Prospective home buyers face bidding wars in housing market crunch

Posted at 11:46 PM, Mar 22, 2016
and last updated 2016-03-22 23:46:57-04

GRAND RAPIDS, Mich. -- People looking to buy a home in the greater Grand Rapids area are quickly finding supply isn't meeting demand.

Average months of inventory

Average months of inventory

According to the Grand Rapids Association of Realtors, the number of houses on the market is at a 15-year low. There's only a one to two month supply, which means that it would only take a couple months to sell every home currently available on the market.

Julie Rietberg, CEO of the Grand Rapids Association of Realtors, says that members have been concerned about the low inventory for the past two years, and that supply has recently gotten worse.

"There's simply not enough inventory for the number of buyers out there," Rietberg said, "so it's the whole issue of supply and demand."

Average home sale price

Average home sale price

With the supply of homes dwindling but demand remaining constant, home prices are rising. According to GRAR, the average home price in Grand Rapids is roughly $175,000, a 20-year high, and on the expensive side for first-time buyers.

For instance, Felicia Kas has been looking to buy a home for about eight months, but she says good houses go too fast. "It's an emotional thing to buy a house, and if you get outbid, it's devastating," Kas told FOX 17. "Don't get your hopes up, because you're probably going to get in a bidding war."

Part of the problem stems from the kinds of new homes that are being built. Rietberg says that builders today can find available lots for high-end housing, but affordable housing areas are elusive. As a result, professionals say potential buyers can expect to see homes built in areas that homes aren't normally built in an effort to revive inventory.