A Sign of the Times...A Shrinking Parade Tour in 2008!

It's a spring time ritual in Grand Rapids, Mi. For residents like myself and many others who love to peek into gorgeous homes and pick up the latest tips for home decor and furnishings, the Spring Parade of Homes Tour is an event which is highly anticipated.

However, this year, the Parade of Homes will feature a tour with significantly fewer offerings than in recent years. In 2006, there were 200 homes featured in the Parade of Homes, last year (2007) the number was 133. This year, 83 homes will make their debuts in the Parade...far fewer entries than just 24 months ago.

New housing starts are one indicator of the health of the markets. So are the number of foreclosures and short sales. We have observed a leveling off in the number of foreclosures and short sales since numbers peaked at the end of 2007.

In fact, there has been a 5 month decline in the number of homes being sold by foreclosure and short sales as reported through statistics available from the Grand Rapids Association of Realtors. If this trend continues, it may indicate that we have hit rock bottom for price reductions overall in the Grand Rapids, Michigan area.

As inventory levels decline, there is an opportunity for the markets to level off and reach equilibrium. The number of homes available for sale in the past couple of years has been almost double the historical highs. This in addition to the dramatic rise in foreclosures and short sales has precipitated sale price decreases in the double digits in many areas of Grand Rapids. Fewer homes (existing or new homes) in the inventory pool should help to stabilize this trend.

Another trend which has been significant is the number of homes retailing between 0-$99,900. To date, this number is approximately 50% of the sales on the local board and mid-way through the year, almost 80% of the entire volume of sales in this price range in 2006. The sales in this price range have been impacted by the rise in foreclosures.

Another intriguing trend has been in the more expensive price ranges of homes retailing above $500,000 where the past two years have seen the number of sales actually hold steady. If the current trend continues, 2008 may be the first year that there is a decline in sales in the upper price ranges...but the spring and summer market is just beginning so it's really too early to make a prediction.

So, are home builders simply being more cautious? Well, perhaps in part. But, I think that in some ways, this may prove to be a somewhat positive indicator of the market recovery. It's interesting to note that more or less the same number of builders are participating in the Parade of Homes this year, BUT they are registering fewer models for the Parade. Hopefully, less inventory will remain unsold as buyers continue to take advantage of the great bargains available right now in the re-sale and new home inventory.

If you're looking for a great home and need assistance in accessing the latest new listings, contact us to find out how you can receive instant notification for homes on a daily basis!

The Parade of Homes Tour continues from May 21 ~ May 31. Information about the tour, prices and prizes can be obtained here... In addition, adult ticket holders qualify for a 50 cents per gallon discount on gas redemable at Meijer gas stations! (up to 10 gallons)

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