DETROIT (WXYZ) — For Jason Justice, looking at property has become like a hobby.
"I have several properties now and I’m constantly looking for more properties," said Justice.
Justice spent Thursday morning with a realtor, looking at a home on the city's westside to add to his portfolio. He says for him, buying homes is about setting his kids up for success.
"Although you may not always make a ton of money on the investment, it’s more so for generational wealth, my kids, it’ll be paid for them and their kids," said Justice.
Justice says in the last few years, finding the right home at the right price has posed more of a challenge.
"Right now with the market like it is, you can offer a little bit less than asking. Several months ago you were paying over asking price," said Justice.
According to Norada Real Estate Investments, home values in Michigan have risen by about 32% in the last two years. While the organization predicts Detroit home values will continue rising by another 2% through July 2023, real estate experts say things are leveling off.
"Not too long ago, we’re talking eight months ago to a year ago, we’d put a house on the market and it would sell in 10 days and I would receive maybe five offers," said Gaston Munoz with Munoz Realty.
Munoz says just months ago the average home was selling tens of thousands dollars over asking price as well. However Gaston says low inventory is driving up home prices and higher interest rates significantly slowed things down in the last few months.
'I think now it’s changing to a buyers market," said Munoz.
Associate Broker Kyle Swink with Max Broock Realtors in Detroit says in his 12 years in the industry he's seen some turmoil following the recession and market crash of 2008 but the market volatility during the pandemic was unprecedented.
"Ultimately what we’re seeing right now is houses move and product move. It’s just at a little slower pace and it’s not as competitive," said Swink as he sat in a condo listing in the Milwaukee Junction neighborhood located east of Detroit's New Center.
Swink says right now the market is still running on a lower inventory with a one month supply of homes available. He says normally there's about a six month supply.
Swink says he predicts the market becoming even more stable into next year but interest rates may still pose a challenge to some buyers.
"The interest rate factor is definitely huge. There’s no disputing that. It’s been difficult for buyers to kind of swallow that pill. We’ve been used to lower interest rates for an extended period of time. Now you’re kind of re-educating people," Swink added.
Swink says many people are choosing to land their dream properties now with the option of refinancing in the future for a lower rate.
Both realtors say if people are eager to buy or sell, there will be options.
"A lot of people are scared of buying a house because the interest rate keeps going up and that is a mistake because now you can buy the house cheaper than you could 6 months of a year ago," said Gaston.
