Ferndale Housing Prices on the Rise
Lack of inventory is driving certain Ferndale home prices toward peak 2006 levels, says local Realtor Derek Pratley.
Housing prices are on the rise in Ferndale, with many properties getting multiple offers and selling above asking price, according to two local Realtors.
The market in Ferndale is in line with a national trend of rising prices seen esspecially in Metro Detroit.
According to a report released Feb. 26 by the S&P/Case-Shiller Home Price Indices, Metro Detroit posted its biggest year-over-year increase in prices from 2011 to 2012. Area home prices went up 13.6 percent compared to the national average of 7.3 percent.
However, Detroit is still one of few metro areas where the average home prices remain below January 2000 levels, according to the new data.
Supply and demand
"We have a great illustration of market-driven economics in action right now in Ferndale," said Derek Pratley, a real estate agent with RE/MAX Complete in Pleasant Ridge.
The supply of homes available for sale has been reduced significantly, falling steadily for the last two years, according to Pratley. The number of bank- and government-owned homes being listed for sale has also gone down, he said.
"Most real estate professionals would agree there is a distinct shortfall of properties that are available to show in Ferndale at the moment," he said.
But with mortgage interest rates at or near historic lows, many buyers are being lured into the market.
"Buyers' confidence in the real estate market is being renewed as they see home prices rise literally month-on-month, therefore buyers are trying to get onto the property 'ladder' before the market runs away from them completely," he said.
Some areas of Ferndale have seen housing prices go up even beyond the average 13.6 percent jump, says local Realtor Robert Coburn.
"I don't know if we'll see another 13 percent for this year but I do think that it's going to be another up year and probably a substantial up year in values," Coburn said.
While prices aren't back to their peak values yet, there are "dramatically more buyers today than sellers," Coburn said, and the low inventory level is pushing prices up.
The good news for buyers is that more inventory should be on its way this spring - though there will still likely be more buyers than sellers, he said.
"I don't think we'll get a balanced market this spring," Coburn said. "It will be leaning toward a seller's market here for sure for the next six months."
Starter homes selling fast
Starter homes within walking distance to downtown Ferndale with a list price of less than $100,000 are in particularly high demand, especially three bedroom houses with a basement and/or a garage, Pratley said.
He said the number of listings less than $50,000 has reduced to a dozen or fewer, with many of them requiring significant updating.
The northwest side of Ferndale is also experiencing a significant amount of buyer demand, Pratley said, "with a distinct lack of such homes being available, driving prices toward their peak 2006 levels."
"Accurately priced homes that are coming to the market right now are frequently receiving multiple offers within days of being listed, often selling for over the list price," Pratley said. "In that respect, this could definitely be portrayed as a sellers' market."
Coburn said he just listed a house in Pleasant Ridge and within five days it had three offers, and he expects it will sell at or above asking price.
"We have seen multiple bids on the very nice houses - especially the ones that have either been recently renovated or well updated," Coburn said.
Renters are also seeing prices increase and a lack of inventory, according to Pratley, even during the winter season when there is usually a "lull" in the rental market.
"Frustrated renters may be re-considering their decision to lease a home, thinking instead about buying a home where the mortgage payment could potentially be significantly lower than a lease payment," Pratley said.
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