may study to measure what is happening with the market at any given time. Since appraisals are snapshots in time, understanding the market is a major component of the analysis.

You can access my website for information about appraisals, and what services I can provide. Please think of me for your private appraisal needs. https://annarborappraisals.com

Monthly market snapshot

Mixing up the way I do the monthly report a bit. In addition to the normal information about the absorption rates and where activity is as of a certain date, I have also included a two-year summary of price changes in each area. Hope that you all find this interesting, and as always, if you have questions, reach out to me, either via phone or email.

Without further ado, the monthly inventory in each market is showing from as low as 1.13 months, to as high as 3.56 months depending on the area. The area with the most inventory however, is actually showing as such due to the abundance of new construction exposed as “to be built”. This means the properties are not immediately available. Since I have run this data in the same manner consistently, I am carrying on with including all market exposed properties through the MLS, but Saline is not as saturated as it appears at first blush.

The market overall is undersupplied, with most areas around two months or less. Since this data includes every listing and sale within each school district, for submarket data, it does not apply. It is useful in measuring where activity is, but as always, you have to look at the market segment in which a property operates.

Based on the contract to listing ratios (CTLR on grid), the greatest activity is in Lincoln school district, followed by Ypsilanti and then Ann Arbor. The areas that are showing as leaning towards a buyers’ market are Manchester and Dexter. Saline is tilting towards a balanced market. Chelsea, Whitmore Lake, Lincoln, Milan, Ypsilanti and Ann Arbor are in seller’s market territory again.

It looks like spring may have sprung.

What about changes in price over time? Again, this is larger market data, not specific to any particular submarket section. These are arrayed by school district, and each data point is one-years’ worth of data at a time, moving forward in a monthly manner. This eliminates seasonality and is useful in seeing more nuanced changes. Looking at this information, it is easy to see that Dexter increased, but there is a decline over the past couple of months. Stability in pricing is seen in Chelsea, Saline, Ann Arbor and Ypsilanti based on the trend lines over the last four or so months. Prices have increased across the board in the past two years but also have slowed or even declined in places. Still, in comparison with two years ago, we are increased on the macro market segments.

If I take this information and put it on an easy to read grid and it is easy to see that over a two-year period, most of the markets are in the double-digits in increases, however the past year was not so kind to Manchester, Dexter, Saline and to an extent, Ann Arbor. The increases in these areas were smaller, and in some cases, negative. The largest increases in the past year were found in Milan, Ypsilanti and Whitmore Lake. This makes sense when observing the median prices, which are lower in those areas, with the outlier being Manchester. My take on this is that as some markets have become expensive for the average buyer, they have moved into different, lower priced markets, which are putting pressure on increases in those areas.

I am continuing to observe our market on every appraisal I develop and communicate. Markets can change quite rapidly, and each market will have a number of submarkets within it. All of this information is presented in a broad manner for ease of reading. All information is culled from the Ann Arbor Area Board of Realtors MLS and is assumed accurate.

Is the sky falling?

Is the sky falling?

 

As an official geek, I really like looking at what is going on in the market by numbers. One simple way to look at this is through a one-year data run that moves forward one month at a time. This is an annualized monthly trend, and it helps to eliminate the seasonality that is seen through analyzing data presented one month at a time. That method is also valid, in particular in measuring when the market is most active.

 

Take a look at the information that follows. The columns refer to the date range, number of sales, median list and sales price, median size, and price per square foot. This is useful in showing how much a market has changed and is one way an appraiser may base a market conditions adjustment they make, or don’t make, on an appraisal report.

 

 

This chart is the Saline market, Ann Arbor Area Board of Realtors MLS data with all sales exposed through this source only. The to be built and new construction properties are excluded. I excluded these new houses, as the trends did seem to be a bit skewed due to the number of new houses that are being placed in the MLS at this time, many of them not immediately available for occupancy.

 

January 1, 2016 through January 1, 2017 there were 310 sales with median sales price of $335,000 and median price per square foot of $152.13. One year later the median sales price was $358,875 and price per square foot median was $162.46.  This means that in this one-year period, the market increased 7.13% in price, and 6.79% in price per square foot. The change from 2016 to 2017 in this market could be easily measured through this method, and correlated anywhere between that 6.79% and 7.13% range. Of course, markets do not move on a straight-line basis, therefore depending on where a sale fell in that period, the appraiser could use that information for an adjustment.

