IF YOU’RE INTO THAT SORT OF THING.
It’s been a couple of months since things slowed to something closer to normal, so now that the dust has started to settle, we thought this might be an excellent time to explore WTF just happened. And by “just happened” we mean the whirlwind that was the past 18 months or so.
Unfortunately, our staff was only able to provide us with Lions and Tigers stats, which are more depressing than current interest rate insights, so we purged the vault from our friends at John Burns Consulting and plucked out some interesting data notes.
For starters, from December 2019 to June 2022 home prices in Metro Detroit increased by 35%; comparatively, during the pre-Great Recession bubble from June 2003 to December 2005, local prices increased, by just 2% – though at the time, it seemed like they soared so much more. Granted, back then our prices climbed and crashed sooner than the rest of the country, but even if we extend that period, our increases still remained under 5%. This time around it certainly felt different/more significant and the proof is in the numbers.
As for construction, we’ve spent a lot of time trying to convince people that skyrocketing price increases have had less to do with profit and more to do with costs; the chart above proves us right. Builders might have been advantageous, but they weren’t necessarily greedy.
Looking forward, building material dealers are projecting minimal price increases for 2023 – most under 8% or less, with (framing) lumber actually decreasing. Couple that with shipping container costs dropping from $19,000 last year to $3,900 this year (according to the WSJ), means both prices and timing should continue to moderate.
That leaves interest rates as the biggest wild card in the process – and the stats from the past 6 months aren’t pretty, with rates soaring to levels we haven’t seen in decades. The outlook for 2023 is mixed; local mortgage brokers are predicting rates will rise further, while national firms like Morningstar are predicting cuts; Fannie Mae has changed their predictions monthly.
If rates level off or drop, and builders continue to offer incentives toward rate buy-downs, etc., 2023 could be the most “normal” year we’ve seen in a while. Because let’s be honest; a 3.99% (or even a 4.99% rate) tied to a builder incentive, which is what we’re seeing from builders right now, is WAY closer to “normal” than the sub-3% rates we saw earlier this year. However, if rates continue to rise, things could get a little 2008-ish for the building industry…
TIme will tell. If you have questions about the stats (building, Lions, Tigers, or otherwise), the home building process, or anything new home construction-related, we can help – let’s chat.
(pictured above: stats, baby…)
OUR NEW CONSTRUCTION COLLECTION
LOT #15 | WHISPERING RIDGE ESTATES
The foundation is in, and progress is being made on this BRAND NEW/NEVER-BEEN-BUILT ranch floor plan by Strathdale Development. Featuring 3 bed/2.5 bath/2,450 sqft, a 3-car garage, and a ton of high-end finishes, we are excited to see this home take shape.
Located near Benstein & Glengary in Commerce, Whispering Ridge Estates is located in a particular section of the township that might be the only one which doesn’t require navigating 2-lane roads while winding around every lake in Oakland County, resulting in commute times that range from 30 min to the Donner Party. Yay! Connect with us for the details!
320 CREEDMORE | COMMERCE
Featuring significant frontage along the Huron River as it flows into North Commerce Lake (and then South Commerce Lake – because geography), this amazing location offers a private beach club and access to all directions of Commerce Lake.
Roughly 30 days from completion, this new contemporary-colonial floor plan by Kensington Family Homes features 4 bed/2.5 bath and nearly 2,500 sqft, with an attached 2-car garage. High-end finishes abound, as well as plenty of natural light and spectacular views.
And of course, desirable Walled Lake Schools.
43145 W. 13 MILE | NOVI
Don’t let the address fool you; this relaxed section of 13 Mile crawls to a 25 mph roll, as passersby take in the spectacular views of Walled Lake, located across the street. Yes, this lot offers literal “lakefront” living with Walled Lake in front of your home.
Built by Kensington Family Homes, this Kendall floor plan features 4 bedrooms, 2.5 baths, a home office, and 2-car side entry garage, along with all the high-end finishes you’ve come to expect from Kensington.
This home is also situated on the same block as the new Robertson Brothers neighborhood Lakeview, so your new home will be part of the amazing transformation of this otherwise existing neighborhood.
And of course, you get award-winning/awe-inspiring/otherworldy/all-the-things Novi Schools. This home is currently framed and will eventually look like the one pictured above; completion is anticipated for late winter/early spring.
OUR NOT NEW BUT NEW TO YOU COLLECTION
All of our current re-sale listings are under contract – YAY!
IN OTHER REAL ESTATE NEWS…
DEVONSHIRE | NORTHVILLE/LYON TWP
Pre-sale appointments have begun, for the highly anticipated Devonshireneighborhood by Pulte Homes in Lyon Township (but featuring Northville Schools). Despite a cool-down in the market, with waitlists and bidding wars now becoming a thing of the past, demand has remained high for this neighborhood. Located north of 8 Mile Road, on the west side of Napier, coupled with a price point starting in the $620s, it’s the perfect west-side formula for success. With brisk sales to date at neighboring Windridge by Lombardo Homes, which starts in the upper $660s, and everything else with Northville Schools starting north of $800K, we expect Devonshire to sell quickly… [read more]
TARGET | MIDTOWN
Construction for the midtown Target store is inching closer to reality, with groundbreaking expected in December pending the approval of a brownfield reimbursement for the $103M project. Located on the now vacant parcel at the southeast corner of Woodward and Mack Ave (across from Whole Foods), the development will consist of a small-footprint Target store (roughly 30,000 sqft) and multiple residential buildings, including a 16-story tower. If all goes as planned (lol can we even say that anymore), construction should be completed in late 2024… [read more]
BUILDERS: DON’T JUST LIST YOUR HOMES…
GET THEM IN FRONT OF THE RIGHT BUYERS!
Our website caters exclusively to new-home-specific buyers, so in addition to the usual audiences found on the MLS, Zillow, etc., we also bring you local buyers searching specifically for new homes, by creating original, organic content, and pairing it with a social media strategy that guides prospects directly to your listing; and we do it for less than what resale agents charge.
Get in touch to find out how we can sell your homes AND save you money in the process.
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Join us. We are growing our national network of New Home Experts® agents across the United States and beyond.
If you are a builders sales rep looking for something different, or an agent/broker with a masterful level of experience selling or building new construction homes in your local market, we want to talk.
Set your business apart from competitors by focusing on this lucrative real estate sector; a sector that most other agents are either afraid of, intimidated by, or both.
Interested? Let’s chat about the life of an “expert” and if it’s the right path for your career.
Questions about your new home search? Call or email us today – we look forward to hearing from you! Not ready for that kind of commitment? Check out our new-home-specific-search and email us incognito. Use a name like Carrie Oakie. We’ll never know it’s you…
Lou Bitove & Jeff Bortnick, owners of The New Home Experts®, have more than 35 years combined experience in real estate, much of that with builders like Pulte & Toll Brothers. They also provide market research for area builders, developers and national firms. If you’re considering a new home, remember: the builders rep represents the builder, not you. Work with the only local agents in Metro Detroit to specialize in new homes, and save money in the process – ask us how!