Grand Rapids Area Real Estate Report w/Steve Volkers - September 2023

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(Video Transcript)

 Hey, I'm Steve Volkers, Steve Volkers Group, now at Five Star. So, we added another brand connected to us and made a move. So, if you haven't seen the video, feel free, we'll post it again down below, maybe in the comments that you can see why we made the move to Five Star. But we are talking about the market. Like always, we've got the real estate market data that Kevin puts together for us. And I've got a lot of tabs today, a lot of tabs. Trying to figure out what's going on and I get it that everybody doesn't really know But I think we're maybe I put down on my notes here maybe stabilizing That's my hope or my goal right now is to try to see if the data starting to show stability.

Even though everything is down compared to last year, is it the new normal, right? And how long then is the new normal gonna last? So, if we go into all the data, which you can get this book, uh, obviously from our website, and you really are going to see everything is still down. So residential sales compared to last year, 21%, last month was 20%. So similar number, right? Same thing with the five-year running average. We're at 29 percent on the five-year running average. This would make sense because we're going down steadily and that number is going to come down. Same thing, year-to-date, uh, closed transactions were 16 percent down compared to last year. Now, with that number, if I take the 16 percent times, minus the 16 percent off of last year, that would only put us at 9, 200 units, right? So if I do that math, that would then be for nine, 10, 11, 12, that'd be 3,000 fewer homes sold not last year, but the year before. So in 2021, we had basically 3,000 more homes that were available to sell.

Everybody thought the market was crazy then because interest rates were low. But we at least had inventory to sell right during that period so right now we're at maybe getting down to nine thousand ish units, which would be the lowest that I've ever seen and I've been doing this 17, 18 years. We've never seen that low of inventory sold. Year-to-date closings are 18% down and dollar volume is also. So last year when we were doing these data,  what we found is that the volume at the end of the year stayed up, right? And what I mean by volume is the total amount amount of financial sales, right? So if a $300,000 house is your average, how many of those sold is the total value, not the units. So you've got units or you've got volume. Volume is what we're talking about and that is down 12 percent now. And that has been sort of, again, the average 9, 11, 11, 10, 11, and now 12. So you're seeing some markers to say that our, maybe we're stabilizing, right? We're down 11, 12% median sale price is up though still at 7%. And then I'm going to flip this over and this is where I think we're starting to see some of the stabilization.

Which is the list price to the sale price. And that does not take into effect if someone drops their price. So we are seeing price reductions. So if you reduced your price, let's say you had a $300,000 home, didn't get an offer on that first weekend, realized that you overpriced it, dropped it to $280k, and all of a sudden got an offer for $285k, that would show as an increase, not as a decrease. So it's a little skewed, but last month we were at, 1.029% and we are at the exact same number for this month, ultimately. So what we're finding is that maybe we're starting to stabilize here. We have, you know, some numbers that are looking the same month over month, and so we'll see. What I am hearing and what I am seeing, a couple of things really, it's the same thing. We wrote an offer. One is listings aren't always doing the weekend hold anymore. So the traditional way that over the last three years, it seems like a lot of agents have started to do is list on a Wednesday, or Thursday offers due Monday, or Tuesday, review it within 24 hours of that, and try to get the bidding war up…how many deals can we get? But what we're finding is that sellers aren't doing that as much. And so if you're not in that house in the first 24 hours, you might not get an opportunity. Even if they scheduled an open house, I had one of those in Alger Heights, a long-term client reached out and said hey Steve we want to see this house sometime in the next couple of days. Looks like there's an open house, texted the agent and came to find out they already had an offer on it in two hours. They had to accept it or decline it and they were thinking that they were going to accept it. So I had a two-hour window to get my clients in and make an offer to compete with the offer that was on the table. We actually did win that one by writing above full price, but so did that first client. So what I'm saying is not always is the open house or the delay so a lot of our client's buyers have gotten used to this delay idea or this idea of I have time, and we're seeing that not play out.

I was talking to another agent in the office here, at Five Star, and they said the same thing. Listed a property yesterday, and their goal was to sell it in 24 hours. For multiple different reasons, the family just didn't want to have it sit out all weekend long. They wanted it sold.   They got one full-price offer, and I think they took it.

So, the difference though, is they didn't have lots of other showings coming up. In all kinds of different things. So you have to balance what you want and be ready to go. So when I or other agents say make sure that your pre-approval is all set up, make sure that you know what you want, make sure you reach out to us right away when you see a home that comes on the market that you're interested in. We're doing that now because the market has shifted and we also are finding that sellers are more interested in just taking an offer. Because they might have another house that they want to buy, that's contingent on their house selling, you name it, but we aren't seeing necessarily that hold for the whole weekend situation playing out anymore.

So rates are up, sales volume is down, I think we're stabilizing, and then the last thing is like moving isn't as bad as you think. So I was listening to a podcast this morning and they talk about sort of the anxiety of the unknown right and so and then listening to pundits or people in the news and saying the market's gonna crash. You name the thing. It doesn't matter. But as human beings, the news tells us the negative and then we get too anxious about the future. So moving is not that bad actually. It does take time. It does take energy. But if now is that time don't let the low inventory stop you don't let interest rates stop you. I think there are some really nice deals that are going to be out there over the next couple of months And I think this is one of those sort of sweet spots It might not feel like that because there's not a lot to buy. But when the right house comes up, I think it will be that sweet spot over the next, I don't know, maybe three to four months until we hit the spring market next March, that you can pick up an opportunity that you might not pick up.I think next, March and April, once we hit the spring market, we're going to get back to, again, multiple offers. A little bit of a price increase, especially if rates go down. I don't know if they'll go down. A lot of lenders are pitching that because of the election next year rates will stabilize and or go down to make sure that someone is elected. We'll see.   Election years are always goofy and never really know what's going to happen with the market. So, to end, I would just say, feel free to reach out. We'd love to help you. That's the market update here at Steve Volkers Group at Five Star. I'm Steve. Thanks for tuning in again. See ya.