 

Between January 1, 2018 to January 1, 2019 the market showed a median sales price of $360,000 and median price per square foot of $168.86.  Based on the previous years data, this means the median sales price increased 0.31% and the median price per square foot increased 3.94%. Neither of these shows much of an increase, in particular as the median size of the most recent period is 3.49% lower than the previous year. Because smaller houses tend to sell at a higher price per square foot due to the cost of land and development, and diminishing returns, this means there could be little to no movement in price. If the 2018 inflation rate is 1.9% (based on the US inflation calculator), did properties even increase at a rate equal to inflation? What about the current sales price median lower than the last eleven months?  Even the past three months before showed a lower median price. Are we seeing a correction?

 

Considering there are 18 properties under contract with a median asking price of $364,950, it is in line with the last four months asking prices, but the median size has jumped by 11.30%!  To me this indicates the market is not going up in general, and could be pointing downward. Hard to tell until the contracted properties sell, but it is worth watching.

 

 

 

Saline MI market trends

While the market appears to be moving at breakneck speed in parts of the country, even in some of the most popular markets, it is not exactly so. Changes occur constantly, with submarkets having different appeal at different times.

 

The data below is that of my community, Saline MI, just south of Ann Arbor. Although the data presented does not break out submarkets within Saline, what it does is break out by price range. I could have expanded the price range above the $501,000 mark, but chose to keep it at this level for simplicities sake. The way the data reads is as follows:

 

The chart shows the number of total active listings, then those under contract, one years’ worth of sales, and supply compared to the past year. Finally, it shows the Contract-to-listing ratio (CTLR) of percent of properties on the market that are under contract. This is relevant as it gives an overall pulse of what is happening in the market, with 20% or less being a buyers’ market based on my experience, and over 35% a seller’s market.  I have run these in price ranges as shown below, and have been tracking occasionally to see any changes.  This particular grouping is interesting because what we are seeing is the early spring market, the height of the market, the early fall market, and now the late fall market.  I will keep running these types of studies throughout the year to see if we have changes that start to happen, but what I am seeing from this is the expected slow-down as we head into winter.

 

Comparing March to June, the rate of absorption overall has increased and inventory in general has increased. The price range between $201,000 and $300,000 showed a slight slow down in absorption, while anything over $301,000 showed an increase in activity.

 

 

Compare early fall to late fall and the market again is changing, with the CTLR dropping and showing more balance. The greatest absorption has generally been in the $401,000-$500,000 range based on this information, with the exception of the current activity in the under $200,000 range. In both of these cases, over $501,000 is much lighter absorption in general.

 

We have gone from 34.58% CTLR in March, to 41.29% in June, then 29.35% in September and 28.88% as of today.  That is for the entire Saline market, with different price ranges showing different absorption rates depending on when the data was run.

 

What does this all mean? Long and short is that it shows how the markets change as far as activity based on the time of year, as well as in what particular price ranges the market is hottest at each one of these periods. It shows that although the market may be “hot” in one segment, another may be quite cool. Of course, this is by price range as opposed to an actual submarket, but the logic behind it remains the same.

 

Hope everyone finds this interesting.  If you have any questions about appraisals in the Washtenaw County market and beyond, please let me know. Feel free to visit my website at https://annarborappraisals.com for the types of services provided and the coverage area.

 

 

Data culled from the Ann Arbor Area Board of Realtors MLS

Changes over time

One of the reasons an appraisal value is a point date, is that markets are fluid. What happens today, may not happen in the future, and likely did not happen in the past.

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The image below is a chart of four different price segments, as well as the overall market for Saline Michigan. It is run by price ranges (not the way we appraisers do our analysis, but relevant in measuring where the activity lies). This data is over a six-month period, with three data runs in March, June and September. What shows is an increasing inventory overall, and currently lower concentration of listings that are under contract. The June market data showed the highest absorption of the listings into the market, but we expect that since the summer months are most active.  The lowest absorption is shown at present, which is also expected as the market softens most often after the height of the summer.

