Ann Arbor, MI Real Estate Market 2026: A Score of 83 With the Highest Pending Ratio in This Batch

The Ann Arbor, MI real estate market scores 83 out of 100 on the PropertyIQ Score as of February 28, 2026. That is a strong score in an unusual market. Ann Arbor is not scoring 83 because of explosive price growth or a flood of new arrivals. It is scoring 83 because supply is extremely constrained and the buyers who want in have no alternative but to compete for a small number of available homes.

One number captures the dynamic better than any other: a pending ratio of 0.79 as of February 2026. That means for every 100 active listings, 79 homes are already under contract. In most markets, the pending ratio sits between 0.20 and 0.45. At 0.79, Ann Arbor is operating in a different category.

What a Score of 83 Actually Means

The PropertyIQ Score synthesizes supply, demand, economic, and valuation data into a single 0-to-100 monthly score. A score of 50 represents the Michigan state average. At 83, Ann Arbor is significantly above that average, placing it among the stronger mid-sized markets in the Midwest.

The recent history adds important context. Ann Arbor peaked at 94 in April 2025, pulled back to 70 in May and again in January 2026, then recovered to 83 in February 2026. The score oscillates more than consistently high-scoring markets like Worcester or Akron. That volatility reflects Ann Arbor's sensitivity to the academic calendar and seasonal buyer patterns tied to University of Michigan hiring and relocation cycles.

The current demand score is 72.2 out of 100. The supply score is 63.9 out of 100. Demand leading supply at this margin, in a market with only 463 available homes for a metro of 368,000 people, creates the conditions for the 0.79 pending ratio.

Ann Arbor Home Prices and Market Activity

As of February 2026, the median listing price in Ann Arbor is $446,000 per Realtor.com. The Zillow home value estimate is $404,020 as of January 2026.

Year-over-year listing price change is -7.99% and month-over-month is -2.19% as of February 2026. Those numbers need context. A listing price change is not the same as a sold-price change, and in a low-inventory market where the mix of what is listed shifts, YoY listing price comparisons can be misleading. The Zillow forward forecast as of December 2025 projects +1.2% appreciation over the next 12 months, not a decline.

Key market activity metrics as of February 2026:

• Days on market: 57 days
• For-sale inventory: 463 active listings (up 16.04% year-over-year)
• New listings: 250 (down 7.41% year-over-year)
• Pending listings: 366 (pending ratio: 0.79)
• Price cut rate: 9.81%
• Price per square foot: $238
• Home sales year-over-year: down 9.85%
• Sale-to-list ratio: 99.4%
• Demand score: 72.2 out of 100
• Supply score: 63.9 out of 100

The home sales volume decline of 9.85% year-over-year is not a demand problem. It is a supply problem. When only 463 homes are available and new listings are declining, there are fewer transactions to close regardless of buyer interest. The 0.79 pending ratio and 99.4% sale-to-list ratio confirm buyers are ready and willing. They are just waiting for inventory.

The 9.81% price cut rate is one of the lowest in this batch. Sellers in Ann Arbor rarely need to reduce. When they do, it is typically a pricing error on a specific property, not a market-wide softness signal.

Ann Arbor Economic and Demographic Data

The Ann Arbor metro population was 368,394 as of 2023 Census data. Median household income was $87,156, one of the higher medians in the Midwest and reflective of the University of Michigan's outsized role in the local economy.

The income needed to buy at median prices is $118,545, creating a meaningful affordability gap against the $87,156 metro median. The homeownership rate is 61.63%. Median age is 34.8, reflecting the young professional and graduate student population that defines Ann Arbor's demographic character.

Unemployment was 4.0% as of November 2025. Ann Arbor's economy is anchored by the University of Michigan, one of the largest research universities in the United States. The university drives healthcare employment through Michigan Medicine, research employment across dozens of institutes, and a continuous pipeline of educated talent that either stays in the market or attracts employers to follow. Major private employers include Domino's Pizza (headquartered in Ann Arbor), ProQuest, and a growing cluster of automotive technology and autonomous vehicle companies that have located near the university's engineering programs.

The Inventory Constraint: Why 463 Listings Is Not Enough

Ann Arbor's supply constraint is not seasonal. It is structural. The city's geography, zoning, and the University of Michigan's land ownership create natural limits on developable residential land. New construction activity is limited. The Zillow new construction sales figure for November 2025 was only 20 units, a fraction of what a growing metro would need.

With new listings down 7.41% year-over-year, the inventory that does exist is moving faster than it is being replaced. The 16.04% increase in total active inventory is likely a mix of homes that took longer to sell at elevated prices, not a genuine surge in new supply entering the market.

For buyers, this means: when a home you want comes available in Ann Arbor, you are competing against many pending offers. The 0.79 pending ratio is not an abstraction. It means that at any given moment, three out of every four suitable homes already have an accepted offer.

Ann Arbor as an Investment Market

The Ann Arbor rental market benefits from the same structural demand that drives owner-occupant competition. The Zillow rent index is approximately $2,039/month as of December 2025. The university generates consistent demand from graduate students, faculty, and researchers who need multi-year leases or long-term rentals near campus.

The overvaluation metric for Ann Arbor is 30.5% as of February 2026, meaning prices have outrun local income-based affordability. The 5-year home value appreciation figure in the data is 0.62%, which appears anomalously low given the market's performance. That figure likely reflects the specific base period used in the calculation and should not be interpreted as five years of flat performance in a market that has consistently scored in the 70s and 80s.

For investors, Ann Arbor is a long-term hold market with a rental demand floor anchored by the university. Cash flow at $404K entry prices and $2,039/month rent is challenging but not impossible with the right financing. Appreciation and equity growth are the primary investment thesis.

What Buyers Should Know About Ann Arbor in 2026

For homebuyers: Ann Arbor in 2026 rewards preparation. With 463 active listings and 366 pending, the effective available inventory is even smaller than the headline number suggests. If you are serious about buying in Ann Arbor, you need financing pre-approved, a clear sense of your acceptable price range, and a willingness to move quickly. The 57-day average time on market is a metro-wide average. Well-priced homes in desirable neighborhoods move much faster.

The income gap is real. At $118,545 needed to buy comfortably and a metro median of $87,156, many Ann Arbor residents rent by necessity. This is not a deterrent for buyers who qualify. It is a reminder that qualifying is not universal.

For investors: Ann Arbor is one of the more reliable university-anchor investment markets in the Midwest. The University of Michigan will not relocate. Graduate enrollment will not collapse. Rental demand from that base is durable across economic cycles. The entry cost is higher than Detroit, Flint, or Lansing, but the tenant quality and vacancy risk profile are correspondingly better.

The Bottom Line

The Ann Arbor, MI real estate market scores 83 out of 100 on the PropertyIQ Score as of February 28, 2026. With a pending ratio of 0.79, only 463 active listings, and a sale-to-list ratio of 99.4%, the supply-demand imbalance is clear. New listings are declining 7.41% year-over-year. The Zillow forward forecast projects +1.2% appreciation.

Ann Arbor is a market where buyers compete hard for what little is available, and where the University of Michigan creates a structural demand floor that is unlikely to erode. The score of 83 reflects that reality.

View the full Ann Arbor PropertyIQ Score and compare it to other Michigan markets at propertyiq.app. Free to use, updated monthly.