Reading real estate headlines over the last few months, I've seen many click-bait titles that pander to people's fears about a huge housing crash and global recession. However, if you actually read the articles, it doesn't say anything close to what the headline implies. While the market has cooled this year, there is still high demand for housing and short supply.
As of stats compiled through the end of November, the greater Grand Rapids area is currently sitting at 1.6 months of inventory. See the chart below for the monthly inventory numbers since 2014. Inventory is a measure of whether the market is a buyer or seller's market. This number is determined by figuring how long it would take to sell through the current number of homes on the market at the current rate they are selling, assuming no new houses hit the market. 5-6 months of inventory is considered a balanced market. Although 1.6 months is three times the amount we had last year at the same time, this number still represents low inventory and a market that favors sellers. Homes under $300k are in especially high demand.
Many economists were speculating the market shift to take place last fall. However, interest rates remained low and demand for housing was still ridiculously high at the beginning of 2022. Starting in January, interest rates started to creep up quickly and didn't stop. After hovering around 3.0% for most of 2021, rates went all the way up to almost 6% in the matter of a few months. 4% interest rates didn't seem to faze buyers, but once rates got over 5%, they took notice. Some buyers fell out of the market that were only motivated by super low rates. Others adjusted their budgets to account for the rate hikes. The result has been a slowing of the real estate market over the last couple of months.
The spring real estate market of 2021 combined a frenzy of demand with an already low inventory of homes for sale. Never had the competition to buy a home been more fierce. So what has the greater Grand Rapids real estate market been doing since this past spring? Slowly, but surely, inventory has been notching upward. It is still very much a seller's market, but not the same crazy frenzy this spring brought.
The current inventory level at the end of September was 0.8 months. Refer to the chart below to see the changes in inventory levels over the last seven years. Inventory is a measure of whether the market is a buyer or seller's market. This number is determined by figuring how long it would take to sell through the current number of homes on the market at the current rate they are selling, assuming no new houses hit the market. 5-6 months of inventory is considered a balanced market. In March, April, and May this year, we only had 0.5 months of housing inventory, an extreme sellers market.
Real estate has been all over the news the last couple of months. Due to the pandemic, people spent more time than ever in their homes over the last year. They've had to adapt to working from home and physical distance to work became less important. Many people are wanting more space and privacy. Combine that with super low interest rates, and there is huge demand for housing right now. The Covid policy of mortgage forbearance caused even less homes to hit the market than normal. Mortgage forbearance means payments are temporarily suspended for anyone who cannot pay their mortgage with no threat of foreclosure. We've already been facing inventory issues the last few years, so these factors have only exacerbated our problem.
DIY Countertop Refresh
Could your countertops use some updating? Do you want to make a huge impact for very little cost? Painting your countertops may be the way to go.
On occasion, I have seen countertops that have obviously been painted and do not look good. As with any project, it needs to be done with quality materials and workmanship. There are many different styles to choose from ranging from granite to butcher block. My friends Matt and Kaitie decided to tackle this project in their kitchen and it turned out amazingly well.
Real estate activity often slows surrounding the holiday season and into winter, especially in areas that get a lot of snow. Many people prefer not to move in winter if they can avoid it. There are always buyers out there and our local real estate market is still very hot, but typically the winter months are not as crazy competitive as the rest of the year. Is it really a good idea to buy a home in the winter? It depends on what your personal situation and priorties are, but there are both advantages and disadvantages to buying in the winter season.
This is a guest article written by Paul Denikin with www.dadknowsdiy.com. Paul shares his knowledge to help homeowners tackle projects on their own. Thanks for your contribution, Paul!
Thinking of sprucing up your home? With a little elbow grease and creativity, you can add some personal flair to your humble abode. Not to mention that with a few simple changes, you can increase your home’s value! Here are some great ideas you can tackle yourself, and tips for knowing when you’re getting in too deep.
For the last three years, the real estate market has held steady with almost identical monthly inventory levels. In true 2020 fashion, this year isn't following suit. While 2020 continues to be a hot seller's market, the monthly inventory levels have been quite different this year.
Before getting into the nitty gritty of inventory numbers, let's look at some general information first. The number of sales is actually down 5.2% compared to last year, but volume is up slightly by 0.6%. High demand for housing and lack of inventory continue to drive up prices. The average sale price so far this year is $263,338, an 8.3% increase above last year. Interest rates have helped keep demand high. Rates are at an all-time low, and are currently about 2.9% for 30-year loans and 2.5% for a 15 year.
This is a guest article written by Patrick Young with Ableusa.info. Able USA provides lots of valuable resources for people living with disabilities. Thanks for your contribution Patrick!
Buying your first house is a landmark moment. It’s also a major investment, so you want to make sure you spend your money wisely. Finding an affordable home if you have accessibility needs can be extra challenging. According to Pew Research, Americans with disabilities earn less, with a median income of $21,572 compared to the $31,871 earned on average by those without a disability. However, by teaming up with Lisa Vanderloo, and with some effort and financial savvy, you can find a first-time home you love — and can afford. Follow these tips for first-time buyers.
Michigan Real Estate and Covid-19
**Update: As of Thursday, May 7th, 2020 real estate is back to work with new safety restrictions**
Since the governor extended the stay at home order, it will be a while before we get back to functioning normally. If you were planning to buy or sell soon, you are probably curious about how the Coronavirus pandemic has affected real estate.
Real estate agents are not allowed to travel for work and can only work remotely. Buyers looking at homes is considered non-essential travel. This means no meeting clients in person and no looking at houses. The good news is that inspectors, lenders, and title companies are still functioning normally, aside from modifications for proper social distancing. Transactions in process had minimal interruptions as long as buyers were still working. Layoffs have caused some problems though.
Great info on everything real estate.