Paul Mruk of RE/MAX Classic in Novi has dozens of examples where homes are selling above asking price in just about any Detroit metro community. In February, a three-bedroom, 3,000-square-foot home in Farmington Hills listed for $475,000 had 94 showings during its opening weekend and received 22 offers to buy. Mruk’s buyer offered $515,000 in cash, and it was accepted.
“Buyers are hardened,” Mruk said. “The challenge right now is that if you don’t waive the assessment, if you don’t give an inspection clause and if you don’t give free occupancy, then you won’t get these houses.”
Home tours are jumping with 15-minute screenings to accommodate the large number of shoppers in hot cities like Royal Oak, Novi, Dearborn and Livonia. Homes that appeal to first-time buyers between $150,000 and $400,000 have kitchen islands stacked with dozens of business cards from passing agents. Brokers advise their clients to present their best offer on the first try or be passed over by someone willing to offer more than the asking price on what is usually an entry-level home.
Many estate agents said they believe their workload will continue at excessive speed over the next six to nine months, a change from the start of 2020 when a global health crisis due to the coronavirus led to mandatory real estate breaks. In the spring of 2020, Governor Gretchen Whitmer had deemed real estate “non-essential” from March 23 to May 7, resulting in less than optimal Zoom projections and limited sales.
Buyers who resisted last spring entered the market during the fall and winter to encounter a tougher-than-usual seller’s market. As a result, there are more people hungry for a home still looking, agents said, hitting a market with a reduced inventory of available homes.
“The minute the (Michigan) restrictions were lifted, things got crazy and stayed that way,” said Karen Kage, CEO of Farmington-based Realcomp LTD, the nation’s largest multiple listings service. ‘State.
Realcomp said in its February report that days on the market — or the time a home goes from listing to selling — fell 34% to 44 days on average, from 67 days during the same period. period in 2020. Visits per individual home also doubled from 8.5 to 15.3, its report showed.
It’s the same in Detroit. Austin Black II, head of Detroit-based brokerage firm City Living Detroit, lives in Sherwood Forest, where there isn’t a single home for sale out of approximately 435 homes. The University District, south of his home, has about 1,400 homes with only two on the market.
“I’ve never seen that in these neighborhoods,” Black said. “Usually in a winter market you’ll see less listings, but nothing like what we’re seeing right now.”
The homes Black has on the market are selling fast. A three-bedroom, 1,839-square-foot home in Colonial Victorian Park near Detroit’s Jefferson Chalmers neighborhood, black-listed for $250,000, was on the market for five days and sold for $265,000 with a fence in January.
Black said one reason for the buying frenzy is that many white-collar workers never lost their jobs due to the coronavirus-related economic downturn. They also inflated their savings by staying home and not eating out as much. Additionally, with large corporations such as Ford Motor Co. keeping many employees home to work, people in metro Detroit are thinking differently about how and where they want to live, Black said.
This was true for William Kelly and Meryl Ethridge, both 30 years old. The couple wanted more space with Kelly working from home in sales and Ethridge’s flex schedule as a surgical resident at Ascension St. John’s Hospital. Also, a noisy neighbor in their Brush Park apartment furthered their house search. They began searching in October and in February closed a 2,100-square-foot, three-bedroom home in Detroit’s LaSalle Gardens neighborhood.
Kelly and Ethridge saw a dozen homes in Corktown and other areas before finding their 1916 charmer with a large lot and tall windows. Attracted by its renovated interior, they made a low offer and were rejected. After some back and forth on the original asking price of $339,000, they settled at a price only for the valuation to come back lower. Further negotiations with the buyer resulted in a final sale at $308,000, with the seller making up the difference.
“We were told the inventory was low in our price range, which was a $200,000 to $400,000 starter home. We had friends looking in Grosse Pointe but they told us it was ruthless. They were going to bid on a house and find there were already five cash offers. We wouldn’t have ended up buying if we were in that scenario,” Kelly said.