2015 and how it compares to previous years
2015 is behind us and this means a time of reflection on the year and also a time to look forward to the next year.
I have a background as a CPA so I probably enjoy looking at the numbers more than most, but I do think that it’s interesting information for anyone who currently owns a home or is thinking of getting a home. So, I’ll try to keep it from getting too dry by just giving you the highlights:
Just to give context: 2006 was the year before prices dropped, but sales really started slowing down and it set the stage for the fall in prices that we experienced. It was in 2006 that we experienced the highest average sales price that we had had to that time: $163,924 (in the Grand Rapids area). The low of $107,546 was experienced in 2009 and then slowly started to climb in 2010 and 2011 to $114,671 and $118,967, respectively. We started to make greater gains as inventory fell to where we went back to what had been our average in 2014 ($163,171 that year) and surpassed it in 2015 at $175,562!
Of course, much of this is spurred along by the classic economic theory of supply and demand. We calculate the average months of inventory by looking at how many homes are on the market and at the current rate of sale how long it would take for every home to be sold. Generally we consider 0-3 months a seller’s market, 3-6 months a balanced market, and over 6 months to be a buyer’s market. At it’s worse, our inventory had risen in 2008 to a staggering 13.3 months, over double what is considered to be a buyer’s market. It continued to be a buyer’s market through 2011 and then levels dropped below the 6 month level where all of it sudden (it felt like) we were experiencing a seller’s market. Inventory for 2015 was at 2.5 months which meant much more competition than a few years before, putting upward pressure on pricing.
What do this mean to you?
If you’re a homeowner, it most likely means that your home has recovered in price. Not everyone experienced the same percentage increases across the board but there has been upward movement almost everywhere.
If you’re a homebuyer this most likely means that the interest rates will go up as the government and the markets feel more comfortable that we’ve made a recovery. I don’t think they will skyrocket overnight, but this combined with increasing prices will affect affordability in the future. (If you’re waiting for a better time, there won’t be one. Buy now!)
To Sum Up: If you’d like to discuss how it has impacted you, personally, please let us know. We are always happy to look at the value of your home!
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