Grand Rapids, Michigan Rated a ‘Best Buy” Real Estate Investment for 2015

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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.

Related Content:  11 Reasons Why People Who Don’t Live in Grand Rapids, MI Should Wish They Did!

Metro Grand Rapids, Michigan Quick Stats:

MSA: Grand Rapids-Wyoming, MI

Pop.: 1,016,603

Avg. Home Price: $149,123

Pop Growth (’10-’13): 2.8%

Jobs Growth (annual): 3.7%

Unemployment: 4.7%

Annual price growth: 8%

Over (+) or under (-) priced by: -23%

Home Price/Rent Ratio: 14

Click on the picture below for the slide show featuring all the “Top Best Buy’ cities to invest in real estate within the United States.  Contact Audu Real Estate by calling 616-791-0511 or e-mail:  info@audurealestate.com for more information.

Grand Rapids MI Where to Invest Capture

 

Real Estate Market Trends Fall 2014~ Has the Grand Rapids MI Real Estate Market Softened?

Palmdale exterior framedThis summer, our market trends blog documented the issue of an unusually low inventory (less than 3 months supply) in the Grand Rapids MI real estate marketplace.  According to the data report, (which tracked data available through the Grand Rapids Association of REALTORS up to May 2014) the amount of housing inventory available for sale in West Michigan had dropped to under 3 months of supply.  (2.4 months to be exact based on Pending Sales)

Recently, the Grand Rapids Association of REALTORS released their September report.  Inventory levels have relaxed a bit with levels of 3.6 months based on Pending sales.  There has been a decline in the number of Pending Sales, BUT this has resulted in an INCREASE in the average sales price- almost 10% above the same period last year and 10% over last year’s sales prices.

These numbers are based on Pending sales activity but are tracking fairly closely with Closed transactions which are only slightly lower at 9.6%.  Closed transactions pricing is slightly lower at $169,112 vs just over $172,000.

So, does this imply that the market is softening?  The answer is a mixed Yes & No.  An important statistic to note when looking at the numbers is how long homes are staying on the market before they are sold.  In May, the average home was staying on the market for 52 days or more.  In September, the number dropped to 47 days.  So while, the price of the average home may have dropped by 2%, the amount of time to sell the average home has also dropped by approximately 10%!

So, it’s a little bit of a mixed bag.  Prices have dropped slightly, BUT homes are selling more quickly.  Inventory has risen since the summer from just under 3 months (2.8 months)  in the summer to over 3 months (3.6 months). To sum things up:  When homes are priced correctly and show well, the fall market can be very attractive because the competiton is less.  You’re more likely to be dealing with fewer new listings and the excess inventory is often carry over from listings which did not sell during the summer.

Inventory Shortage ~ Availability, Pricing and Access to the 2014 West MI Housing Market!

The big news for the summer of 2014 according to statistics compiled and released by the Grand Rapids Association of REALTORS is Housing Inventory…or rather the lack of it as the community prepares to enter what is traditionally the most active segment of the selling season.  According to the report, (which tracks data into May 2014) the amount of housing inventory available for sale in West Michigan has dropped to under 3 months of supply.  (2.4 months to be exact based on Pending Sales)  To give you perspective, a balanced market would have the housing supply at 6-7 months during this time of the year as many homeowners normally take advantage of the warmer weather and school closings to market their homes.

Trends Graphic for Housing Inventory in West MI 2013-2014

Trends Graphic for Housing Inventory in West MI 2013-2014

The issue of low inventory has dogged the market throughout most of 2014.  New listings arriving on the West Michigan market have been about 12% lower than the pace of last year.  (2014 – 6,592  new listings YTD vs 2013 – 7541 new listings).  But in spite of the Inventory shortage, the Sales Volume for 2014 is on an upward trend!  In fact, 2014  Sales Volumes for the real estate Board shows an increase of 4.1%  for 2014 over last year and in May alone of this year, a 14.6 percent increase based on actual Closed Sales.

So what does this mean for the West Michigan Home Seller?  Well, Average home prices have increased over 9% during the past month.  Last year, the Average Home sold for $157,814 during the month of May.  Today, the average price is $174,001.  When ALL Sales including vacant land and multi-family units are added into the mix, the numbers drop a little, but irregardless, the average price of $167,728 is the highest price we’ve witnessed for almost a decade.

If you’re in the market for a home purchase, be prepared to aggressively pursue your goal.  This is not a market for the faint-hearted when it comes to the prospect of bidding wars and making quick decisions.  But, a quick decision does not mean you should make a rash decision when in comes to purchasing a home.  Afterall, this is the biggest investment that most Americans will make.  To be effective in a successful negotiation in this market, be prepared to do your research and know what’s for sale in the areas which interest you.  As REALTORS, our company sets up client portals which provide instant notification when new listings which match the criteria for a home which might be a match shows up on the Multiple Listing Service.  In addition, have all financing in order as a well qualified buyer wins hands down in this type of market.

