Home sales in the Detroit metropolitan area took a deep dive in August, as higher prices hit affordability hard.
Combined sales of single-family homes and condominiums fell more than 8 percent from a year ago, while the median price jumped nearly 15 percent according to Realcomp, a Realtor-owned real estate data company.
"For the last two years, we saw it was a very good time for a seller to sell. Buyers were buying," said Jenilynn Estereicher, a real estate agent with Century 21 Town & Country. "We are now leveling out from that, and we could see some pricing go down in the winter."
Estereicher sells in the Detroit suburbs, specifically Oakland Township, where there are more newly built homes coming to the market. Like the rest of the country, inventory has been tight but is starting to improve. Inventory in the entire metro Detroit area was up 17 percent in August, compared with a year ago. New construction is expected to hit its highest level since 2007.
Many of the newly built homes, however, are at very high price points. While interest rates are still attractive, prices continue to be a thorn in the side of sales.
"We're seeing more inventory and less buyers. People are just waiting to see what's going to come on the market. Prices got so high that buyers got nervous about overpaying again," said Estereicher.
Detroit's economy, while improving, is still not as strong as its housing market might like. Estereicher sees fewer people relocating to the area, which is contributing to weakening demand.