GRAND RAPIDS, Mich. -- As the summer heated up, the housing market has, too. But what does this mean for the average home buyer in West Michigan?
According to housing market experts, those looking to buy a home are seeing historically low inventory, increasing prices, a 12-month wait for new construction, and record low interest rates. And they say they’ve never experienced a housing market like this in Grand Rapids.
“The economy is great right now. It’s booming,” said Amanda DeLong with Patriot Realty.
This is a far cry from where we were just a few years ago, says Tom Cronkright, co-owner and CEO of Sun Title. “Something could literally list today at 4:00 p.m. and under contract tomorrow at noon,” he said. “I can’t remember a time we had inventory move this fast.”
According to the Grand Rapids Association of Realtors, there was a 13-month supply of homes on the market in 2009, but this past June that supply had dropped to 1.5 months. But Conkright says the actual supply of homes is down to around two weeks. “Things are moving that quickly."
Average monthly supply of homes for sale
Conkright says there are several factors driving the housing market this summer, starting with employment growth that continues in Grand Rapids. The city’s employment growth has more than doubled the national average.
Plus, “the young educated folks through the universities in Michigan, but also outside, are looking at this market to start their careers and are staying,” Conkright said.
What's more, interest rates on homes sit at an all time low for the last seven years. “Interest rates went down as part of the economic stimulus during the great recession, and frankly they’ve stayed down,” Conkright said. “I think we're going to be a in a low rate environment, low inventory environment, for some time to come, well into next year.”
The result: an extreme shortage of humble abodes.
“At the rate homes are selling, if nothing else were to be listed, there would be no homes left in six weeks,” said DeLong from Patriot Realty.
DeLong says houses are selling with multiple offers and average prices in the area increasing around $70,000 in just six years.
Average sale prices (click to enlarge)
“My sellers are loving this market.”
Those involved in construction are loving the market, too. “That area of business is booming as well,” Conkright said. He says builders can't build fast enough.
DeLong suggests that sellers take advantage of this time to sell, because your house is likely worth more now than ever and be prepared for your home to sell quick.
As for buyers, “In this market, you just have to be patient," DeLong said. "You have to realize you will most likely be asking over asking price, and you won’t have a ton of negotiating power in regards to the inspection process. You might have to go through that offer process numerous times before you find one that gets accepted for you.”
If you are interested in the home featured in our story, call Amanda DeLong at 616-430-3587.
