Home prices in Michigan have increased a full 11.3 percent in April as compared to last year. Nevertheless, according to statistics related to purchases and sales of real estate, price gains have been slowing this year and sales may be faltering. Indeed, the 11.3 percent increase is the lowest annual gain to be reported in the last 14 months.
The increase in residential real estate prices in Michigan represented the fifth highest rise in the nation. California showed a 15.6 percent rise and Nevada a 14.8 percent rise. Hawaii’s increase was 14.1 percent and Oregon’s was 11.8 percent.
Residential real estate’s slowed recovery is largely blamed on tight credit, limited supply of homes for sale and higher mortgage rates. Across the nation, home prices remain approximately 14.3 percent lower than the peak in 2006, which was the biggest the bubble got before it popped. Economists predict that sales will continue to be sluggish throughout the remainder of 2014 and annual price gains will only be about 5 percent or 6 percent.
Prior to making purchases and sales of Michigan real estate, it is important to research recent sales of similar real estate in the area. Indeed, whether it is commercial real estate or residential property, the more informed one is about pricing trends, the less likely there will be regrets over a purchase or sale later on down the road. Buyers and sellers of real property may also want to closely investigate all of the potential legal consequences (both now and in the future) that could develop after making the transaction — legal issues such as the potential for boundary disputes, zoning, the potential for getting zoning rules changed.
Source: Detroit Free Press, “Michigan home prices rise 11.3% in April as U.S. gains slow” No author given, Jun. 03, 2014