If you’ve been considering placing your home on the market, your timing is impeccable!  However, be forewarned that this market requires attention to detail in which market savvy buyers are not simply looking for a home, but for a well priced and well presented home.  They’ll fight for that!  On the flip side, homes which do not show well, continue to be penalized and sell for less even in a market as active as this one.  If you’d like to know what you need to do to make sure your home attracts the best type of attention and price, give us a call for a free consultation at 616-791-0511.

*Trends Graphics provided courtesy of the Grand Rapids Association of REALTORS

Spring 2014 Real Estate Market Update for West Michigan

Welcome to Spring 2 PicMonkey Collage

So, what does the Spring Market look like in West Michigan – Grand Rapids? Well, in a nutshell…it’s interesting! My go to word when things are unexpected, don’t quite fit into the routine and operate outside of established or expected norms.

Interesting, this Spring means unexpectedly low inventory levels. Normally, there’s a significant uptick in homes for sale, this year inventory levels continue to run well below the average, with March 2014 listings being 26.5% less than last year and overall home listing totals throughout 2014 so far running 27.4% lower than the volume of 2013 in the first quarter.  In fact, inventory levels are recorded as the lowest since 2002 according to data available from the Grand Rapids Association of Realtors monthly marketing update.

What has that meant for housing values? Well, the squeeze on inventory has increased the value of West Michigan real estate. It’s a basic supply/demand thing. Overall, housing prices are approximately 14% higher than they were this time last year.  That being said, mortgage rates are still cooperating for the most part, so in many cases, it’s still actually cheaper to BUY a home than it is to rent a similar dwelling.

Add to that, the recent MI incentive to encourage home ownership with up to $7,500 in MSHDA grant money to qualified home buyers, well…this could present the unlikely paradox of ‘the best of both worlds’ for potential homeowners and purchasers in West Michigan. Are you noticing more For Sale & Sold signs in your neighborhoods yet?

If you’re interested in looking at the hard numbers available through our local real estate association, click this link.

2014 Spring Residential Real Estate Market Update – Grand Rapids, MI

2014 arrow CaptureThe term Polar Vortex has become a national buzzword as harshly cold winter conditions have blanketed much of the nation.  However, as 2013 ended, real estate in the West Michigan area was heading in the opposite direction with a flurry of heated market activity.  Listing inventory remained low (3.3 months supply in November) with less than four months of housing supply in stock which pushed up average sales price to $153, 000, the highest numbers the local market had witnessed prior to the market crash.

The total number of housing units for sale in the Grand Rapids was down 18% in December 2013 to 2,989 units vs 3,640 in December of 2012.  Homeowners who chose to sell during the end of year were often surprised by an increase in showing requests!  Some additional significant data points include:

1.  New listings coming on the market in December were approximately 25% less in 2013 than in 2012. This trend has not showed signs of significant increase yet, although things are anticipated to pick up in the latter part of the month and February.

2.  Sold inventory dropped slightly from 757 units in December of 2012 to 707 units in 2013.

3.  The Absorption Rate based on Closed Sales remained at approximately 24% similar to the rate of absorption throughout much of the last  quarter of 2012.    Peak absorption rates last year occurred during the month of May in which the rate of market activity was 39.5%.  What this means is that approximately 1 in 4 homes listed for sale is being sold in any given month on average.

These indicators have served to increase the average sold price and keep the differential between average list price and sales price at approximately 94% which translates to higher net equity for home sellers at the closing table.  Due to unusually low inventory levels, days on the market currently stands at approximately two months.  Homes which are staying on the market for more than 90 days are over-priced.  The market remains unforgiving in that regard.

The median home price is $126,000 which is approximately $10,000 higher than the median housing price at the end of the previous year.  It should be noted that each neighborhood in the Grand Rapids area will reflect its own unique variant of this data, therefore pricing strategy must be adjusted accordingly.

Data for this report obtained from the Grand Rapids Association of REALTORS monthly trends report and SWMRIC trendsgrahpix.

To obtain additional information on this report:  lola@audurealestate.com or 616-791-0511

7 Tips for Prepping for a Home Sale during Frigid Winter Weather!

winter-by-audreyjm529Dreadfully cold weather tends to keep most of us in West Michigan inside as much as possible.  Looking outside my window today, this is definitely the case.   With the exception of the snow plow guys, there are few cars on the street.  Even regular dog walkers seem to be sitting in on this one.  If you’ve been thinking about putting your home on the spring market, the prospect of you or someone looking at your home getting stuck in a snow drift in your driveway is a little depressing.  However, there are a number of things that can be done indoors on days like today to keep you on track with regards to being in your new home as soon as possible.

