BIRMINGHAM — The Birmingham-Bloomfield Chamber of Commerce hosted a real estate forecast Feb. 16 to share with local leaders, as well as members of the business and real estate communities, the state of the market in Oakland County.
Following a breakfast, chamber President Joe Bauman welcomed everyone to the event, thanked the breakfast’s sponsors and introduced the two speakers.
Dan Elsea, of Real Estate One, gave the first presentation, which focused on the housing market.
“The market was pretty good this year,” remarked Elsea. “It looked much the same in 2016 as it did in 2017. Coming out of the recession was like the water going back down after a dam breaks. The market has settled down a little. But housing responds to the economy — it doesn’t lead it — because people buy homes when they have jobs and are financially secure.”
He said that despite an improving housing market, some challenges remain.
“Right now people are staying put, and baby boomers are living in the same places longer,” said Elsea. “New construction has been too slow for demand. We expect fewer home purchases in 2018; it’s not that there’s a reduction in demand but that there’s a lack of supply. Student debt also is still a big issue when you’re looking at the whole picture of who is buying houses and applying for mortgages.”
Yet as the market continues to move out of the 2008 recession, there is once more a healthy demand for homes, which is driving the market in a positive direction.
“Inflation is getting better. The levels of employment and jobs — which drive home buying — are improving, and millennials are starting to buy houses,” he added. “Home appreciation rates improved greatly, and the change in price over 2016 improved marginally.”
He advised homebuyers to be patient in their search for the right home, but to act fast when they find it. He said the market still allows for overbidding on a prospective home. He told sellers that housing markets are moving at different speeds depending on the condition and price range of the house in question.
“Demographics show there will be good home demand over the next 10 to 15 years based on how millennials and younger people are buying or are predicted to buy,” said Elsea. “Ninety percent of homes are selling right now within 90 days.”
The second speaker, Paul Debono, the vice president of NAI Farbman, talked about what market research and analysis are showing on nonresidential properties.
He stated that industrial vacancy rates in southeast Michigan have decreased, and rental rates are seeing steady growth, as are office occupancy rates. He said a changing trend is that businesses are tending to need less office space, as there are more employees working remotely. He added that retail space is much harder to predict and has proved far more volatile in the Detroit area.
“We’re seeing a lot of tremendous growth in downtown Detroit in retail and industrial properties, and that’s driving growth in the (southeast Michigan) region,” said Debono. “I think 2018 will be a great year, and we will watch continued growth.”
Many attending the event said they enjoyed the presentation and that it gave them a lot to think about.
“It was very informative on the state of both the residential and commercial markets,” said Ingrid Tighe, the executive director of the Birmingham Shopping District, who attended the event. “It was great information on what seems to be a currently successful market. … I would tell people (based on the presentations) that when making business decisions to reach out to those in the real estate business so they can make a sound decision.”