 

Saline has consistently had a lack of inventory for less than $200,000, but as of 9.21.18, there were three offerings of single-family properties (not including condominiums) for less than that. The number of active listings has increased across the board, but the most active markets continue to be between $201,000 – $400,000 based on this information. It does show a sharp drop off over $300,000 in the most recent data run. Meanwhile supply builds in the $401,000-$500,000 range. This is likely due to numerous “to be built” properties being input into the MLS in this price range.  Throughout this data set, the market over $500,000 has shown balance to an oversupply based on the number of available properties for sale.

 

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The reason for a point date, is that markets change. The evidence is easily seen here, with the supply and demand factors changing between each data run. The current information shows the market is slowing in terms of absorption, and the amount of inventory overall. The caveat of course, is that each of these price segments is different, and some are staying level as far as inventory and absorption (mainly the $201,000-$300,000 range), while others are changing rapidly.  If an appraiser were to value a house at $350,000 in March, there would be very little competition based on this information. If it were in June, the competition would also be limited, but if it came on the market today, there would potentially be 20 other properties competing. This does change the dynamics of the appraisal analysis, even if it only relates to how long it is expected to remain on the market.

 

When markets are sizzling hot, there are few listings operating as competition for a property. When markets cool, listings become ever more important as part of the analysis. Understanding what is happening as far as supply and demand in the market is critical, and should be part of any appraisal. Knowing where the subject property stands in terms of the competition is part of the analysis.

 

Please feel free to contract me for any of your appraisal needs in local market. My website address is https://annarborappraisals.com and you can contact me here by email.

 

Changing markets

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By Rachel Massey, SRA, AI-RRS

It is easy to miss the market. Sometimes subtle changes are occurring and it is too early to pick up on a trend. Or there is conflicting information indicating both an increasing and a declining market at the same time, depending on the market segment.

If appraisers had crystal balls into the future, we would be doing something other than appraising. The money would be in predictions, not in measuring the current market. We are expected to be in touch with the market however, but basing our opinions on past, closed transactions is not necessarily the current market. This is one reason analyzing current offerings, pending sales, expired and withdrawn listings, and listening to the chatter of those involved in real estate sales is important.

Between 2007 and 2010 much of the nation experienced significant declines in real property values. Some appraisals that were developed and communicated in that period indicated the market was stable, even with evidence to the contrary. Appraisers were reluctant to mark the declining trends box on the form reports, due to very real concerns of losing lender business by doing so. The 1004MC form, that became mandatory after April 1, 2009, came to being in large part as a way to help ensure that appraisers analyzed the market. Like it or not, this provided structure and direction to lead the appraiser to look at what was happening in the market, at the time of the appraisal. Although many appraisers state this form is woefully inadequate, few supplement it with additional information supporting their market trends decision. This is the thesis of this short article; to be aware of  other elements to observe in addition to the MC document, as well as what to watch for as the market starts to change. Because change is inevitable.

Ten years after the market decline, large parts of the country are experiencing significant increases in real property values. Some markets have surpassed the previous highs, and many appraisers are concerned about a repeat cycle reminiscent of the 2007-2010 market. How do we as appraisers, protect ourselves against being accused of incorrectly measuring what market conditions are? How can we analyze what factors are driving the market, and what should we be aware of as possible bellwether indicators of a changing market?

Although not exhaustive, below is a list of some of what is driving an increasing market in many of our individual areas.

  • Low inventory
  • Low rates
  • Few builder specs
  • Builder entry prices (due to labor shortages and increasing costs)
  • Owners converting housing to rentals
  • Taxes making moves difficult (resetting to higher assessments)
  • Need to sell to buy and lack of opportunity to do so – making downsizing difficult
  • Owners holding on to their residence due to no desire to change circumstances
  • Fear of rising rates causing panic buying
  • Optimism that prices will continue to increase

Being aware of what is driving the market is a good first step to being aware of what could ultimately change the market. Each of the points above can cumulatively or individually result in a change to market conditions.  In addition, the following factors should be watched.

