What is the Real Estate Market Like in the Grand Rapids Area?
As the sunny and warmer weather arrives to West Michigan in March and April, typically the real estate market also picks up. Many people start looking for a new home.
This year will probably be no exception to that trend -- but buying a house could be tougher.
I should point out, for full disclosure, that I am a licensed Realtor in the State of Michigan. I often get asked what the market is like, and just how selling or buying a home is going in the area. Let me share a few statistics...
How Many Homes are For Sale?
Not as many as we need! As of Wednesday morning, March 9th, there were only 249 homes for sale in all of Kent County on the Multiple Listing Service®.
Think about that for a moment... Kent County is 872 square miles in size. The 2019 United States Census reported there were 255,024 homes in the county at that time. Of all those homes, where are only 249 currently for sale!
If you whittle down those numbers just a bit, and look at only houses priced between $150,000-$250,000 -- that number of homes for sales drops to just 56 homes currently on the market! (The mean average price for a home in the Grand Rapids area in 2021 was $235,460.)
What are Home Offers Like in West Michigan?
One local realtor posted on social media that she had a listing for a home with a price of $215,000. They ended up receiving a total of 70 offers on the house. They offers broke down like this...
- 15 of the loans were FHA or VA
- 59 of the loans were conventional loans
- 2 of the offers were cash offers
- 24 of the offers were priced between $215,000-$240,000
- 33 of the offers were priced between $241,000-$275,000
- 19 of the offers were priced over $275,000 (keep in mind, the asking price for this home was $215,000!)
Many of these offers also had appraisal gaps included in them. An "appraisal gap" is when the buyer agrees to bring any money needed to make up the difference between the selling price and the appraised value of the home (if the home doesn't appraise for the agreed upon price).
- 58 of the offers had appraisal gaps of $0-$15,000
- 15 of the offers had appraisal gaps of over $15,000
How Are Realtors Doing During this Time?
It's a tough time to be a Realtor. After having a tough year in 2020 due to COVID, things rebounded a bit in 2021. With such a shortage of homes for sale, some realtors are still having a tough time.
In their recent newsletter, the Greater Regional Alliance of Realtors (GRAR) said their were 2,770 licensed real estate salespersons in the organization. There were also 733 brokers. All of these people are trying to make a living selling homes. With only 249 homes on the market, that leaves 14 realtors/brokers for each home that is listed for sale!
Is it a Good Time to Sell or Buy?
It's a great time to sell! Over the last year prices continued to climb. The only problem becomes trying to find a new place. Most people like to make a smooth transition and move from their sold home into their new house. That has become tougher to do in today's market. Selling is not the problem, but you then have to try to find a new home -- and that is the difficult part. I always advise my clients to have a "Plan B". Where are you going to move to once you sell your home -- if you can't find a new place before it's time to move out?
If you are in the market to start home shopping, now is a great time to work on getting your pre-approval letter from a lender. That will be the first thing you will need to begin the shopping process. Hopefully in the next couple of weeks, we will find a few more homes hitting the market. It is still going to be very competitive for buyers. Make sure you present the best offer that you can. Unfortunately in times like these, there is not a lot of wheeling and dealing when it comes to the asking price.
Good luck! I'm here to help if I can!