Where is the housing market headed these days?
In June we predicted a strong market ahead for 2018 and 2019. Data shows that the trend is at pace with our forecast.
Per GRAR monthly statistics, the number of new residential listings in August 2018 has shown an uptick, increasing by 4.8%, while multi-family units and vacant-land listings have been stagnant. The low inventory has carried a positive effect on home values which have gained 14% since last year – in line with June 2018 numbers. The average home 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” – now sells for $238,773.
In Kent County numbers have been even more favorable to homeowners. Based on closed sales, home values have increased by 15.7% since August 2017, to an average sale price of $243,050.
Similarly, sales of single family homes valued at $500,000 or above have continued unperturbed, with 42 units closed in August 2018 and 264 since the beginning of the year, maintaining a consistent 4.3% share of the market.
This general tendency is sustained by the average months of inventory, which has been decreasing steadily from 2.3 in 2014, to 2.0 in 2015, 1.8 in 2016, 1.4 in 2017, and 1.3 as of August 2018.
All these indicators point to a strong and consistent market in which home values are increasing significantly. My personal local knowledge and experience align with the data. We are still observing a few multi-offer instances, although far from the double-digit number of offers experienced in spring – remember the 13, 27, 45, up to the astounding 58 (yes, you read correctly, fifty-eight) offers for a property in Grandville, MI?
Statistics and market conditions in the Grand Rapids area are consistent with Freddie Mac’s analysis. Although mortgage rates have jumped by an average 0.82% since last year and their increase will likely persist for the next two years, the real estate market will continue to benefit from low unemployment combined with solid employment rate. Home values on a national level are anticipated to grow by an average of 6%.
Hence, homeowners and homebuyers should be able to confidently sell and buy, capitalizing on their equity, and looking at a solid investment. No one can predict the future with absolute certainty. However, given all the data, if one is planning to sell there could be no better time.
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. Instead, property values follow the market. 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 6% nationally – or possibly a 14% locally.
Happy sales everyone! And yes, I am extremely contactable if need be.