As we step into the second quarter of 2024, it’s essential to reflect on the transformative trends that have shaped the real estate market in the first three months. Here’s a concise overview of the pivotal statistics and what they mean for you.
Absorption Rate
The absorption rate refers to the rate at which available homes are sold in a specific real estate market during a given time period. In simpler terms, it indicates how quickly homes are being bought up. In Q1 of 2024, the absorption rate in Ann Arbor increased by 4.76% compared to the same period in 2023. This means that homes are being sold at a slightly faster pace than they were last year.
For buyers: This may imply a need for quicker decision-making and a more competitive environment.
For sellers: You may find yourselves in a favorable position with potentially more offers and quicker sales.
Average and Median List Prices
One of the most crucial factors for both buyers and sellers is the list price of homes. The average list price in Ann Arbor soared to $652,701 in Q1 2024, marking a significant increase of 19.15% compared to last year. Similarly, the median list price also saw a notable rise, reaching $572,450, which is a 15.09% increase from the previous year. These numbers suggest a trend of rising home prices, indicating a competitive market for buyers.
For buyers: You may need to adjust your budgets or expectations accordingly.
For sellers: There is a potential for higher profits on your properties.
Average and Median Sale Prices
While list prices provide insight into sellers’ expectations, sale prices reveal the actual value buyers are willing to pay. In Q1 2024, the average sale price in Ann Arbor was $563,653, reflecting a 10.15% increase from the previous year. The median sale price followed a similar pattern, reaching $472,000, which is a 5.27% increase from Q1 2023. These figures indicate that despite the high listing prices, buyers are still willing to pay a premium for homes in Ann Arbor.
For buyers: Be prepared to negotiate or compete with other buyers for properties.
For sellers: There is a potential for higher profits on your properties.
Days on Market (CDOM)
CDOM, or Cumulative Days on Market, measures the average number of days it takes for a property to sell after being listed. A lower CDOM suggests a faster turnover rate and a more active market. In Q1 2024, both the average and median CDOM in Ann Arbor decreased significantly compared to the previous year. The average CDOM dropped by 45.31%, while the median CDOM decreased by 58.33%. These numbers indicate that homes are selling much faster in 2024, signaling high demand and strong market activity.
For buyers: Act quickly when finding a property you’re interested in to avoid missing out.
For sellers: There is a potential quicker sales and less time spent on the market.
When we look at the year-to-date trends for 2024 compared to 2023, we can observe some interesting patterns. The absorption rate has increased slightly by 5.30%, indicating a more active market. Average and median list prices have seen double-digit percentage increases, reflecting the ongoing trend of rising home prices in Ann Arbor. However, despite these increases, both average and median sale prices have also risen, suggesting that buyers are still willing to invest in the area despite the higher costs. Additionally, the significant decrease in CDOM indicates that homes are selling much faster in 2024 compared to the previous year, highlighting the competitive nature of the market.
Will this change in the next quarter?
In a nutshell, the second quarter looks promising for sellers due to high demand and rising prices. Buyers, on the other hand, should get their finances in order, know what they want, and be ready to act quickly. Whether buying or selling, staying informed and working with a real estate expert can help you navigate the market smoothly.
- Prices might keep going up.
The first few months have shown us that home prices might continue to rise, thanks to lots of people wanting to buy homes. - Demand will stay strong.
Ann Arbor is a popular place, and with spring and summer being traditional home-buying seasons, more people will likely be looking to buy. - Watch out for interest rates.
Changes in interest rates can affect how much you can afford. If rates go up, buying a home might get more expensive.
What this means for…
For sellers:
- Homes have been selling for more money and quickly too! If things keep going this way, sellers can expect lots of interest in their homes. This means you might get multiple offers if your home is priced right and in a desirable spot.
- Since homes are selling quickly, make sure you’re ready for things to happen fast. Have all your paperwork and plans sorted out so when the right offer comes, you can move forward without a hitch.
- Even though it’s a seller’s market, setting your home price correctly is key. You want to attract serious buyers quickly.
For buyers:
- With home prices going up and homes selling fast, you’ll need to be ready to make quick decisions. This means knowing exactly what you can spend and what you’re looking for in a home.
- Because homes aren’t staying on the market long, having your loan approval ready and knowing what you want can help you make a strong offer quickly.
- Even though sellers have the upper hand, some room for negotiation always exists. Being flexible with your terms or closing date might make your offer stand out.
In conclusion, the first quarter of 2024 has shown a dynamic and active real estate market in Ann Arbor, characterized by rising prices, increased demand, and faster turnover rates. Whether you’re a buyer or seller, understanding these market dynamics can help you navigate the complexities of the Ann Arbor real estate landscape more effectively.
If you want a free market analysis on any municipality in Washtenaw County, don’t hesitate to contact us.
Download full market statistics here: Ann Arbor | Washtenaw County