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Northwest Michigan September 2022

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5 County Condo Summary

107

Available Homes
-24% from last year

369

YTD Closed Sales
-21% from last year

$345K

YTD Avg Sale Price
+23% from last year

$127M

YTD Closed Volume
-3% from last year

Monthly Activity

All

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales476055468369-21%
New Pendings555247488387-21%
New Listings788063559500-11%
Price/SF$252$297$285$202$27636%
Avg Price$322,244$398,166$348,485$280,819$344,56623%

<300k

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales192422337163-52%
New Pendings191824318166-48%
New Listings203228332203-39%
Price/SF$138$220$176$151$17718%

$300k to $600k

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales2529299317184%
New Pendings32302012919047%
New Listings50282815422848%
Price/SF$324$323$330$239$32235%

>$600k

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales3743835-8%
New Pendings4434131-24%
New Listings82077369-5%
Price/SF$369$349$399$376$3801%

The combination of strong demand and limited supply has YTD condo prices up 23% and closed sales down 21%. Between April and July, more than half of all condo sales were on the market for 10 days or less—that dropped to 38% in August, due in large part to a drop in the number of new listings. Through the balance of the year, expect both sales and prices to fade. Declines will have more to do with limited and picked-over inventory than demand. Despite rising interest rates, demand for move-in-ready properties remains remarkably strong. The best new listings will continue to sell quickly and at or over-asking price. 29% of August sales were at or over asking price—the highest percent in the past year. Buyers want the best listings. Average and below average properties will sit and see price reductions before selling.

 

5-County Waterfront Summary

186

Available Homes
+9% from last year

323

YTD Closed Sales
-22% from last year

$887K

YTD Avg Sale Price
+14% from last year

$287M

YTD Closed Volume
-11% from last year

Monthly Activity

All

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales666065414323-22%
New Pendings646844449334-26%
New Listings1338990604567-6%
Price/SF$406$387$423$332$38917%
Avg Price$1,003,120$831,719$955,359$780,349$887,34714%

>$500k

JunJulAugYTD ’21YTD ’22YTD (+/-)
Close Sales212122164114-30%
New Pendings192316189126-33%
New Listings442928224187-17%
Price/SF$205$230$233$196$2118%

>$500k to $1m

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales232524159119-25%
New Pendings232811162112-31%
New Listings423625219177-19%
Price/SF$315$335$436$307$35114%

>$1m

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales2214199190-1%
New Pendings2217179896-2%
New Listings47243716120326%
Price/SF$555$562$504$465$52112%

With YTD sales down 22% compared to 2020 and 2021, Northern Michigan’s pandemic-inspired “waterfront gold rush” is settling as the market normalizes. Despite rising interest rates, there are plenty of buyers with cash in hand ready to jump on the best new listings as soon as they hit the market. Prime listings continue to sell quickly with over-asking prices while average and below average listings sit and require price reductions before selling. 42% of August new pendings sold in less than 10 days and 23% of August closed sales were at or over full asking price. Despite fewer sales, YTD average sale price is up 14%—12% for over-$1m properties. Looking ahead, sales will tail off and prices will fade—not so much due to declining values, but simply because available inventory will have proportionally fewer of the prime listings that buyers continue to wait for.

 

5-County Non-Waterfront Summary

382

Available Homes
-4% from last year

1,101

YTD Closed Sales
-12% from last year

$382K

YTD Avg Sale Price
+16% from last year

$420M

YTD Closed Volume
+2% from last year

Monthly Activity

All

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales1651801731,2551,101-12%
New Pendings1871561381,3431,099-18%
New Listings2922492441,6411,582-4%
Price/SF$210$194$215$177$20415%
Avg Price$380,238$359,133$389,515$328,666$381,61816%

<$350k

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales8510787818607-26%
New Pendings1159072912635-30%
New Listings1411311261,047825-21%
Price/SF$183$171$171$152$16811%

$350k to $750k

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales7368783974319%
New Pendings6460583854035%
New Listings129969549762325%
Price/SF$226$210$234$195$21611%

>$750k

JunJulAugYTD ’21YTD ’22YTD (+/-)
Closed Sales758406358%
New Pendings868466133%
New Listings2222239713438%
Price/SF$226$232$296$264$2795%

YTD sales are down 12% but with the help of a strong spring market, average sale price is up 16%. The non-waterfront market may be a little more sensitive to rising interest rates than the waterfront—both August new pendings and closed sales were off pace compared to both previous months and the same month last year. While the best new listings will continue to sell quickly and over asking, expect sales and prices to settle for the balance of the year as third and fourth quarter inventory quality becomes more picked-over. Higher interest rates will also impact buyer competition and demand as they erode affordability. Forty-three percent of August new pendings sold in less than 10 days but the frequency of at or over-asking prices has dropped to 18%.

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