A decade ago, most area REALTORS were not receiving many inquires about homes to rent in Grand Rapids and the West Michigan area. In fact, less than 48 months ago, there was no way for real estate agents to reliably search or list on the local Multiple Listing Service for Rental homes. So much has changed. Today, the options for clients who need to rent a home, duplex or condo can now be serviced through the Rental Multiple Listing Service, a data exchange between area REALTORS which promotes properties available for rent in the West Michigan area.
There has been a significant increase in the number of people who are seeking rental housing across all price points in the real estate market place. This rise in demand has also prompted a rise in rental rates with some estimates being an anticipated 6-10% increase in rental rates over the next year. There are many reasons for this shift…
1. Distress & Foreclosure Sales
The past five years have been tumultuous in the real estate industry as prices plummeted and many home owners found themselves owing more on their homes than they could be sold for in the open market. As a result, many homes were sold at a loss through Short Sales and Foreclosure Sales. At one point, almost 60% of the sales activity in West Michigan was related to a distress sale. This pushed up the demand for rental properties.
2. House Purchase Anxiety
Directly related to #1 in many ways due to the fact that some consumers were spooked by the decline in home prices and did not want to be in situation in which they lost money or had difficulty in retailing a home. Many potential home buyers have hedged their bets although in reality, the decline in home prices offered some of the best investment opportunities ever. Due to fear, some potential home owners have determined to pursue term rentals which has also fueled demand in the rental housing market in West Michigan.
3. Increased Mobility – Professionally & Personally
According to this report by the Department of Labor & Statistics, the average person in the United States held 11 jobs between the ages of 18 – 44. With increased mobility professionally and personally, consumers are more open to renting rather than putting their roots down to deeply in a community which they may need to exit from due to a job change.
4. Jobs, Jobs, Jobs…
And of course, the issue of ‘jobs’ remains front and center in terms of simply having one. Unemployment continues to be a factor in the wider labor market and this impacts the amount of money people can spend. Steady employment also impacts issue #5…Financing.
5. Difficulties with Financing
Mortgage financing has tightened significantly over the past two years, partly in reaction to the mortgage lending crisis. As a result, many consumers who would have had no problems obtaining a loan 3-4 years ago, find themselves unable to obtain financing for a home. A sizable number of self-employed individuals who have good incomes but may show business losses find themselves in this difficult position.
All of these factors are playing a role in the increased demand for rental housing in Grand Rapids, MI. We are finding that homes are renting quite quickly and some home sellers who have tried to sell their homes without success have found the home rental market to be a viable financial alternative.
If you have a home that you would like or need to rent, please contact us. We can provide you with a detailed analysis of your options with regards to pricing and marketing.
If you need to find a home, condo or duplex to rent in Grand Rapids, MI, here’s an Updated Link of Rental Homes available Today.
Call 616-791-0511 to arrange an appointment.
- Yikes…We’re Running Out of Homes to Sell! Real Estate Inventory Levels Reach Record Lows in West Michigan. (sellgrandrapidshomes.wordpress.com)