COMMUNITY — With interest rates still hovering at a record low, the residential housing market continues to favor sellers over buyers.
Dave Abdallah, a realtor in the community for more than 30 years, said there’s very little room for profit.
“Prices are up, it’s a seller’s market right now,” he said. “Sellers are getting top dollar for their homes and buyers are almost overpaying in some scenarios.”
In January of 2019 in Dearborn, the average home was valued at $129 per square foot. In January of 2021, that price went up to $169 per square foot.
Similarly, in Dearborn Heights in January 2019, the value was $120 per square foot and as of last month, the price is now $160 per square foot.
Abdallah said this means that the average home is costing almost $70,000 more than it normally would in a standard market condition.
“There used to be about 300 houses for sale at any given time,” he said. “That’s just not happening right now. Houses are flying off the market because of the interest rates still being so low, but also less people are putting their houses up for sale due to COVID concerns with having strangers in and out of the home or going into a stranger’s home.”
While some may believe that a certain season of the year is better for selling, Abdallah said it’s about equal.
“Many people think moving in the summertime is better, but there is more competition when you’re selling a home,” he said. “In the winter, there’s less to buy but also less competition, so really, there isn’t necessarily an ideal season for moving.”
As the interest rates have been staggeringly low for months, Abdallah said once the rates go back up, many people may still struggle to decide to buy or sell.
Sellers are getting top dollar for their homes and buyers are almost overpaying in some scenarios — Dave Abdallah
“When the rates go back up, some people may think of waiting for the rates to come back down,” he said. “But chances are the rates won’t be this low again once they go up.”
To get more bang for your buck, Abdallah suggests not making any major investments to the home.
“The cheapest investments that will get the best return are as simple as painting, carpeting and landscaping,” he said. “A bathroom or kitchen remodel are also good investments to make sure your home is up to date. I don’t usually recommend getting a full addition unless you plan on staying in the home, maybe the addition of a family room, but not a full story. Another good opportunity for investment are flip properties, but with the market the way it is, those are harder to come by.”
While the residential market is doing well, the commercial market is at a slowdown due to COVID.
“With businesses not doing very well or having to shut down or not wanting to do a grand opening, commercial real estate is at a very slow pace,” Abdallah said. “The interest rates are still low, but not as low. It usually takes the commercial market six to eight months to catch up to the residential market.”