In this day and age we have countless tools to make things easier. There is an app for just about every possible problem, an algorithm for every trend and if we don’t know the answer we search for it on the Internet.
We have certainly come a long way, but despite all of these technological advances we have experienced, some things have remained. In this case there is no app to fix what the real estate market has left us with and algorithms cannot predict the future to increase your odds of getting it right. The real estate market has left so many with an uncertainty and even a slight fear of what the market will do next.
There is no arguing that these last few years have been a nightmare for many homeowners but no matter how dark is has been, there is a glimpse of light at the end of the tunnel.
Here in Michigan we have been part of just a few markets that have experienced positive gains in the housing market recently. More specifically prices of homes for sale in Rochester have increased around 1 percent from last year.
If your first reaction is "Who cares about 1 percent?" take a moment and hear me out.
According to U. S. Census data, up until 2008 the annual new home price increase was 5.4 percent but this statistic does not take into account the size of these new homes. Annually, up until 2004 the size of new homes built increased 1.6 percent and we all know an increase in square footage will also mean an increase in price.
So thinking about it from that perspective, this 5.4 percent we were all told about would actually be an inflated percentage as it relates to existing homes.
Even though math won’t allow this, just for the sake of my point if you subtracted 1.6 percent from the 5.4 percent we would be left with 3.8 percent. Now in reality that 3.8 pecent is not accurate at all, yet it could very well be closer to the actual average existing home price increase than the 5.4 percent of new houses.
With that explained, 1 percent compared to the theoretical 3.8 percent is closer then to the 5.4 percent we were told.
The important point to think about is this means we do not have as far to go as many might think for Michigan’s housing market to get back on track.