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It’s a Matter of Inventory

It may come as a surprise, but the word I would use to describe the inventory of real estate in the Detroit area today is “tight.”

Believe it or not, there aren’t many homes on the market – at least those homes that are meeting the two main criteria for buyers: homes that are priced absolutely right or homes with the WOW factors that meet the immediate needs of today’s buyers.

“But I see homes all over my neighborhood that are for sale. How can inventory be tight?”

These homes you see don’t have the things buyers are looking for. What has happened is homes that were priced right (maybe foreclosures or distressed sellers) have been scooped up by speculators or buyers that were willing to put a great deal of money and work into the property.

At the same time, homes with the WOW factors that I mentioned — granite countertops, finished hardwood floors, stainless steel appliances, updated kitchens and baths, professional landscaping – are not on the market because people are either staying in their homes (with these upgrades) or people are not willing to spend the money to make these upgrades.

And because the majority of buyers are looking for the “move in” ready home, they are having a difficult time finding houses with the WOW factors.

Consequently, homes that have sold recently were sold at — or slightly ABOVE — the asking prices. It’s a basic economic principle: supply is tight while demand has picked up, so prices are on the rise in the cases of the homes we have worked with.

We think three things have contributed to our current situation: 1.) our market has stabilized a bit as confidence in the auto industry has come back. 2.) sellers are finding ways to stay in their homes so that they don’t have to sell at “give away” prices anymore and 3.) buyers are patient these days and willing to wait for exactly the right property for their situation.

If you are selling your home, it is time to be patient. Inventory is tight, so you can work that to your advantage, holding out for an offer at the right price. If you are buying, work with an agent who is willing to go the extra mile to find the right property.

Yes, inventory is tight, but the right property is out there for you. Make your agent find it for you.

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