Clear Out Closet Space!

Winter is a great time to reassess the contents of your closet.  If you haven’t worn something once during the year, perhaps it’s time to give it away, donate it or throw it out.  Consider it a small step in the ‘letting go’ process…letting go of smaller items as you prepare to let go of your home so you can make room for new things and new beginnings.

Touch-up Paint

After the holiday decorations are taken down, a home often looks starkly plain.  This is a great time to examine the state of your walls and woodwork.  Is there grime or dirt that needs to be washed or painted?  If you’re stuck indoors, consider picking up a sponge or paintbrush amd doing some touch-up painting.  This is one of the cheapest ways to enhance the appearance of your home.

Organize Garage

Yes, the garage will be cold, but at least it is protected from the elements.  If possible, it is better to clear out your garage when putting a home on the market.  The next best option is to organize it. Neatly staked/arranged boxes or shelves will make even a cluttered garage look as though there is some space for someone else to put their stuff.

Involve Your Kids

On a days like today, most schools have been cancelled.  So kids are home.  And they can be useful, particularly if they have an incentive to help or if an activity is fun.  You know your kids better than anyone else, so think about how to motivate them to help you with getting your home ready for sale.

Collect Documentation for Mortgage Application

If you will require a mortgage to purchase your next home, this is a good time to begin to gather the necessary documentation for your lender.  They are likely to ask for financial records such as a month’s worth of pay stubs, bank statements, last year’s tax returns etc.  Taking the time to put these items in one spot now will save you time in the future.

Update Multiple Listing (MLS) Search Profile

Housing inventory remains tight in the West Michigan area and across much of the country.  Hopefully,  you have created a customized online search profile and are receiving real time updates of available home listings.   If you haven’t done so, that is definitely step 1!  Assuming you have a search profile in place, take the time to review it.  Are there some areas or types of homes which might work which are not included in your current specifications?  The number 1 reason that many people fail to have the best results when searching online is that they make their computer specifications for a home too narrow.  Sometimes, just a little tweak will yield a new set of results for you.

Always feel free to contact us for assistance with your real estate needs.  We’re here to help!

How to Avoid Landmines When Negotiating Multiple Offers During a Home Sale!

Multiple offers in Home NegotiationIn West Michigan, the transition from a sluggish market to a market on fire has been fast and furious over the past 18 months.  At first, many were hesitant to believe that a transition was actually happening.  While serving as the President of the Grand Rapids Association of REALTORS in 2011, we had begun to track an interesting trend which indicated that housing prices were stabilizing.

This was in spite of national indicators that predicted that our recovery would be delayed until approximately 2023, there were encouraging indicators that this dire prediction might not prove true.  Of course, there was a lot of caution.  After all, our area had witnessed some of the most grueling aspects of the economic recession as short sales and foreclosures at one time constituted more than 2/3 of all transactions in the market place.

Fast forward to 2013.  Times have changed!  Today, housing inventory in the West Michigan market is less than three months.  It is not unusual to field multiple offers for a home listing.  I recently attended a national real estate conference.  When asked, almost 100 percent of the attendees at one of the seminars indicated that in their markets, multiple offers and housing shortages were also becoming the norm.  Especially, when the homes were priced appropriately and also showed well.  (This is an important caveat)

So, what should you know about a multiple offer situation?  Are there some do’s and don’ts which can help you to secure the best price while protecting your most important investment?  Absolutely!  In fact, the National Association of REALTORS has published an informative article to assist you in determining how best to navigate a multiple offer scenario.  Some questions you might have which are answered are:

1.  Does a homeowner have to accept the first offer tendered?

2.  Is it possible to ask all parties to present their best offer and how is this done?

3.  Who makes the decision about how multiple offers will be presented?

4.  Is it possible to determine how to deal with multiple offers BEFORE the situation arises?

While this guide will serve as a handy reference, its important to understand that local customs, traditions, rules and to some extent law can also impact the way in which transactions are negotiated.  It is important to work with a knowledgeable REALTOR to determine the best course of action.  My experience in negotiating multiple offers is that the Golden Rule is one of the best principles to follow.

We strive to treat our clients and the parties presenting offers with the dignity and honesty which we would like rendered to us.  If you have any questions about Listing your home or would like to talk more about the current state of the housing market in the Grand Rapids, Mi ~ West Michigan marketplace, please contact our office.