At the beginning of the year, national industry forecasts called for home price appreciation to slow to about half of the double-digit increase we saw last year. The thinking was that inventory would increase from record-low levels and put an end to the bidding wars that have driven home prices up over the past twelve months.
However, that increase in inventory has yet to materialize. The National Association of Realtors (NAR) reports that there are currently 410,000 fewer single-family homes available for sale than there were at this time last year.
This has forced those who made appreciation forecasts this past January to amend those projections. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, the National Association of Realtors, and Zelman & Associates have all adjusted their numbers upward after reviewing first quarter housing data.
Here are their original forecasts and their newly updated projections:
Even with the increases, the updated projections still don’t reach the above 10% appreciation levels of 2020. However, a jump in the average projection from 5.3% to 7.7% after just one quarter is substantial. Demand will remain strong, so future appreciation will be determined by how quickly listing inventory makes its way to the market.
What About Here in Northern Michigan?
It’s difficult to say whether or not Northern Michigan is tracking these same patterns exactly, but our first instinct is to say that yes, this is true here too. Our local market is feeling the inventory pinch thanks to some of our inventory being converted to short-term rentals, to the slow down in newly-built construction thanks to higher material costs, and other local factors.
Our Takeaway: There hasn’t been anything resembling a cooling market here; we’re expecting to see home prices continue to rise, likely through the end of the year.
What Does This Mean for Northern Michigan Home Sellers?
There’s definitely an opportunity to sell your home for a premium price right now. The first step in this process is to find out how much your home is worth; something the Brick & Corbett Team is an expert in. We’re getting ready to launch our first annual Do You Know? campaign with the aim of making sure everyone in Northern Michigan knows exactly what their home is worth. Don’t rely on Zillow to provide you with a generic, automated valuation; a computer in Seattle doesn’t know your market – we do.
What Does This Mean for Northern Michigan Home Buyers?
Home buyers are going to continue to face an uphill battle when it comes to getting a home in this competitive market, but it isn’t impossible, and we’ve got clients that are having success every week by being active, ready to jump when something hits the market, and working with our team of expert negotiators to make sure they are getting the best deal possible.
Entering 2021, there was some speculation that we might see price appreciation slow dramatically this year. Today, experts believe that won’t be the case. Home values will remain strong throughout the year. Reach out to the Brick & Corbett Team today to take the next step in your homeownership journey.