Metro Detroit real estate: More inventory for buyers, sellers unwilling to drop prices

House hunters aren't finding many deals on price this spring in metro Detroit's housing market, but they are finally getting more listings to choose from.

Even with mortgage rates around 7% and making affordability a challenge, home sale prices continue to go up — and are even significantly higher in some instances than when rates were at historic lows under 3% just a few years ago.

Yet there is some good news for would-be buyers: a modest uptick in for-sale homes this spring compared with last year, according to recent data and interviews with real estate insiders.

“We are starting to see a little loosening of inventory," Jeanette Schneider, president of RE/MAX of Southeastern Michigan, said. "It’s welcome, but not enough to solve the demand that’s in the market.”

Indeed, agents report there is still not enough housing inventory in metro Detroit to satisfy demand from would-be homebuyers, and this mismatch is a key reason why many sellers haven't lowered their asking prices as mortgage rates went up and stayed up.

The median sale price in April for houses and condos in metro Detroit was $265,000, up about 9% from April 2023, according to the Realcomp multiple-listing service, which defines the region as Oakland, Wayne, Macomb and Livingston counties.

The number of for-sale listings was up 1% year-over-year and total sales last month were 6% higher than in April 2023. (The Realcomp figures do not include private sales.)

A leading nationwide measure for housing prices, the S&P CoreLogic Case-Shiller home price index, also shows metro Detroit prices at their highest-ever levels.

The Case-Shiller index found metro Detroit home prices surpassing their pre-Great Recession peak back in spring/summer 2019; as of this February, prices were 41% above that pre-Great Recession peak.

Modest inventory bump

One reason why listings are up this spring is that some sellers who had been waiting for mortgage rates to drop — and perhaps boost the sale price — finally decided to stop waiting and list their house, agents said.

Realtor Jason Matt of eXp Realty in Novi said housing inventory "got crushed" once mortgage rates started climbing. This spring, he has seen listings from multiple homeowners who, a year ago, weren't looking to sell because of the mortgage rate environment, but who have now made peace with today's higher rates and realize they can still get a good price.

There has been a similar change in mentality among would-be buyers who had been waiting on the sidelines in hope that rates would drop.

“They realize now that this (higher mortgage rates) is normal life and it’s like, 'Do I want to stay in a home that I don't necessarily love, or do we just make a move where we’re going to have a higher payment, but we’ll be in home where we can see ourselves grow and have a family,' ” Matt said.

Matt also noted how although today's mortgage rates are high compared with the recent pandemic years as well as the post-Great Recession years, they are nevertheless in line with the rates of the early 2000s and the 1990s.

"Back in the day if you had a 6% to 7% interest rate, you’d be jumping up and down — and this is what we have now," Matt said.

Multiple offers still happening

With for-sale inventory still relatively low, agents say that some sellers are getting multiple offers that bid up the sales price.

Matt, of eXp Realty, said six of the last eight houses that he sold had multiple offers, typically two to four offers.

While that's down from the turbocharged pandemic-era 2020 and 2021 period in metro Detroit housing, when desirable houses could attract double-digit offers within hours of hitting the market, it shows how sellers still have the upper hand.

"By far it’s still a seller's market," Matt said. "But I would say it's not as extreme a seller’s market."

Agent Abe Taleb, of RE/MAX Leading Edge in Dearborn Heights, has seen bidding wars this spring for houses in the entry-level price range as well as the higher-end range, where multiple offers are less common.

“We are seeing a little more inventory," Taleb said, "but if it’s a desirable property, the demand is still extremely high.”

For example, a three-bedroom ranch house in Garden City hit the market this month at $130,000 and quickly sold for $180,000 cash after fielding multiple offers, Taleb said. (The sale was still pending at publication time.)

And in Dearborn Heights, a two-story, four-bedroom brick house that sold for $500,000 in February 2023 sold again last month for just under $700,000. Taleb said the house didn't undergo any extensive renovations during that time, although the seller did spruce it up a bit.

At the higher end of the market, a large four-bedroom house in Northville Township went on the market for $1.1 million this past March. After receiving multiple offers, the house ultimately sold for $1.25 million.

"People are adjusting to these interest rates and they are paying a premium for the property," Taleb said. "Prices from the 2021, 2022 boom have held — they did not go down.”

More: Rare development in Detroit of new single-family houses now underway

Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on X @jcreindl.

This article originally appeared on Detroit Free Press: Metro Detroit real estate: What sellers, buyers are finding right now