The housing market in Michigan appears to be slowing down as per data from Realcomp, a Michigan real estate data firm. The past year has seen homes sales decline by almost 30%. Additionally, the duration a home remains on the market has increased to an average of 43 days, compared to just 35 days in January 2022. This is a significant shift from January 2021 when homes remained unsold for a median of 47 days. Several factors contribute to these market conditions.
Limited housing inventory: Michigan, like other parts of the US, is currently experiencing a shortage of available homes. This has created a competitive seller’s market as eager buyers attempt to outbid one another to secure a home. This has contributed to an inflation in home prices, which could be contributing to the reduction in sales.
COVID-19 pandemic: Michigan has seen some of the highest rates of COVID-19 infection in the country, which has made many buyers hesitant to purchase homes. In-person viewings of homes became difficult during this time, further adding to the sluggishness in the market.
Economic uncertainty: Despite recent economic recovery efforts, many Michigan residents remain cautious about making significant investments such as purchasing homes. This, coupled with rising interest rates, makes home purchasing less appealing to prospective buyers.
While the above factors indicate a slowdown in the housing market, it is important to note that this is not an irreversible trend. The market could rebound with a shift in any of the above factors, particularly an increase in housing inventory and economic stabilization.