ANN ARBOR, Mich. – Combined, Tammi Ebenhoeh and her daughter, Alexa Ebenhoeh, have 22 years of experience in real estate around Ann Arbor, but neither expected the changes they’ve seen in the market during the COVID-19 pandemic.
“Through this pandemic, it made me realize that real estate is essential. Housing is a need, not a want,” said Alexa, a Charles Reinhart Realtor based in Ann Arbor.
She said that in the first few months of the pandemic, buyers were still visiting homes and were making offers on listings solely based on exteriors and neighborhoods.
Considered non-essential workers, the realtors didn’t show homes in-person between March and June. Both Tammi and Alexa said they had to get creative through using group video calls with buyers and sellers, or work with inspectors to let potential buyers into homes.
Because of the pandemic, Alexa said many of her buyers and sellers made their decisions in order to be closer to family. On top of that, many buyers have fewer expenses which has given them time to save for down payments or change loan categories.
“People who are still employed have awesome buying power right now, but low inventory is continuing to drive the prices,” said Alexa.
Tammi, also a Charles Reinhart Realtor and endorsed by radio money expert, Dave Ramsey, added that buying power is up because interest rates are at historical lows. Some of her clients with good credit are receiving interest rates below 3%, which means they can afford to look at different markets without paying a significant difference.
As for the questions buyers ask, Tammi said they have totally changed. Instead of open floor plans, buyers are concerned with potential work-from-home spaces and room for activities.
“We’re surprised that a lot of people are looking at country properties again,” said Tammi, adding that clients are looking for properties with big lots, yards, space to spread out and pools -- something many previous buyers have expressly not wanted.
The market isn’t flooded by just first-time homebuyers, Tammi and Alexa said that everyone is buying right now so all types of homes in different price ranges are sought after but the market is very competitive, especially in the $150,000 to $300,000 range. Newly listed homes are receiving numerous offers, even above the listed price, which can be attributed to the low inventory of available properties.
Tammi said that to make themselves stand out, clients have been covering appraisal gaps -- money that covers value differences if an appraisal comes in low -- or expanding their search areas.
✉ Like what you’re reading? Sign up for our email newsletter here!
On the selling side of the market, Tammi said there was a decline in sales earlier in the year, but since June she has seen more homes being sold this year than she did last year.
Both realtors noted that although the market is busy, things are moving slowly.
“A lot of people are selling first and buying second, but they’re staying in their properties up to 30-45 days, sometimes up to 60 days,” said Tammi.
She said that properties are not closing on time and appraisers and lenders are booked solid, which further slows the process.
While people are rushing to buy homes, both Tammi and Alexa said that they’ve seen a lot of deals be dropped. Coupled with lenders becoming more strict in their requirements, some potential buyers have been furloughed or suddenly experienced a loss of income.
Nevertheless, Alexa said buyers shouldn’t be discouraged. While prices have spiked, they aren’t unreasonable. She and Tammi agree that appraisals are coming in at-market rates but realtors are having to be creative to find listings or expand where they are looking. Alexa has even had to use her personal network to find homes that haven’t been put on the market.
“I think that there are ways to navigate this competitive market and structure a competitive offer, even if you don’t have a surplus of cash available,” said Alexa. “There are different ways to offer very attractive offers without having to go an insane amount of money over list price.”
For those feeling the pressure to buy right now, Tammi said they really need to think about what their needs are in a home and if what they are looking at actually fits their criteria.
She said that if properties don’t fit a buyer’s needs or their anticipated needs in the future, they need to wait.
As for what the future of the Ann Arbor real estate market looks like, neither of the realtors is sure. Tammi noted that fall and winter are usually quieter seasons, especially in presidential election years, but she and Alexa don’t see things slowing down as the number of those wanting to buy continues to grow.