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Where is the Ann Arbor Condo Market going in 2010

As we approach 2010,  the big question is, "Where is the Ann Arbor Condo market headed".   After several years of dramatic price decreases, and decreased unit sales, we are heading into 2010 with some of the lowest inventory since July, 2007.


As of Dec 20, 2009 there are 347 condos for sale in Ann Arbor, which is down from 563 last December and 673 in December of 2007.   This is a 55% drop in inventory over the past two years.   This is a very good sign for the supply side of the equation.   However,  there has been a 25% reduction in sales in the same time period.    The months supply of inventory is slowing decreasing, to where currently there is a 9.2 months supply of condos in Ann Arbor, which is down significantly from 18 months supply in 2007.   Whenever there is more than an 8 months supply of inventory, we are in a buyer's market.   Anything below 5 months is considered a seller's market.    With 9.2 months supply we are approaching a balanced market.  Should this trend continue, prices will begin to stabilize and possibly increase as competition increases.


Prices have decreased 25% since 2007, creating some of the lowest prices in years.    As inventory decreases we should see a firming in price.    The only exception to this will be foreclosures, which have really affected prices in certain complexes.   However, with lower prices, low interest rates, the tax credit, and decreased inventory, the demand side should be strong in  2010.   


First time home buyers will qualify for a $8,000 tax credit so long as they purchase by April 30, 2010.    This will definately give the market a shot in the arm for the first 4 months of 2010.

Short of a major economic shift, all the trends are pointing to 2010 being an excellent year to purchase a condo in Ann Arbor.    There is seldom a time where every factor that controls price is lined up so perfectly.    Should rates go up only 1%, you lose 10% of your buyer power.    Should inventory continue to decrease, there will be upward pressure on price, and when the tax credit disappears, you lose the $8,000 credit.   So buy your next condo before any of the current market conditions change.

For more information, call the Ann Arbor Condo Experts at 734-761-3060

Posted Monday, January 11, 2010 by Martin Bouma