The Lansing Area Housing Market Continues to see Steady Growth
“I think the greater Lansing market will continue to have a strong year. Property values continue to stabilize and slowly increase. The inventory in specific pockets is thin and moves quickly,” said Matt Robertson, president of the Greater Lansing Association of Realtors (GLAR). “Real estate was down for a number of years. But it’s cyclical like the stock market. Fortunately, due to economic stability and our diversity, we’re in the forefront of a good market.”
GLAR’s market analysis for August reported sales volumes topping $80 million and sales count — the total number of single family, condominium and townhomes sold — at 570, both up from August 2014. Among the local real estate firms that track region-wide statistics, Tomie Raines Inc. captured the strong showing through the first two quarters in its Greater Lansing Home Sales Statistics report. It found that the average sales price for homes increased to $141,482, compared with $129,201 for the same period in 2014 and that the number of units sold was 2,832 versus 2,746, a 3.1 percent gain.
“I think people are feeling pretty confident now. There’s a sense of confidence and there are a lot of jobs,” said Beth Graham, who is slated to become GLAR president in January. She expects the strong market to continue as long as there are no international or national events that “cause people to pull back.”
The strength of the Lansing housing market mirrors a strong summer sales season nationally.
The RE/MAX national housing report of 53 metro areas surveyed in August reported that the average number of sales in August was up five percent year-over-year. For the first eight months, the increase was 5.8 percent.
“The Median Sales Price of all homes sold in August was $215,000, which was 7.5 percent above the price seen one year ago. The inventory of homes for sale continues to challenge the market with 3.5 percent fewer homes for sale than in July. At the current rate of home sales, the resulting months supply of inventory in August still favors sellers at 4.1 on a scale where 6.0 months indicates a market balanced equally between buyers and sellers,” RE/MAX reported.
But real estate experts caution that broad sales and pricing numbers can distort a market that is extraordinarily local. “Real estate sales are very specific to a community, to certain neighborhoods and school districts,” Robertson said.
Coldwell Banker Hubbell BriarWood produces a detailed quarterly report on home sales by community that illustrates the wide variation in pricing and time on the market throughout the region.
For example, in Lansing, for the quarter ended June 30, 2015, the average sale price for a home was $69,867, up 12 percent year-over-year. Average time on the market declined to 73 days from 77 days, and the time taken to clear the total inventory of homes declined to 4.2 months compared with 5.12 months a year ago.
Compared with other communities, prices are well below the average. At the pricier end of the spectrum is Okemos, where the second quarter average sale price was $266,162, compared with $250,096 a year ago. Time on the market stretched to 68 days compared with 47 days a year ago, though still better than the regional time of 73 days. In East Lansing, the average sales price was $189,223, up 5 percent. Time on the market was 60 days compared with 83 days a year ago.
Overall, BriarWood reported second quarter home sales for the region at 1,474 units with a total value of $210 million. For the same period in 2014, units sold totaled 1,331 with a total value of
“It’s totally a sellers market. There are fewer listings and the demand is very high,” said CEO Bob Hubbell. “We closed out August as the best pending sales volume month in my company’s history. Average price is up significantly; 2015 is by far our best year.”
Like others in real estate sales, Hubbell expects the strong market to continue into the coming year. “We are predicting, and the experts are saying, there will be four more years before they see any recession.”
While market fundamentals remain strong, Hubbell said new closing procedures ordered by the U.S. Consumer Financial Protection Bureau to address problems that contributed to the national housing meltdown will give buyers more time to review loan and closing documents. Buyers must be given an estimate form summarizing the terms of a mortgage and estimate loan fees and closing costs in a format that is easy to read and understand. They replace more technical truth-in lending and good-faith estimate documents previously part of the house closing process.
Hubbell said he expects the change in procedures to lengthen the closing process, especially early on. The changes were initially to take effect in August, but have been pushed back to Oct. 3.