Home prices rise as inventories fail to meet demand | News

Sandra Bussell, right, and her partner, Brandon Eller, pose in their home.

CADILLAC — Moving is stressful enough, but finding a home to buy has been extremely difficult, which has driven home prices up.

The County Wexford Equalization Department recorded that the number of residential sales saw an overall increase from 547 in 2018 to 636 in 2021. These figures may leave consumers wondering why sales have peaked when prices are so high.

It comes down to the number of buyers versus the number of sellers, according to Jim Meier, broker and owner of Premier Realty.

“It’s my opinion that we don’t have more buyers, we just had fewer sellers,” he said. “And because of that, we have an imbalance, and that’s driven house prices up dramatically over the last 12, 18 months.”

A drastic increase in appreciation occurred before between 2008 and 2010, Meier said, but prices have actually started to outpace the cost of homes during the recession today.

Although this trend has been escalating for some time, the pandemic is not helping much. Those who would typically sell right now are pausing their plans during the shutdowns. Even with a mostly open state, Meier said many landlords simply aren’t comfortable with strangers entering their residence for visits.

Another side effect of the pandemic is the desire to remain within a community, surrounded by familiar people and a familiar healthcare system.

“Cadillac Hospital has an excellent reputation,” Meier said. “So if anyone knows his doctor…he probably feels pretty comfortable with the medical care he’s going to get here rather than, say, moving to Arkansas, or some warm climate, and you don’t know anyone there, you don’t know who to talk to if you get sick.

When homes come on the market, rising prices don’t take away the desperation of potential buyers. They are moving full steam ahead on all the real estate they can seize, and Meier said it has a lot to do with the lack of rentals. When options are limited, some people have to turn to home ownership.

“There are always things that change in people’s lives. If it’s a married couple divorcing, for example, they now need two houses or two residences, whether it’s a rental or a single-family home,” he said. “Then if people choose to have larger families, they may need a new facility for their new family.”

Buyers have also been willing to compete when it comes to asking price. An example of this is a house in Manton that Meier was selling for around $85,000. He held 14 screenings in the first three days, and of all the offers he received, seven were above the asking price.

It took almost a year for Sandra Bussell to find a home in the Cadillac area. The rent for his old residence had increased by nearly $300 over a two-year period. Once she realized it would be more financially efficient to buy, the search began and she faced fierce competition throughout the process.

“Every house was in a bidding war, and everything was going off the market very, very fast, and it was really hard to find something, actually,” she said. “And everything we found via the market was also in poor condition.”

Eventually, Bussell and his partner found a home within their price range, and the sellers weren’t interested in buyers outbidding each other.

“The asking price was around $110,000, which was great because it was well within my budget,” she said. “And I ended up getting really, really lucky because they accepted my offer of just five thousand dollars above that within 24 hours.”

Bussell’s current home had only been on the market for about 48 hours.

Most homes on the market haven’t lasted more than a week in the experience of 5-star realtor Greg Bosscher. COVID has helped push prices up, but Bosscher said they’ve also been hit by the lack of new construction.

“Then on top of that, regionally here, is our lack of new construction and the cost of new construction, which then drove sales of existing homes just as aggressively as they did, which also drove up prices,” he said.

Interest rates have remained low, so current homeowners looking to refinance could save money by shifting the cost of real estate, but Bosscher said current prices will remain for the long term.

“No one who is ‘in the know’ is predicting a big housing bubble,” he said. “We’re talking about easing and leveling out…in the majority of our markets, that’s likely to be the new normal price.”

Working in banking, Jon Catlin said he was able to grasp this trend early on and it prepared him for the process of selling his own home.

“I’ve always had some sort of mortgage officer next to me or around me, and I’ve kind of tried to get a sense of the pace of what the real estate market is doing, commercial versus the residential,” he said. . “So I knew the hot market would be a good time to sell the house.”

Catlin and his wife saw both sides of the market because they were looking to buy as they sold. Similar to Bussell, they faced competition and had to rely on luck to find a home.

“The one we’re in, our realtor knew his realtor and showed us around the house before it was listed, and we offered him a price above the list price,” he said. “And so they never really had to list it, they just sold.”

The closing process, including inspection and a loan application, was completed within a week.

Going forward, Meier and Bosscher suspect that property taxes and home values ​​will rise, leading to increased revenues for cities, townships and schools. Despite the silver lining, it will be difficult to afford a home for years to come, and Bosscher said the best thing people can do is be as financially prepared as possible.

Maintaining a good credit rating is crucial in the home buying process. For buyers with a higher score, Bosscher said they may be eligible for loan programs and may avoid putting money down.

“We are seeing an increase in wages, but we are also seeing inflation,” he said. “It doesn’t make home ownership out of reach for a buyer, they just need to be prepared.”

For those considering buying a home, Bussell said it’s all about having patience.

“It’s an impatient market, but be patient,” she said. “Just have a little patience, because what you seek will come; It will take time, but it will come. »

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