Nationally home prices grew 6.2% in 2017, which is the largest annual growth since 2013. Not only does this equate to $15,000 equity bump for 2017, but it also suggests that the economy will experience an extra $50B in consumption over the next few years. Of course, this $15,000 average is not demonstrated equally across the country. Most of the equity is concentrated on the coasts, with average California homes gaining over $40,000 in wealth. Michigan experienced a very significant $11,000 gain per home. Year on year for Oakland County, median sales price increased from $215,000 to $234,900, almost 10%, leading the national average. This increase in median sales price is economic boon to Oakland County. The average monthly closed sales amount is now almost $400 million greater than it was one year ago.
Among homeowners with mortgages on their properties, which totals just over 60% of homes, home equity grew by over $900B from the 3rd quarter 2016 through the 3rd quarter 2017. This is a greater than 12% increase in equity. The total number of homes estimated to be “underwater.” That is, homes with mortgage loan balances higher than home value is 2.5 million, or 4.9% of all mortgaged properties. This total number of homes is down over 20% from 2016, when there were over 3.2 million homes, or 6.3% of mortgaged properties.
As mentioned previously, negative equity is down to 4.9% of all mortgaged properties nationwide. As expected, some states are faring better than others. Louisiana is in the worst shape at 10.4%, and the only state to be in the double digits. Illinois, Florida, and Nevada are the next three with the highest percentages. In the Midwest, the Chicago area is worst off, demonstrating over 10% negative equity share. Michigan sits at 6.4%, 1.5% above the national average. The northwest, Washington and Oregon, along with Texas, Colorado, and Utah are all less than 2%.
Overall, Oakland County has almost 7% less new listings year on year from February 2017 to February 2018. During the same time period, the total number of homes for sale on the market dropped almost 20%. Unsurprisingly, as inventory continues to thin out, the average days on the market also decreased almost 20% to 32. Because fewer new listing have hit the market over the past year, Oakland County now only has 2.8 months of inventory available. This is far lower than the 6 months considered optimal for a balanced market.
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- Alex “Mi Real Estate Guy”