Thursday, March 16, 2017 / by Paul Wolfert
What time is it?
Time to move! Maybe.
The timing for when to buy or sell a home in Michigan can be a decision that pretty much makes itself.
Sometimes family demands call for a move to larger or smaller pad; sometimes a change in career demands or a schooling decision requires a residential switcheroo.
But there are other times when an eventual move is in the cards—but timing is flexible.
That’s a situation where the whole decision can sometimes be based on guesses about the future of Michigan home prices.
This is when people ask me “how much do you think that house will cost next year?” or "Do you think my house will go up/down in value?"
Nobody likes to be taken by surprise—especially if the surprises were predictable.
As we venture into the peak real estate selling season here in Michigan, it would be nice to know the direction home prices are headed.
Right now, it looks as if mortgage interest rates are heading upwards...so... will that make selling more difficult?
Maybe. Maybe not.
If you’re hunting for a truly well-educated guess, it’s hard to argue with the Nobel Prize Committee. Fortunately for us, they named someone in the real estate economics field worthy of their international seal of approval (and a chunk of the prize money).
That’s Robert Shiller. He’s the Yale Econ professor who accurately predicted both the dot-com and housing bubbles and who co-authors the Case-Shiller Index.
Bonus points for you If you know what the Case-Shiller Index is! (I don’t)
One logical concern for Michigan homeowners might be whether rising mortgage interest rates are likely to soften home prices this spring.
The Wall Street Journal gave us a reassuring answer: “U.S. Housing Market Roars into 2017, Case-Shiller Says.” They also go on to say, “Home prices shrug off higher interest rates.”
That “shrugging” they’re referring to is based some info that shows the fastest growth in home prices since 2013—even with higher rates.
That might not be as good as Prof. Shiller’s personal guarantee that the recent interest rate rise won’t slow down Michigan home sales—but it does look like we saw something similar to this back in ‘83.
Back then, a 2.04% hike in mortgage rates actually boosted real estate values by 6.6%.
And then in ‘87, it happened again!
Between April 1999 and May 2000, rates went up 1.6% and can you guess what happened to home values? They shot up 11%! That’s crazy!
Michigan home prices probably won’t go bananas like they did in ‘99—and that’s alright.
The national consensus for 2017 is for moderate gains in the 4%-6% range. I’ll take 4-6% over losing money any day! (you can use my free tool to check your current home value by clicking HERE.)
But for those of you out there holding back from selling because your afraid buyers will shy
In fact, with a little imagination, you can almost hear the sound of the Journal’s housing market “roar” approaching.
If so, I hope you call or text me soon!
Paul V. Wolfert
Century 21 Masters Club (Multi-Million Dollar Producer) 2014,2015,2016
Quality Service Pinnacle & Presidents Award Holder
HOUR Magazine Real Estate All-Star (Top 5% of agents)
Century 21 Row
37172 Six Mile Livonia, MI 48152C: 734-743-1482 O: 734-793-1245 F: 734-464-8713