  • Incomes not keeping pace with price increases
  • Increased inventory
  • Rising rates
  • First time buyers priced out of market deciding to opt out
  • Property taxes exceeding allowable write-off

Ways to check what is happening

  • Contract to listing ratios
  • Expired and withdrawn listings
  • Days on market
  • Price reductions or increases
  • Listing prices lower than comparable sale prices
  • Widening gap between list and sales prices
  • Comments in listings “bring offers” “priced below recent appraisal”
  • Agent interviews – agent chatter
  • Falling rental prices
  • Incomes not keeping pace with price increases
  • Increasing relocation assignments

Contract-to-listing ratios are a concept that agents use, but most appraisers do not seem attuned to. It is simply taking a pool of competitive properties into consideration, and looking at the percentage of the listings on the market at that time that are under contract. If the determination is that the competitive market for the subject property is a 1,000 – 1,500 sqft ranch house built between 1940 and 1960 in such and such an area, the appraiser may find there are 100 listings on the market, but of those 100 listings, 40 are under contract. That is a 40% contract to listing ratio, and indicates the market is strong and houses are absorbing into the market. If on the other hand, there are 100 listings but only ten are under contract, that is a 10% contract to listing ratio and is weak, showing the market is not strong. This can be used to measure whether the market is favoring buyers, sellers, or is generally balanced. Through keeping track of this type of information in various market segments over time, it can be used to predict near-term changes in the market. For example, price pressure may show all the listings 20% higher than the sales, but if very few are under contract, it is unlikely there is going to be a jump in prices, but if most are under contract in spite of the spike in prices, it is likely they will close higher and it affords a chance to be left behind. Take for example, this sample that I ran (by price, not by market segment for the simplicity of this article) for my market on 2/16/18 and run again on 3/18/18 for comparison, to see what areas in the market were experiencing the greatest pressures:

Overall the market shows extremely tight, with less than 2.75 months’ worth of inventory as a whole in the entire school district, and by price, in the same realm through to the $500,000 price range. Over that, there is more inventory and a much lower contract to listing ratio, at 24.53% compared to 32% for just a bit lower priced, between $401,000 and $500,000, and even greater at 57.14% in the $301,000 – $400,000 range.  How does this type of information help inform the reader of the current market? It simply shows what inventory is like as well as how active the market is. It doesn’t show price increases if they are occurring, but it is pretty unlikely that a market with 50% of the houses on the market under contract is going to be either stable or declining. If your opinion of value on the property was $190,000, there would be no active competition as of this date and it would be a good bet that the house would be in high demand. Conversely, if your opinion of value was $650,000, there would be much more competition and the expectation would be a longer marketing period. In addition to how the subject of the appraisal might be positioned, keeping track of ratios over time can be useful in noticing a trend before it becomes well known in the market, realizing that figures could vary in a day. In the example above however, the trends appeared similar, showing the highest levels of activity in this market in the $201,000 – $400,000 range, with no inventory under $200,000.

When markets are tight and increasing, it is just as important to discuss the market and any changes that are evident, as it is when the market is declining. Ignoring an increasing market is just as incorrect as ignoring a declining market. Stating that one only adjusts downward for declining markets, but not upward for increasing markets is an incorrect procedure. Document the changes and include what you can in the report.

Document, document, document, as silly as it may seem, using Trulia, Realtor.com and other online tools can help you with keeping a record of trending information on top of what you present in your report. Realtors Property Resource has a tool which provides trending analysis for the property under consideration, the zip code and the county. Realist also provides for price trends, as do Trulia, Realtor.com, Movoto and other sources. Although these data sources provide broader market data, simply having the information you pulled related to trends in the market, in your workfile, is helpful in the event someone comes back years later saying you should have marked declining on the report when all indications were that the market was stable to increasing at the time you completed the assignment.

Markets can change overnight. For those of us appraising in 2001, we can remember how the world stood still on 9/11, and how it took a month or two for the country to breathe again and get back to doing business. Significant market changes can happen quickly, and we have to be able to be aware of what is going on in our market, even with these events. Agents who are active in the market will be in a perfect position to talk with us about what they are seeing as well. It is a good idea to build trusting relationships with agents, who will share their concerns as well, even if it is “off record”. These relationships do matter.

If the market in your area begins to decline, do not be afraid to report what you see – even if the short-term repercussion is decreased work from such and such lender. The long-term benefit of being truthful is more important. Appraisers must work with integrity and not be afraid of losing business for doing the right thing.

