This is a comparison of Zillow charts that show average home prices in Grand Rapids Michigan and some comparable markets. Average Sale prices as of March 2022: Grand Rapids $252k, Ann Arbor $470k, Detroit $65k, Battle Creek 161K, Madison WI $265K, Indianapolis $217K, Cape Coral FL $393k.
Information is swirling about the housing market as buyers make plans for 2022. Interest rates are still attractive, payments are pretty affordable compared to rents. The question is, can a regular person just buy a home in this market?
This “active residential listings” chart has been receiving attention, and rightly so. Current Active listings are at a modern-day low. Currently, the number of homes with “sale pending” signs is 140% of the number of homes with active “for sale” (active) signs.
How about total number of new listings submitted to the MLS annually? Comparing 2015 to 2021, it looks like the annual number of homes listed is down by a total of 15%. That’s 2268 fewer annual listings per year, or 189 fewer listings per month. 2015 was a year when Realtors were fighting to prove a 2-5% increase to appraisers, often falling short, as many appraisal reports still somehow showed the Greater Grand Rapids market as “stable” as opposed to “appreciating.”
The red box illustrates an era when local inventory was flooded, with homes eventually ending up selling for pennies on the dollar. That took a few years to get past, and took homes away from a lot of people. People were trending out of homes fast, loans were harder to get, and rental investors made up a large portion of buyers. That’s one reason we saw the epic first time buyer tax credit in 2008-09.
Here’s an interesting chart. Number of homes sold does not seem to change much from year to year. This chart compares number of homes sold in January each year since 2012. The population of West Michigan is pretty stable. Confidence in 2022s housing market is high as people watch property values quickly increase. The group of active first time buyers, which drive the housing market, is increasing. Loans are easy to obtain and cheap, rents are going up, and the generation of Millennials in the age range of 26-41 are rapidly entering the market.
Solutions to low inventory are not super encouraging in the short term:
*Redistribute some rental homes from investors back to owners, left over from the foreclosure era. Offer investors incentives to sell rentals, possibly a reduction in capital gains tax or a creative local state or federal tax incentive
*More new construction, address labor shortages, address supply chain issues, incentivize builders?
*Interest rates raising, making homes less affordable
*Reduction in conglomerate purchases or REITs
*Reduced foreign investment
*Restrictions on short term rentals
*Buyer Fatigue
*Shift in demand
*Shift in population
Is it still possible for a regular person to buy a home in 2022?
Yes. A successful buyer will align with an experienced agent who understands the current market, property values, and has a strategy for this market. Agents at Grand River Realty have the knowledge, training, experience, and strategy that is necessary to be successful as a buyer in this competitive market. Here are some great Realtor® options.
Posted by Pete Bruinsma, Broker.
Pete’s Buyer Stats from 2021
West Michigan’s annual GRAR installation and awards ceremony held December 10, 2021 included 9 annual Pinnacle Awards. The Pride of Ownership/Rehab award was given to Pete Bruinsma of Grand River Realty.
The Pride of Ownership/Rehab Award is designed to recognize those individuals within the REALTOR® Family (REALTORS®, affiliate members, etc.) that have purchased a “fixer upper” home during the current calendar year and made significant upgrades to the home to assist in raising property values.
Congrats to all of the Pinnacle Award recipients!
Congrats to Pete Bruinsma upon graduation from GRARLA, class of 2020-2021.
The annual GRAR installation and awards ceremony held December 10, 2021 featured graduates from Greater Regional Alliance of Realtors Leadership Academy. The exclusive, year-long program offers a dynamic blend of experiences, education, and opportunities that are intended to foster a new generation of real estate industry leaders that are diverse in age, career experience, companies/brokerages, service specialties, geographic location, and gender. The class size is determined by the Candidate Review & Development Committee and is limited to 20 members per year.
Thanks so very much for your “Best of the West” votes this year!
As we celebrate successes and enjoy recovery from a tough year, it is important to remember the independent organizations doing great work in our community who need replenishment. While asking for votes we asked for your favorite local charities and received many suggestions. GRR will be making donations to WYCE, Grand Rapids Urban League, and a new one to us, Streams of Hope.
We’d like to thank Revue West Michigan for their tireless coverage of our entertainment scene. Congrats also to our friends and colleagues including Katy Batdorff Photography, The Pyramid Scheme, The Intersection, Furniture City Creamery, Gaia Cafe, Wealthy Theatre, All In Hospitality Group, The Mitten, Harmony Brewing, GR Noir, Uncle Cheetah, Speciation, Logans Alley, Lake Michigan Credit Union, Vertigo Music, Peaches B&B, Patty Pershayla and Earth Radio. Thanks AJ Paschka for the awesome laser-like trophy-like artwork.
Grand River Realty Broker Pete Bruinsma was interviewed on Fox 17 news this week after his Instagram photo generated mixed feelings, displaying lines out the front door of a Saturday open house on a sunny afternoon along Riverside Park. While Mr. Bruinsma never mentioned a housing boom or lack thereof, the interview touched on a few points of interest:
Why does this housing market favor sellers so heavily?
OK, HERE’S THE VIDEO:
Home prices recovered from 2008’s crash and have been increasing since 2009. People’s memories of the trauma stemming from the foreclosure flood and sustained shadow inventory, are all too fresh. Here’s an article Mr Bruinsma wrote in 2015 when many people were worried about sustained housing appreciation.
Median single family home prices on the rise in the City of Grand Rapids are currently on a sustained rise:
Link to Fox 17’s blog post about the open house photo:
901 North Ave NE #7 Grand Rapids Michigan | $120,000
Two Bedroom Condo in Belknap Lookout, Near Downtown and Medical Mile, 787 sqft.
This tastefully-modernized condo offers more than you would ever expect at such an affordable price! Located at the top of the hill above the Belknap area & downtown Grand Rapids, this second-story condo has quite the view over a large manicured back yard and wooded area beyond. All just a few streets away from Highland Park and the Medical Mile. The interior is in great shape with nice oak cabinets, a fireplace in the living room and convenient stackable washer/dryer in the updated bathroom, all with two good sized bedrooms. The back porch has a grilling and lounge area, winter views of downtown and the rest of year is surrounded by beautiful trees. Monthly dues include your water bill, landscaping, exterior insurance and future maintenance of the building which is entirely handled for you. Move in and relax! Possession at close.
Full listing and more info on GRAR: https://www.grar.com/property/mls/21003404
