Hey, I'm Steve, and this is a Steve Volkers group in Grand Rapids, Michigan, and this is market data update. We are in December, obviously we're talking in arrears, so we're talking about November's data. And passed, and it has been eventful this year. Kevin, I, uh, I just wanna say thank you behind the camera. I gotta take a picture of you, big guy, because this has been fun.
We started this at the beginning of the year just with the idea that things were gonna change. We could see a shift coming or something was gonna adjust. I noticed a lot of agents were just publishing stuff saying, oh, this is never gonna end. This is gonna be amazing. Um, and then we saw a correction, so we want to talk about that.
Um, and we're hoping just to keep this thing going in the new year. Right. We, uh, have found that. Uh, we have some bankers that are now following along on a monthly basis and asking me what's happening. Uh, my financial advisor was texting me this morning and we're gonna get her on here, I think. So we might have some guests next year.
Kev, I think, is what we're gonna do, but let's get to the data. That's what you're here for. Thank you for participating. Um, . So I just grab random stuff and then we put the data behind it with, uh, some really just what's happening in the day-to-day of us doing the activity of selling real estate. So this week I just, I, I just printed this, um, Jerome Powell, he's like the really smart dude that like does all the things behind the curtain.
but he actually goes in front of the curtain and talks, and whenever he talks, then the whole market changes. So he is the Fed chairman. He's the one who sort of leads the charge on interest rates and, and the federal policy for the economy. Right. And he said this week that we were in a housing bubble.
This is the. Duh. Right? Like of course we all knew that. Come on. Like we were in a housing bubble, he said from the pandemic. Right? So since the pandemic hit tell really, um, we started seeing it this summer. There was a bubble, right? And we could tell it. And I love the data, Kevin. So we really are gonna show that and have that conversation on the bubble.
Now the question with a bubble. We all remember 2008, 2009, 2010, where the bubble, the housing bubble popped, right? Maybe even exploded. We could probably say the question right now, is the bubble gonna pop or is it just deflating? . That's kind of the word I'd probably use for it. I don't see any popping. I just see a deflating, which was their goal, right?
The fed's goal was to raise interest rates to cool off inflation. One of the biggest areas of inflation or growth. Was in housing from that bubble. The prices were going to up too fast. The inflationary pricing was just too much. Housing was one of your biggest ticket items for purchasing. Obviously, if that goes up 15, 20%, it's no longer affordable.
And there we go. So the question is, or what they've been trying to communicate is their goal in raising interest rates is to soften the market. To have sort of a balanced market, right? To get back to a balanced market or deflate the market a little bit, um, in order to to come back. He even said, so the housing market will go through the other side and hopefully come out better place bef between supply and demand.
So their idea was interest rates will hopefully balance supply and demand, which then will balance the inflationary pricing and bubble. Um, so hopefully we end up with a, what they call soft landing. The question is, are we gonna have a soft landing or not? We are gonna find out, I think, over the next couple months, right?
So we are at the bottom, I think of the landing right now. Um, unless they go and raise them again and we hit a 8% or 9% interest rate, which it sounds like they might level off a little bit. Rates have been coming down for the last, um, couple weeks and so I think if we can just settle into this rate, which it seems like we are.
We might actually deflate to a point where we're at a soft landing and then just can manage without popping the bubble and still have opportunities to for go forward. So, uh, I got a lot of notes here, Kevin. We talked about the fed. What's, uh, what is the date? What is the market saying in Grand Rapids?
Are we softening? How do we act now? So let's get to the data. I'm getting old. Kev. I gotta maybe get the bifocal. I, is it time you think Kevin's saying it's time, but I don't know. I still, I do this little thing where I like, I've learned to like drop 'em when I need to. But anyways, we're just gonna put 'em up and outta the.
So, um, residential sales, we've been talking about this month over month, since the beginning of the year. We're down, we're down 31% in. Sales volume last month compared to last year, 28% times the five year average. We're down 10% this month. Uh, overall, so the last 1, 2, 3, 4, 5 years, we've been about 12,000 units sold.
We're only at 10. Um, last month we only sold 700, right? So we could end up under 1100 units sold for the end of the year, which would be 10% off. That's pretty significant. A thousand transactions is pretty significant in what you're seeing with the market correction or that softening or deflating. We had been seeing this growth of 3%, 6%, 5%, 5%, 6%, 6%, four.
Last month it was 1%, right? So what you're gonna see is that that is a dollar volume year to date. So what we're seeing is maybe at the end of the year, we won't have that big of a growth pattern as we did last year. So, Really interesting to see. Yearly, medium home prices are up 12%, so we are up the last three years, this year we're up 12%.
Last year was 15%. The year before it was 9%, but you have to almost take the, the end, the middle of 2020, which was June and July. Where Covid, we had gone through, everybody was starting to go out, the restaurants were starting to open up. We had to sign in. Remember we had to sign in our name and phone number and almost put blood down if we wanted to enter the restaurant to, to then going through the last.
Basically two years until this June. Um, that's where they're talking about the bubble, and we'll see it in a minute. So, uh, price per square foot leveled off this month compared to last month. Um, the amount of showings to pendings leveled off the big one. The average price per square foot, which we've been really tracking, was negative for the first time.
