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.
I'm expecting the inventory to continue to climb modestly. We will still be low on supply of homes, but relative demand is expected to wane as interest rates creep higher. It will still continue to be a seller's market for the foreseeable future, but the rate at which prices are increasing will slow down. So far in 2021, the average sales price is $293,949, up 14.8% from last year. Interest rates are currently sitting around 3.25 for a 30-year loan and 2.5 for a 15-year. Rates are expected to be a full percentage higher by 2023.
Overall, the inventory of homes has been steadily climbing the last few months and the extreme competition of the spring market has lulled a bit. If you've been a buyer waiting to jump in, now is a better time to enter the market than this past spring due to less competition. If you are a seller, homes are still selling quickly and the demand for housing will remain high over the next few years.
Related Article- The Pros and Cons of Buying a Home in Winter
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