January 2023 Ann Arbor Area Real Estate Market Update
How did the real estate market in the Ann Arbor area look last month, and what does it signal going forward?
Editor’s Note- MLS market data is available two weeks after the close of the reported month from the Ann Arbor Board of Realtors for the Ann Arbor Area.
Market Stats as of 2/15/23:
30 Year Fixed Rate Mortgage- 6.12% (down)
15 Year Fixed Rate Mortgage- 5.25% (down)
CPI (Jan. Inflation)- 6.4% (still elevated)
Inventory of Homes for Sale- Low (same)
How was the Ann Arbor Area Real Estate Market Last Month?
The pace of the housing market really slowed down in December 2022.
The affects of elevated mortgage rates had started to take their effect and there was uncertainty about the economy heading into 2023.
The 30-year mortgage rate was slightly higher last month at 6.27% compared to 6.12% currently.
Inflation was also slightly higher year-over-year last month at 6.5% compared to 6.4% currently.
The inventory of single family homes for sale was down 17.2%.
New listings of single family homes were down 34.3%.
Days on market were up 56%.
Median sales price was up 8.8% in December to $370,000.
Percent of list price received was also down 1.6% to 98.7%.
The Housing Affordability Index took a steep decline, down 35.6%.
Overall, in December, we saw signs of a slowing market but prices were still holding up.
How was the Ann Arbor Area Real Estate Market Performing in January 2023?
Let’s look at 6 housing market indicators looked at broadly across the entire MLS for the largest possible data sample using data from the Ann Arbor Board of Realtors.
1. Inventory of Homes and Condos for Sale-
(Low Supply)
We can see the inventory of single family homes was down 16.8% from a year ago and down 29.1% for townhomes and condos.
2. New Listings-
(Low New Supply)
Similar to inventory levels, the number of new single family listings were down 7.1% and for townhomes and condos new listings were down 28.9% in January compared to a year ago.
3. Days on Market-
(Fewer Days)
Days on market for single family homes were down 5% and for townhomes and condos down 5.4% from a year ago.
“As long as rates continue their downward trend, we can expect sales to be strong through the rest of 2023 with inventories and days on market remaining relatively low.”
4. Median Sales Price-
(Mixed)
The median sales price was mixed in January 2023. For single family homes the median sales price was down 4.1% to $325,800 and for townhomes and condos it was up 8.4% to $257,000 from a year ago.
5. Percent of List Price Received With Offer-
(Down But Basically Still 100%)
The percent of list price received for single family homes was down 1.7% to 98.6% and for townhomes and condos it was down 0.5% to 99.2% from a year ago.
6. Housing Affordability Index-
(Low and Getting Much Worse)
The Housing Affordability Index took another sharp decline in January 2023. For single family homes, the Affordability Index dropped 18.4% and for townhomes and condos it dropped a whopping 27.7% from a year ago!
So, after looking at all 6 housing market indicators, what is the bottom line for the real estate market in January 2023?
Bottom Line for the Ann Arbor Area Real Estate Market for January 2023
Long term interest rates trending down recently has helped bring more buyers into the market.
However, inventory levels remain low.
Days on market also remain relatively low.
Median sales price was mixed in January 2023 but the sales sample size for the year so far was small.
As long as rates continue their downward trend, we can expect sales to be strong through the rest of 2023 with inventories and days on market remaining relatively low.
To your success!
Arbor Advising has a passion for helping people buy, sell and invest in real estate. We believe real estate is the best way to create passive income, grow your wealth and provide inflation adjusted returns in retirement with fantastic tax benefits.
Want to learn more? Contact us.
Disclaimer:
Always speak to your CPA, investment advisor and attorney before making any investment decisions. Past performance does not guarantee future returns. Arbor Advising seeks to educate and does not endorse any specific product, service or investment.