 

This post has been copied in its entirety (well, without ads) from the original source of publication, WorkingRE, with their permission. Original link below. Please visit their site often as well 🙂

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Market snapshot – Ann Arbor/Saline

Market snapshot – comparing Ann Arbor and Saline

Prologue

I admit it; I am a data junkie. There is something about graphs and charts that I just get all-geeked out about. Maybe it is simply having too much time on my hands, or maybe it is a thirst for knowledge (hoping for the latter, but with understanding it may be the former).

Without further ado, I offer my recent take on the comparison of two markets, because they often compete with each other.

The data below is run as one years’ worth of data at a time, but compared month over month (so if you see a comparison from June 2012 to June 2013 each of those sets has an entire years’ worth of data leading up to the date.  In this first graph, I have compared the cumulative days on the market of sales in Ann Arbor school district, as exposed through the Ann Arbor Area Board of Realtors MLS, compared to the same in Saline. I took all sales and looked at the median. In both segments, days on market declined to a low point in May/June 2013, and have since risen and then stabilized. Saline had longer median days on market but shows as stable compared to Ann Arbor, which is slightly increased over the past couple of months.

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What about price?  On the median price, Saline is ahead of Ann Arbor. On median price per square foot, Ann Arbor is ahead of Saline. Why is this? It is related to median size. The median size of a house in the Saline market is greater than the median size of a house in the Ann Arbor market. As price per square foot is normally higher as size declines, it makes sense that you would see that.

If you compare month to month, for the past five months, the closed sales in the Ann Arbor market show as flat (although that is changing now) whereas Saline has been rising. If you skip down to the price per square foot, the rising prices in Saline are at a slower rate than just by the median price.

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Inventory levels as of 4/8/14: Ann Arbor had 152 active offerings in total, compared to 1,176 sales the year before, or 1.55-months’ worth of inventory (not much). Saline had 50 offerings compared to 297 sales in the year prior, or 2.02 months’ worth of supply. In both instances, supply was quite limited, and this limited supply does appear to be driving many multiple offer situations.  In both markets, the contract-to-listing ratio shows as favoring seller’s, with Ann Arbor at 40.16% and Saline at 41.18% as of the 4/8/14 run date.

When the contract-to-listing ratio and low inventory favor sellers, prices typically increase. When they favor buyers, prices typically decrease. Markets are very fluid and changeable, and what is apparent a week ago, may well change dramatically a month from now. The market is sensitive to interest rates, employment rates, income changes, and national news, among other issues.

Epilogue       

Appraisals are “opinions” of value by educated professionals. They are opinions based on factual data, but in the end of the opinion of a professional. Not all appraisers have equal qualifications and experience, and therefore not all opinions are equal. If you are shopping for an appraiser to help provide you an independent opinion of value, base your selection on the breadth and depth of that appraiser’s knowledge and experience, not the price of the appraisal assignment. After all, it is typically your largest investment, and does it make sense to be penny-wise and pound-foolish?

Rachel Massey, www.annarborappraisal.com

January 25, 2014 Washtenaw County market snapshot

January 25, 2014 Washtenaw County snapshot

 

On January 11, 2014 I posted a snapshot of the Washtenaw County market showing the number of arm’s length sales in each school district as well as the change in price per square foot over time and the current number of offerings and houses under contract.  

After some consideration, I have eliminated all “to-be-built” houses as they are starting to flood into the market locally. These houses are not truly on the market as they are not yet started and are not available for immediate, or even generally quick, occupancy.

The data below is a snapshot of the supply and demand factors for the various Washtenaw County markets as of 1/25/14 through the Ann Arbor Area Board of Realtors MLS.  Instead of showing price trends in this snippet, this data shows the number of arm’s length sales of houses that are already built, or under construction, compared to how many are on the market at this time that are NOT showing as under contract.

  • The number of sales relates to one year prior to 1/25/14 and the number of active listings are the number that were available and not under contract on that day.
  • The number of months’ supply relates to, given the number of historic sales, how quickly the current inventory “should” absorb.
  • The contract-to-listing ratio relates to how many of the current listings are under contract and to me, that number is most telling of current activity. Historically I find that between 25% – 30% is a typical active market and that less than 20% is generally slow, favoring buyers. Over 35% we start to see a seller’s market.

