Real Estate Update: Prices Are at an All-Time High — What This Means for You

After 24 years in real estate, I’ve never seen anything quite like this.

Sales are still happening, and when they do, they’re often setting new price benchmarks. I’ve had to reset my own expectations of what homes are worth — prices are higher than ever.

Here’s what’s driving it:

• Labor costs have skyrocketed. Skilled labor is scarce, and the cost to build is higher due to regulations and workforce shortages. That directly translates into higher home prices.

• The return of the McMansion. Remember during the Great Recession when everyone said big homes were a thing of the past? Not anymore. Over the last decade, custom builders have focused almost exclusively on large homes — 3,500 to 10,000 square feet. These homes take longer to build and require more labor, which further reduces supply of modest-sized homes (1,000–2,400 sq. ft).

• Vacancy is rising. I estimate that up to 40% of these large homes are currently vacant. The ones that are occupied are often owned by retirees living with one or two people in a house meant for ten.

Now, I’m starting to see these homes hit the market — and here's why that matters:

Many owners are realizing they don’t use the space.

And if they sense that values are peaking or declining, they’re likely to list. When that happens, we will see a flood of large homes for sale, which could push prices down in that segment.

So what does this mean for you?

• If you’ve been thinking of upgrading, this is a great window to sell at a premium and move up before more inventory hits.

• If you own a large home, this may be the ideal time to sell — before other vacant homeowners do the same and competition increases.

This is a rare window of opportunity. If you'd like to talk strategy, I'm happy to do a no-obligation review of your home’s current market position and options moving forward.


Michael Perna
The Perna Team Real Estate

PS.  Send me an email with your address if you want to sell your McMansion before other McMansions hit the marketplace.  

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248-494-4698 | 39475 W 13 Mile Rd #103, Novi, MI 48377 | ThePernaTeam.com