Longer time on market for homes shows cooling real estate market

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In the spring of 2021, as the COVID-19 pandemic fueled a buying spree, nearly three-quarters of homes placed on the market in Southeast Michigan were sold within two weeks.

Those days are over.

Data from Seattle-based real estate brokerage Redfin and elsewhere shows that the time homes are sitting on the market around metro Detroit — and the rest of the country — has been steadily increasing. It’s yet another sign of a cooling real estate market.

While acknowledging that the length of time a typical home sits on the market is up significantly from the highs of mid-2021 and into last year, the situation is far from dire, according to metro Detroit real estate agents.

Updated homes with newer flooring and countertops, as well updated plumbing, fixtures and other infrastructure do get snatched up quickly by buyers who tend to be impervious to the higher interest rate environment, agents told Crain’s.

“Move-in ready homes can go quick,” said Gino Tozzi, a Clinton Township-based associate broker with Real Estate One, noting that at the height of the market in 2021, the condition of a home didn’t matter much.

That’s no longer the case, Tozzi said.

Still, multiple recent reports show the vast difference of the present, calmer market compared with the frenzy of mid-2021, a time when rock-bottom interest rates served as catalyst for a frantic residential real estate market in metro Detroit and around the country:

  • Looking back to late February 2020, just before the pandemic took hold, nearly 60 percent of homes for sale in metro Detroit were off the market in two weeks.
  • In the spring of 2021, at the peak of the home-buying bonanza, more than 70 percent of pending home sales in the region were off the market within two weeks.
  • In the final week of 2022, about 33 percent of pending home sales in metro Detroit were off the market within two weeks, a decline of about 7.4 percent year-over-year, according Redfin data.

The market experience during spring 2021 was unique, Tozzi noted, and unlikely to be experienced again in the foreseeable future.

Also ticking up is the overall number of days from when a home is listed to having a signed contract. The most recent market reports from Farmington Hills-based RealComp and RE/MAX of Southeastern Michigan show that average days on market in November were at 33 and 34, respectively, up about five days from the same time last year.