The housing market has stabilized in Grand Rapids, Michigan. Gone are the days when investor traffic flooded the market and houses were being plucked up at rock bottom prices. Although exceptionally low inventory throughout much of the past 18 months has been a challenge, home buyers are once again entering the market in a serious way. There is ample reason to indicate that a foray into the real estate market in Grand Rapids, Michigan today is a prudent financial move.
According to a recent article in Forbes Magazine, Grand Rapids Mi is now ranked as one of the nation’s Top 20 Housing Investments. The list was based on key indicators such as: employments opportunities, annual job growth, population and the calculation of an area’s Equilibrium Home Price or Income Price. This Equilibrium Home Price is used as a tool to measure what the average home price in any given area would be absent distortions such as the housing crash of recent years. A good score on this index provides investors with confidence that their investments are likely to garner a good return.
Another measure of the strength of the real estate investment sector in Grand Rapids, Michigan is the affordability index. According to statistics cited in the Forbes article, Grand Rapids, Michigan is currently under-priced by 23% when compared to similar areas across the country. One of the advantages the West Michigan area has had is the fact that the market was never seriously overheated. For the most part, appreciation rates were stable even during the wild upward swings that overtook many cities prior to the housing crash. Although Grand Rapids was affected significantly by the crisis, housing has regained its losses and home owners are seeing steady gains in their home equity.
Additional factors which bode well for Grand Rapids, Michigan in terms of real estate investment include a strong rental market. Vacancy rates in the Grand Rapids area are very low. The growth of area colleges (in particular Grand Valley) and the influx of population moving into the area for jobs has created the perfect storm as it collided with people who had lost their homes during the housing crisis competing for dwellings as well. Buyers in the Grand Rapids, Michigan area are finding that with low interest rates, it is often much cheaper to buy a house than it is to rent one.
Metro Grand Rapids, Michigan Quick Stats:
MSA: Grand Rapids-Wyoming, MI
Avg. Home Price: $149,123
Pop Growth (’10-’13): 2.8%
Jobs Growth (annual): 3.7%
Annual price growth: 8%
Over (+) or under (-) priced by: -23%
Home Price/Rent Ratio: 14
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