It has been a whole year since I wrote a real estate market update for the greater Grand Rapids area. Why? It has been the same story for the last two years straight. How many different ways can you say "we have extremely low inventory!"?
As a refresher, inventory is measured by months of supply. Months of supply is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. Months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Our local market has strongly favored sellers the last few years. Although the market has been great for sellers, it has been extremely difficult for buyers trying to purchase, especially first-time buyers who generally have lower down payments.
The article "I Bought a Condo and it Ruined My Life" was posted on Vice recently. It was shared on Facebook with the suggestion that "this is why millenials don't buy homes." Reading through this I couldn't help but notice the similarities of my own housing situation. I also purchased in 2006 at practically the same age, before the housing market crash. However, my outcome was extremely different than Mike Tunison. My house has been a wonderful financial investment.
Zillow has a reputation for not being accurate and their "pre-foreclosures" are part of the problem. I get asked about these all the time by buyers. This home is not for sale. It is labeled as being in the process of foreclosure, but it is not a foreclosed property yet.
When someone stops paying their mortgage, the bank usually will threaten foreclosure after about 3 or 4 missed payments. Once this happens they schedule the property to go to auction at the courthouse. This auction is called the "sheriff's sale". Once the auction is scheduled, it must be printed in financial reports that are public record. Zillow claims they get this information from these financial reports.
It's spring cleaning time again. I don't know about you, but I haven't even started. Some tasks seem more daunting then they really are. The best thing to do is just start somewhere. Checklists and developing routines makes things more efficient and thus easier. Nothing is more satisfying than completing a project and checking it off a list. https://www.cleanmama.net/https://www.cleanmama.net/ is an awesome resource for cleaning and organization tips. There are a bunch of other checklists and such you can download for free on the website. Here are my top two favorite cleaning checklists-
Ken Kuiper Homes, https://www.facebook.com/kenkuiperhomes/, Kentwood, MI 49512
All-in-One Builders, http://www.allin1builders.com/, 1950 Waldorf NW, Grand Rapids, MI 49544, (616) 299-4171, email@example.com
Buying a new home and selling your current one can seem like a daunting task. The biggest struggle for most people is knowing their options and determining a realistic plan of action. Finances will play the largest role in this decision, but other factors are a consideration including the local real estate market, ease of moving, and the cost/availability of the next home and possibly an intermediate place to stay. So what are the different options?
1) Sell First, then Buy
This is probably the most common option people choose. Most people have the financial requirement to sell their current home in order to purchase another. The benefit of this type of move is you don’t have to worry about carrying two mortgage payments. The negative is you will most likely end up moving twice. An inexpensive interim option is to move in with family while searching for your next home. Others opt for flexible apartment leases. Once your home is under contract, you could start looking and bidding on homes.
In September last year, the greater Grand Rapids housing inventory started an uptick and continued for four months straight. This is the first time that has happened in the last five years or so. We went from a yearly low of 1.3 months of inventory up to 1.9 months by the end of 2016. Many were predicting the market to finally level out a little. However, from December through the end of January, inventory suddenly fell back down to 1.4 months. Last spring was a crazy market with buyers sometimes competing with 10+ offers. This year we have even less inventory than last as we lead up to the spring market. Buyers will need to be diligent, patient, and put their best foot forward in the home buying competition. Sellers have the convenience of short market times and multiple offers to choose from if the house is priced right.
If you live in Michigan and own a home, then you absolutely need to know about ice dams. Water intrusion is the number one cause of damage to homes and that damage can be very costly. Ice dams are formed when snow melts on your roof, but freezes when it gets to the eaves (the part of a roof that overhangs the walls of a building). If the ice builds up, it can form a ridge that prevents water from draining. If the water cannot drain properly, there is only one place for it to go, and that is down into your house. This can happen to any roof, regardless of age or condition. The problem lies not with the roof itself, but by heat loss through the attic due to a lack of insulation and ventilation.
Earlier this year, the spring market was a house feeding frenzy. Popular homes were receiving 5, 10, sometimes as high as 20 offers. March and April saw a housing inventory of only 1.3 months. It is too early to call for sure, but I believe this was the peak of the rising prices for the Grand Rapids market.
Over the last four months or so, we have seen the inventory levels increasing. Each month we have slowly ticked up to the current level of 1.7 months. That is still a very low level of inventory, however, the day-to-day pace of the market is noticeably slower. Homes are still selling quickly and multiple offers are common, but it is not as ridiculously competitive as it was this spring. Experts have been predicting inventory levels and price increases to level off for a couple years now. It may be finally happening.
In the last few months, the inventory level has tightened again. All the way down to 1.3 months. This is a historical low for the inventory of homes for sale in the Grand Rapids market.
Although inventory was dwindling, the number of buyers increased with the spring market. The result? Feeding frenzy is probably the most accurate way to describe the competition. If a house is priced right and in good condition, it is common place to see 5-10 offers on one property within three days of hitting the market. Open houses look like assembly lines of people going in and out. It is great to be a seller right now. Unfortunately, it is very difficult to be a home buyer at the moment. The buyers who are winning in extremely competitive situations are usually cash buyers, or buyers who have large down payments if they need financing. It makes it especially tough for first-time buyers trying to enter the market.
Great info on everything real estate.