Ypsilanti Archives - annarborappraisal

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.

Bromley Park updated

Bromley Park is a subdivision developed and built by Pulte Homes from 2002 through 2004, south of Geddes, north of Clark and east of Harris in Superior Township in the Willow Run Public school district. It encompasses the streets East and West Avondale Circle, Ravenshire, High Meadow, Wexford and Glenhill Drives. The subdivision has open green spaces to the west and to the north up to Geddes Road, and along the south and east there are many wooded views. Along the interior streets there are some areas with woods and walking paths. The development has a shared pool with the condominium development to the west. There are 266 homesites within this detached single-family development.

Further information about Bromley Park can be located by accessing the development website at
http://www.bromleypark.org/

In 2015, dues were $425 for the year.

On 1/13/14 I ran statistics related to changes in the market from 2011 through 2013 in Bromley itself, showing a decline in short sales and foreclosure properties and an increase in arm’s length sales, as well as an increase in sales overall. Sales prices also showed as on the increase, rising from a median price of $135,500 to $169,500 over that three-year period. That information is found on an earlier blog post found here.

So how is this development faring in todays’ market? Recent sales are higher than the previous peak around 2005 (or statistics do not go back adequately that far and I ran 12-years’ worth of sales). The low part of the market in this development is between late 2009 and late 2012, and prices reached previous peaks around 2015-16, rising since then as shown by this chart.

Over the past two years, the increase has been strong as well, rising from an average sales price of $229,315 to an average of $254,167 from one year to the next (10.84% increase). The median price has increased from $225,000 to $250,000 (11.11%) with the same information, with similar average and median gross living area.

Currently there are three houses offered for sale in the development with a median asking price of $279,900 and an additional one house under contract, which has an asking price of $244,900. The gross living area for the house under contract is 1,795 sqft, which is in line with the median and average sizes of the sales in the 2-year study. The median size of the active properties is higher, at 2,156 sqft, which may account for the higher asking prices. With only one out of four houses under contract, the market shows 25% absorption, which is not robust and could indicate a shift, in particular as the one listing under contract points to a lower price than average and medians.

As there were 12 sales in the past 12-months, the current inventory indicates a 3-month supply. These factors point to a stable market, to possible pressure downward due to the one pending sale. This means, that although the trend lines show increasing, the market could be changing. Looking deeper into the sales that sold last year and the current contracted property, shows similar style houses in the same price range overall, indicating stable. An appraiser would not be faulted for calling the market either stable or increasing based on all of this information.

For any questions related to this, or other information on this website, please contact me at rachmass@comcast.net

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:

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.

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.

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.

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