Major metro areas around the country are seeing a long-desired uptick in the inventory of homes for sale, but Southeast Michigan remains an outlier.
That’s according to a new report by online brokerage firm Redfin, which found that for the four weeks ending May 26, new listings were up 7.8% nationwide, with markets including San Jose, San Diego and Oakland, Calif., and Phoenix all seeing boosts of 20% or more, meaning buyers have more options.
Not so in metro Detroit, however.
For its purposes, Redfin breaks up the area into two regions: Detroit, which consists of the city and suburban Wayne County, and Warren, which consists of Macomb and Oakland counties. The two areas saw new listings drop 3.4% and 1.9%, respectively, over the four weeks leading up to May 26 when compared with one year earlier.
The current market in metro Detroit makes for a “unique” and challenging period, according to Frank Locricchio, broker and Realtor with Realty Executives Home Towne, a brokerage with offices around Southeast Michigan.
Some of the above-mentioned markets are seeing their unsold inventory increase, per Housing Wire. In metro Detroit, and the broader state, new construction remains slow to materialize.
Meanwhile, as has been true for the last couple of years, homeowners with low mortgage rates remain tied to their current houses, facing something of a double-edged sword, Locricchio said.
“Rates are still driving everything and if we see any relief there that might spark some activity,” Locricchio told Crain’s. “And I think there’s (uncertainty) as far as sellers go (about) what’s the next step. We don’t want to commit to selling because we don’t know what we can buy yet.”
While metro Detroit housing inventory has shown some signs of improvement, the situation remains marginal and the best inventory continues to sell quickly and at over asking price, according to Locricchio. The return of bidding wars in Southeast Michigan has been alluded to by other Realtors Crain’s has spoken with as well.
Locricchio added that price drops remain something of a rarity in the region. But that’s not the case in many other parts of the country, according to Redfin data.
The report this week noted that still-elevated interest rates have weakened buyer demand to the point that price drops across the U.S. hit their highest level since November 2022. Redfin data notes that the median asking price nationwide dropped roughly $3,000 to $416,623 in the last week, the first decline in six months.
The above-mentioned metrics shaping metro Detroit’s housing market would seem to embolden claims of the state’s housing shortage, now top of mind for state-level policymakers.
Earlier this week at the Mackinac Policy Conference, the administration of Gov. Gretchen Whitmer increased its goal of permitting, building or rehabbing 75,000 housing units over five years to 115,000.
“It’s ambitious, it’s achievable and it’s absolutely necessary,” Whitmer said Wednesday during a news conference. “Our housing supply is not where it needs to be for several reasons: a decadelong slowdown in construction following the 2008 recession and a lack of state investment. Now we are raising our goal because we’ve been exceeding our targets, driven by our dedicated investments.”
