“Should I buy or should I sell in the Grand Rapids area these days?”
This is a question I hear often, to which I try to answer with a combination of knowledge, experience, and data. Especially data. Because, unlike the formers, it is objective. In fact, nothing like numbers can offer a clearer picture of how the real estate market is behaving these days.
For starters, did you know that GRAR provides free monthly statistics, divided by county? For example, if we wish to learn what is happening in May 2018 in Kent County we’ll discover that residential listings are up by 1.8% compared to a year ago, while multi-family and vacant land listings are down by more that 20%.
When we look at pending or closed sales, statistics show that the number of transactions is below last year’s levels, but volume is increasing. Hence, here is one piece of information that will make all homeowners happy, no matter how we look at: values are increasing, significantly.
In details, based on closed sales the average home value rose from $219,063 in May 2017 to $240,557 in May 2018. That’s a gain of 9.8%! The year-to-date also rose from $206,723 to $221,408, with a gain of 7.1%. When we take in consideration pending sales, the gain appears even stronger: from $213,602 in May 2017 to $243,700 in May 2018, for a gain of 14.1% – and a 9.5% for the year-to-date (ok, I’ll spare you a few extra numbers.)
REALTORS® regularly receive bulletins and updates. Therefore, to complete the picture with more data from the GRAR weekly newsletter (specifically the June 18, 2018, issue) in the Greater Grand Rapids Metropolitan Area – which includes “Kent County; Georgetown and Jamestown Townships in South East Ottawa County; Ionia County; the six Townships in North East Allegan County; and the North half of Barry County, including all of Gun Lake” – the average sale price of a single family home is now up 7% compared to last year, at $217,175. Also, based on pending sales, the average number of days on the market is 44 for multi-family homes, and 22 for single-family units.
The data seems to point to a strong market in which the trend is steady and home values are increasing. My personal local knowledge and experience align with the data. For example, we are still observing multi-offer situations. For fun fact lovers, I have direct knowledge of listings which received 8, 13, 17, 23 and comparable number of offers. I heard from a colleague of a listing with 45, which seemed a record, and then just six days ago of one case of… 58 (yes, you read correctly, fifty-eight) offers for a property in Grandville, MI. But wait: the same day I spoke to an agent who had planned to write the 59th!
To corroborate these findings, Freddie Mac’s analysis forecasts a 3% home sales growth in 2018 and a 2% in 2019, notwithstanding the increasing mortgage rates. Alongside, home prices are expected to grow by 7% in 2018 and a more moderate 3.1% in 2019.
Finally, the general answer to our initial question, the one we have been waiting for while reading this entire post is: yes! You should be able to confidently buy and sell. No one can predict the future with absolute certainty. However, given all the data, if you are planning to sell there could be no better time. In the GRAR area inventory is at a mere 1.2 months, and properties are still receiving multiple offers – we’ll touch on this specific topic in a later post.
If you are a buyer, the market might seem intimidating right now, but postponing your purchase may not be the best approach. Prices are going up steadily, interest rates are also increasing, while borrowing limits typically do not. The good news is that if you buy today you’ll have secured a better interest rate, and by next year your investment will have yielded an average 7%.
Happy sales everyone! And yes, I am extremely contactable if needed be.