by Debbie Barnett, president and owner of Tomie Raines, Inc.
"Unit sales in greater Lansing were up 15.5 percent in 2012 and more units were sold than any year in the last seven. We have had three straight years of unit growth. Average prices were up by nearly 3.8 percent which was the highest since 2007, however the average was almost 31 percent lower than 2006. The absorption rate, which is a measurement of the current housing supply divided by the current rate of sales expressed in months of supply, dropped to 4.9 months which was the first finish below six months in many years. Demand is beginning to exceed supply in many price categories.
"So what is the solution for this inventory shortage?
"Home owners who have a need for more space, a better neighborhood, or a better quality home need to understand that selling their current home for less than their desired price will be more than offset by the discounted price on the home they will be moving up to. They can take advantage of the current high demand by first time buyers and investors and move to a home where the price is more attractive to a small buyer pool. Before mortgage rates rise, move up buyers can lock in an attractive rate on a higher priced home and reduce the cost of home ownership for years. This category of seller is expected to be more than 75 percent of residential sales this year.
"Home owners who are candidates for a short sale need to act while mortgage forgiveness remains non-taxable for the rest of 2013. Even though such a transaction will result in a blemish on their credit, by acting now they may be able to re-enter the home buying market in as little as two years.
"I think 2013 is going to be a good year for sales of residential real estate and if the demand and the supply of inventory align, it could be a great year. Regardless, whether you are a buyer or seller, now may be the time to make your move and take advantage of the market movement. Consulting with a professional REALTOR® with a thorough understanding of the market dynamics should be the first step."
