The 2020 Ann Arbor real estate market is off to a strong start with buyers and sellers coming out early. This article provides an overview of the current Ann Arbor market conditions for all Ann Arbor MLS areas. We compare the early 2020 real estate market to January of 2019, with graphs that show the trends in market activity over the last five years.
When you look at the 5-year view, you begin to see the market cycle take shape. We divided the larger Ann Arbor MLS market in two segments, above and below $500k.
The Market Above $500k For All Ann Arbor MLS Areas
6-month market trends on for sale (light green), sold (dark green) and newly pended properties (red line) over a 5-year period
Property Sales (dark green bar)
In January, property sales in the luxury market ($500k +) for all Ann Arbor MLS zip codes, were down 1.6% from January of 2019.
Current Inventory (light green bar)
Compared to last year, the total number of properties available this January was lower by 18 units or 0.9%. Inventory is down 2.6% compared to the previous month.
Properties Under Contract (red line)
There was a 41.8% increase in pended properties in January compared to December and pended properties increased 19.4% from this time last year. The spring market is off to a quick start, a trend that has been occurring nationwide since 2015.
Days On Market And Sold Price vs. Original List Price
6-month trends in avg. days on market and sold price vs. original list price going back five years.
The average Days on Market (DOM) shows how many days the average property is on the market before it sells. An upward trend in DOM tends to indicate a move towards a Buyer’s market while a downward trend indicates a move towards a Seller’s market. The DOM for January 2020 was 83, up 5.1% from 79 days in January of last year.
The Sold Price vs. Original List Price reveals the average amount that Sellers are agreeing to come down from their original list price. This month the Sold Price was 92% of the original list price which is up 1.1% from December and down from 2.1% in January of last year. You can see the trend has been pretty consistent through this market cycle.
Takeaways
Months of Inventory based on Closed Sales (6-month trends over the last 5 years.) Buyer’s market: more than 6 months of inventory based on closed sales. Seller’s market: less than 3 months of inventory based on closed sales. Neutral market: 3 – 6 months of inventory based on closed sales.
The Ann Arbor luxury market is a buyers market with 11 months of available inventory. There should be good opportunities for buyers and sellers this spring with homes in good conditions and locations selling fast leaving overpriced homes or those in lesser condition to sit. Low-interest rates and a continued strong Washtenaw County economy should make this another strong year. The trend is moving towards a buyers market though.
The Market Below $500k For All Ann Arbor MLS Areas
6-month market trends on for sale (light green), sold (dark green) and newly pended properties (red line) over a 5-year period
Property Sales (dark green line)
Sold properties in the Ann Arbor market under $500k are up 10.2% compared to January of last year.
Current Inventory (light green bar)
Inventory was down 2% this January compared to January 2019 and is down 27.8% compared to December.
Properties Under Contract (red line)
Pended properties went up this January 10.2% compared to January of last year, an indicator that the spring buyers market is picking up earlier this year than last in the Ann Arbor market as a whole.
Days On Market And Sold Price Vs. Original List Price
6-month trends in avg. days on market and sold price vs. original list price going back five years
The average days on market for a property below $500k is 49, this is up 14% from last January and 19.5% from December 2019. The sold price vs. the original list price is down 1.1% from last year. These are both positive indicators for buyers who’ve struggled to get into homes in affordable market segments for the past few years due to a strong seller’s market.
Takeaways
Months of Inventory based on Closed Sales (6-month trends over the last 5 years.) Buyer’s market: more than 6 months of inventory based on closed sales. Seller’s market: less than 3 months of inventory based on closed sales. Neutral market: 3 – 6 months of inventory based on closed sales.
The market for homes below $500k in Ann Arbor is shifting slowly from a strong seller’s market to a neutral market. This is evidenced in the increase in average days on the market (DOM) year over year as well as a slight increase in the available months of inventory this January compared to last.
This is good news for buyers who have struggled to find affordable inventory in years past. Sellers should consider selling into the strength of the continued strong market.
Summary
We are expecting a strong spring/summer market this year, perhaps the strongest in this long market cycle and we are seeing support for this with January and February buyer and seller activity. There is no reason to wait to put your house on the market as buyers are already there shopping. Make sure your home is in top condition and well polished to maximize curb appeal. As inventory increases, there will be more competition for sellers.
The long trends are showing that we are moving toward a buyers market but gently. If you are ready to buy or sell, take advantage of the low-interest rates and continued strong economy and make your move.
Housing markets can vary greatly by neighborhood and this is a broad total MLS view! You will want to evaluate carefully what is happening in your specific neighborhood.
If you have more questions about the Ann Arbor Real Estate Market, or about the pros and cons of listing/buying now versus later, contact us! We’d love to talk in more detail about what we are seeing as real estate professionals in the Ann Arbor area.