June, may of 20. Right in the heart of Covid. Right. But since June of 2020 through April of 2021, we have been, um, well, really until October of last month, we have been above a hundred percent. So every month we've sold an average of above a hundred percent of list price. This is the first month that we are below list price on average, and we're seeing that throughout the market.
We'll talk a little bit of some of the stories in that. Okay? Okay. Okay, let me go. There was one other new listings are down 13%. Right? So, um, then also, um, we're seeing the new listing in the sales being the exact same. So we sold a 700 units were listed, we sold 751. So what does that. Oh, there's so much good stuff in here.
Okay. The packet Kevin puts up on our website, all these every month is on the website, so you can see me rambling about the packet, but the packet is down below. It's great info. What I would say is I like that number 707 50. I don't like it. But what's gonna occur again is we're gonna get into this spring having the same issue we've had so far.
I'm already hearing agents complain again, which they have not complained the last two to three months. Last two to three months, we've been trying to make people buy. We've been talking about all different ways of changing interest rates to make them feel good about their finance. What we're gonna get into is a normal market where there's enough buyers in the market that are still gonna keep active, but we're still gonna have a supply issue.
You can't list 700 and sell seven 50. That's a negative amount of listings on the market. So instead of having that market go from like, Point six, the spring up to 1.2 months of inventory, we're gonna start tracking back down that inventory level. When you have supply and demand, which is normal economy, you're gonna have more demand for those homes.
And then we're gonna start seeing the pricing going back up. Right? So we're, we've talked about this, I think we said it last month and the month before. This is like one of your best situ. Over the next couple years, I think to buy is this six month window. Even towards the next spring. We're already gonna get hot.
We're starting to see it now. Uh, buyers texted Rachel and I yesterday, three houses listed this weekend. They wanna see all three have offers in our pending. We haven't seen that we used, we were sitting back a little bit. Yeah, Whent, you wanna see 'em Thursday? Great. You know, 70% would still be out there.
Maybe one out of the three would be. But now all three were gone and we're starting to see the creeping back of appraisal gap guarantees. Or we're starting to see on the good listings where people are going above list price again, and they're covering that cost or they're doing the escalation cost saying I'll pay a thousand dollars more than anybody other up to acts.
We have not seen that on the regular basis. Couple months. Yes, it still is out there for the good listings. And there'll always be an agent that's publishing that They sell stuff in three days and they're amazing. But I'm talking about averages and I'm talking about data, not just little tidbits on social media, about an agent being amazing.
They might be amazing. And just saying the reality is data, not just highlights and, and stuff like that. So, I would act soon. I think buyers are getting used to the new rates. Agents and lenders are getting used to changing or helping them see an opportunity by paying down points, creating a new thing or what.
We also are seeing that in the economy, jobs are still steady and people are getting raises when they get raise. Then all of a sudden the affordability goes away, right? So it wasn't affordable. The last couple months, they get end of year raises. All of a sudden it's affordable for them to buy again cuz they're making more money.
And the interest rate is no longer, they, they bridge the gap of that interest rate increase. Right. So, uh, I had a, a publisher call me that, uh, runs a pretty big online platform and a pretty big, uh, news entity. Um, they called to interview this week and they believe that Grand Rapids is gonna be in the. 10, I just said it.
Top 10 markets for increased value next year. Their economists, their people, their widgets behind the thing, think we might actually see a 10% growth again next year. Now, that's not 15%, but 10% is still freaking amazing, right? Like, I'm sorry, 10% on a $300,000 house is $30,000. You buy it right now, at the end of the year, if we go out by 10%, you just got $30,000.
By just paying the mortgage where you gotta live somewhere. Anyways, so that's the beauty of real estate. Now, those that bought this past year, like in June and July, they might be freaking out cuz they're like, oh man, we pay top of the market in May and now it's end of mo end of the year. We don't see our value increasing by 10%.
Hold on, you'll get there. It's just, we had a little bit of a bubble. The bubble needed to deflate enough to rebalance the market, and I think inventory still is gonna be our greatest issue if rates stay similar to where it is. Um, boy, that's a lot of stuff I just said. Anything kav that we need to go back through that you thought was interesting?
Not that I, no, not that you can think of. Guys. Um, I just still wanna say, housing is always gonna be needed. You need a place to live, and rent continues to go up. They're building so many rentals in West Michigan. They wouldn't be building hundreds of units of rentals if they didn't see a need for housing and putting people in it.
So these builders are not building as many single family homes to. But they're building thousands of rental units, so they believe there's lots of people either staying in Grand Rapids or are gonna need housing over the next couple years. If they're putting all that money in the banks, they're giving them the money to buy and build the rentals.
But we're not building houses. We're not building enough houses. What happens to the housing value? When you get sick of renting and you just lost out on the 30010% growth last year, you're gonna call. We're gonna show you a house. You're gonna pay more in a year from now than you would right now. That's the way that we're seeing it over the next couple years still.
I'm Steve. This is December's market. Happy holidays. I love Christmas. I, it's sort of like politically uncorrect to say Christmas, I think, or something like that, but I don't really care. Uh, I really love the holidays and I hope that you and your family are well, that this brings you value. Thanks for participating along.
I'm Steve. We'll talk to you later.Posted by Admin Volkers on