Sellers have advantage in crowded housing market

By: Joshua Gordon | Macomb Township Chronicle | Published August 30, 2017

METRO DETROIT — The buildup to the start of school not only has parents scrambling for school supplies and a new wardrobe for their kids, but has also made the housing market in metro Detroit a busy one this summer.

A market saturated with buyers has made for a competitive atmosphere over the past few months, according to local real estate agents. There weren’t enough houses on the market to meet all the demand.

Bill Frohriep, of Century 21 Town & Country in Clinton Township, said the supply and demand has created a seller’s market and made it even tougher for potential homebuyers.

“With a seller’s market, buyers are often competing for properties where there is one property, and there could be three or 10 buyers,” he said. “There is a good, strong demand and, barring any unperceived economic or political issue, I do believe it will continue like this through the end of the year.”

John Farhat works for Keller Williams Realty in Royal Oak and serves clients up and down the Woodward Avenue corridor.

Farhat said that not only has it been a crowded market for buyers, but there seems to be a lack of inventory, which has his clients looking longer than normal to find their dream homes. Move-in ready homes are the ones that go first, he said, and they will receive multiple offers. 

In a seller’s market, Farhat said potential homebuyers can’t sit back and wait, but have to be proactive to get the house they want.

“If you see something come on the market, you need to get in as quick as possible,” he said. “It’s not ‘go look this weekend,’ because it will be sold by this weekend. Do it during your lunch break, during work or after work, and be prepared to write an offer right away.

“If you look to negotiate back and forth for a couple of days, that leaves it open for other offers to come in.”

In looking to make an offer, Frohriep said it is all about making your offer the most attractive to the seller. That can include putting down an adequate deposit, not asking for seller’s concessions and giving the seller the occupancy time they are seeking.

The good news, Frohriep said, is the fall market should be a little more even between buyers and sellers. As families that need to be in a home before school starts get out of the playing field, it slows things down just slightly.

Still, there are first-time homebuyers, families without children and people moving to the area who will still make for a busy market until the snow falls, Farhat said.

Because of that, Farhat said sellers should still have plenty of people looking to buy and shouldn’t wait to get their homes on the market. Farhat expects the market prices to keep trending upward, but if a seller waits six months to get more money for their home, they will just pay more for their next house.

“I encourage anyone thinking about selling to give it a whirl, because the inventory shows buyers are willing to pay top dollar, and good houses are not sitting on the market,” he said. “You won’t have to show a house for months or deal with a lot of open houses before the market shifts around the holidays.”

Interest rates also remain relatively low at around 4 percent. Frohriep said that makes buyers more confident in taking out a larger mortgage to get a home in top shape.

But homebuyers are also looking to be in an area that is comfortable for them. That means close to work, family and the things they like to do.

“No. 1 is being within a reasonable proximity of where people work and do things,” he said. “And familiarity is important, so people may feel fondly toward an area they grew up in and buy in that area.”

Being near a downtown area is also at the top of a lot of wish lists, Farhat said. Cities that have walkable downtowns such as Birmingham, Detroit, Ferndale and Royal Oak are getting a lot of interest as people look to ditch their cars and hit the pavement on foot or bike.

While the market will always have buyers looking for renovated kitchens and bathrooms, Farhat said he is also seeing more buyers looking to flip homes, putting the lower-end houses in higher demand.

“You have people who want the complete renovation that is literally turnkey, and then you have others who are investors,” he said. “They want to do all the work and take everything out. It is the homes in the middle that tend to sit around a little more.”