On the heels of Weir Manuel Realtors projecting that our market will be at its peak affordability for the next several months, the Wall Street Journal reported last week that the housing crisis is over.
While the Weir Manuel Realtors projection is based on local housing price trends and mortgage rate forecasts, the WSJ article speaks more to the national housing crisis. Their projections are based on the premise that houses are now more affordable than ever. The pent up demand, along with low prices and low interest rates will begin to drive sales and continue to lower inventories.
The article goes on to state that, “…the housing market is bottoming right now,” and “…the trend is no longer getting worse…” The article also includes a reality check that prices will probably not return to their prior record levels for another 15 years.
The bottom line for sellers is that they will need to continue to price their homes aggressively to get them sold. For buyers, the best advice is to act now while inventories are still high and interest rates remain low. That trend will begin to reverse sometime later this year. The opportunities and affordability are greatest right now.
Legislatively, the State of Michigan has also pledged its support to the housing market by passing recent legislation allowing a purchaser to retain their principal residence exemption on their existing home, if not yet sold, while also claiming another principal residence exemption on their new principal residence in Michigan. The exemption on the home not yet sold can remain until sold or a period of three years, whichever comes first.
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