BY KIMBERLY PONTIUS Traverse Area Association of Realtors
Traverse City Record-Eagle
---- — TRAVERSE CITY — For the last two years the collective housing market for the Grand Traverse region has been very good.
All five counties, Antrim, Benzie, Grand Traverse, Kalkaska and Leelanau have posted significant improvement. This improvement has not only been through the absorption of inventory, including foreclosure and short sale properties, but also the return of housing stock value.
Since January of 2012 the region has experienced historic double-digit sales volume increases and that double-digit performance — which set a new record sales level for the region at the end of 2012 — continued into 2013. Current projections indicate that 2013 shall be on par or perhaps a bit ahead of the 2012 record.
All of the contributing factors that have powered this market will likely continue into the first quarter of 2014. However, performance models show a bit of a cooling off period here in the last quarter of 2013. This activity is consistent with some of the national trends and could be tied to several indicators prevalent to all real estate markets.
Some reasons for the postponement by consumers considering the purchase of a home are the availability of credit, interest rate upward creep and inventory limitations. However several noted economists that are watching the industry are saying that inventory shortage issues began abating back in April of 2013, interest rates are still low but will likely not go lower, and banks are beginning to relax the credit markets.
These trends are fairly consistent within the Grand Traverse market area and will likely help fuel a stabilizing housing market as the region begins the 2014 cycle.
Activities that will impact the market are many but when interviewed many regional brokers echo the fact that the region’s housing market has leveled off just a bit allowing for pricing and inventory to stabilize.
While the GDP for the nation remains flat so too does inflation and while the economy is stagnate, consumer confidence continues to increase. Any investment in the region in the form of new jobs coming into the region or expansion of current business entities could tip the scale and regional real estate sales and pricing could escalate.
Any expanded influx of Baby Boomer retirees -- which have significantly fueled the local housing market for the last few years -- may also have an upward spiraling effect as they will further diminish inventories and, in a true supply and demand character, positively impact pricing of new and existing homes.
As we enter the next year, the supply of new housing starts continues to climb, which is good news for homebuilders. Many of these builders are complaining though that there is a lack of skilled workers available in the region to do the work that is currently on the books. So, attracting new skilled workforce for the building industry will bring good-paying jobs but housing stocks and REALTORS® may be challenged in meeting the demand if even a few hundred construction jobs appear in the near term.
Then there is the issue of rental properties. Any real estate professional will tell you that they are few and far between. Many get rented well before they can be listed and new rental inventory is slow coming to the regional marketplace, as commercial development is also slow due to the risk adverse position of the credit markets, though some lenders are starting to ease this condition.
Overall, the housing market is a prime economic development engine for the regional economy right behind agriculture and just ahead of healthcare and manufacturing. The current conditions indicate that this will be the case for at least the next few years even if the economy stays flat.
If the economy grows?
Well, then REALTORS® and builders, both residential and commercial, are going to be busy.