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.
It will be interesting to see how things pan out for the rest of 2016 and especially leading into the spring market of 2017. If inventory levels continue to increase, it could still take a long while before we hit a balanced market. Once we reach a balanced market, we should expect to see more slow and steady growth in prices. It may be more like 3-4% per year, rather than the 8% increases we have seen the last few years.
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