The spring rush is in full bloom with the market looking very much like last spring, only slightly less hectic. All indicators in May show a strong market as prices are up (7%), new contracts written are up (15%), the number of homes for sale is up slightly (2%) and new listings entering the market are up (4%). As sellers are noticing the strength of the market, they are responding by listing their homes. The market momentum does vary by lower, medium and upper priced categories and although they differ in strength, the lower priced markets are moving faster than upper-end markets. The trends with each price range are constant, regardless of geography (we use price segments of $0-250k, $250-500k and over $500k as a general representation of the overall metro area).

About 33% of all homes sales are selling for at or above list price, down from 39% last year. Homes that are selling in 10 days or less held steady compared to last year at 35%. This May, 59% of homes sold in 30 days or less. The upper-end market (over $500,000) as expected was a bit slower with 27% of homes selling at or above list and 22% selling in 10 days or less.

We are hearing from our sales team across all markets that the upper-end price range, particularly over $1,000,000 is slowing as the inventory rises faster than demand, with prices remaining flat. Year-to-date, there have been more sales in the $1,000,000 plus category (85 vs. 74 units in Southeast Michigan) but the pace has slowed the last 60 days.

For sellers, there is no better time to put your home on the market. Buyers need a combination of

patience and quick reaction to work through competing offers.

Last month we mentioned the regulatory changes affecting mortgage applications beginning in August. These changes are, for the most part, a benefit to borrowers. However, as the industry gets accustomed to the changes, it is likely to take longer for a mortgage approval and a transaction to close. 

For loan applications taken after August 1^st, 2015:

•             Lenders must provide a Loan Estimate to the borrower within 3 days of the borrower providing key information to the lender.

•             Many lenders will not order an appraisal until the buyer formally accepts their Loan Estimate, which may extend the approval time frame.

•             Buyers must receive their Closing Disclosure 3 days prior to the closing. Certain last minute changes after the borrower has received the Closing Disclosure (such as a significant change in interest rate) will restart the 3-day period.

•             Most smaller last minute changes in the closing documents, while not triggering an additional 3 days, will require at least 1-2 days to rework through the lender’s system.

•             Overall lenders recommend that buyers and sellers should plan for the loan approval process to be 40+ days.

•             Once the loan is approved, lenders suggest allotting at least 10 additional days for the final closing date. 

•             Buyers should avoid setting their move-in the day of closing, most lenders are recommending allowing 10 days after closing to cover any last minute changes.

•             Sellers should be careful setting up “back to back” closings (closing on their old home and new home on the same day) in case the first closing has a last minute delay.

•             Sellers should be wary of purchase offers that have unrealistically fast loan approval and closing dates compared to other offers. All lenders are under the same rules. 

•             It will be more important than ever to plan some flexibility into the choreography of the closing and moving process.

  For our company bragging rights, May sales topped the record we set in April, with $538 million in new sales contracts, again the highest ever recorded in Michigan for a single brokerage company.

Congratulations to all of you for successfully serving a record number of happy customers!