Without further ado, here are the results:

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Based on this information, Ann Arbor still is in seller’s market territory, as is Lincoln and now Milan (when I did this last, Milan was showing over-supplied but that relates to a large number of “to-be-built” houses). Saline, Dexter, Chelsea, Ypsilanti, Willow Run and Whitmore Lake seem to be in a more normal market, and Manchester is slow with the greatest supply compared to historic demand. In most cases, inventory is in the 2-month range, which is an under-supply. Ann Arbor is particularly undersupplied.

Not all houses that are on the market are appropriately priced, and if a house is over-priced for the market (due to condition or functional/external issues, or just too optimistic pricing); these houses show as part of the supply chain but are not yet truly competitive. When Realtors ® talk about how they are finding the market to be highly undersupplied, my opinion is that the market itself is undersupplied, but not significantly so, but there is a definite undersupply of appropriately priced houses in good condition.

If you are curious about the market from the perspective of a 30-year market veteran, follow this blog or contact me directly. I have experience both from the sales side (from 1984-1989) and as a full-time appraiser since 1989. I am always happy to discuss your needs on the appraisal end and am open to discussion as to how to best present data that helps you.

All the best to all of my readers!  Rachel Massey @ www.annarborappraisal.com

Washtenaw County snapshot

Days on market and current activity Washtenaw County, MI

Based on my experience, as days on the market for a property decreases, prices tend to increase. When days on market start to increase, prices tend to stabilize or decline.

One of the largest obstacles in measuring market direction is that closed sales are usually contracted for sale one-to-two months earlier than the closing. As such, the closed sales data lags even with the most recent data available. Including contracted sales would indicate a higher number of days on the market, but as many contracted sales do not close, the data below includes only closed sales, and absorption is addressed further in this discussion.

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The chart above is a compilation of the different school districts in my local area, Washtenaw County. The data refers to days on market of sales, ran in an annualized manner. In other words, each data point is one years’ worth of sales but presented month-by-month. This helps eliminate the seasonality that we see as our market normally slows down after Labor Day and start to pick up in February.

What is noticeable at first glance is the convergence of days on market to a low point around June to July 2013 and a steady increase in days since August 2013. All districts are showing an increase in days on the market other than Manchester, and are mostly back to levels seen in late 2012/early 2013.

After examining the days on market, the next step is to look at how many sales occurred in the most recent period in each market (all of 2013 in this case) and then look at how many are on the market, not under contract, within the first two weeks of 2014. This information provides an estimated supply based on the most recent years’ worth of sales. The last column that chart is the contract-to-listing ratio (CLR) which simply looks at all offerings and compares the number under contract to the total number available and derives a percentage of absorption. From my perspective, a market that is active is normally hovering around 30% CLR and when it pushes upwards to 40% or over, is very active and a seller’s market. Conversely, when it is 20% or below it is much less active, and much less than 20% indicates a buyer’s market. Of course the ratios are all dependent on agents reporting contracts within the required period of their MLS so that it is not lagging by more than a couple of weeks.

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At the same time that the number of days on the market declined in most areas, the number of sales increased. For example, Ann Arbor went from 805 arm’s length sales in 2011 to 939 in 2012 and 1,086 in 2013; yet in 2013 days on the market was virtually identical to 2011 (although it was lower in 2012). Ypsilanti went from 115 sales to 158 to 220, almost double the first year reported, yet days on the market dropped. In each market shown, the number of arm’s length sales rose in this period.

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All data is gathered using the Ann Arbor Board of Realtors MLS. Sales data excludes distress sales and GLR MLS but does include Realcomp and therefore there is some duplication of listings throughout. This is not considered a significant sampling problem due to consistency in application throughout all market segments and current/contract offerings. Data run from 1/2/14 through 1/11/14.

Based on this information, my interpretation is that Ann Arbor looks like it is still very strong, and Lincoln appears to be in the throes of a seller’s market at the moment. Chelsea, Dexter and Saline are in the 20% range, meaning slow but a balanced market, and Manchester and Milan may have crossed into being a buyer’s market at this time based on these ratios.

Note, in each market run, the entire school district is examined, not submarkets. In an appraisal, the appraiser will look at the submarket, or “micro” market that relates to the subject property. If you are interested in knowing how your property adds up in today’s market, contact your local real estate expert for an analysis.

Enjoy – Rachel Massey www.annarborappraisal.com