Michigan's 2025 real estate market is now taking shape.
Let's survey the state ahead of home-buying season.
The state has seen its highs and lows in recent years. Two key issues have been supply and affordability.
West Michigan has grappled with sky-high demand, while supply has remained stubbornly low.
Industry insiders insist it is simply a matter of time until the housing dam breaks. So when will that be?
Grand Rapids is a region on everyone's radar. The city claims an average home price around $320,000 with a forecasted increase of 6-8% annually through 2025 due to ongoing demand. To add, Grand Rapids has a strong local economy.
Holland is another area that's in very high demand, with an approximate growth rate of 7% over the past several years,
Clearly, there is reason for optimism around the Mitten. The prevailing theme is one of growth.
The Great Lakes State should see great gains, with Southeast Michigan set to take a big step forward.
Realtor.com predicts home sales in Metro Detroit will grow 2.4% year-over-year and prices to increase about 6.2% from last year.
Many feel that residential real estate markets across Michigan are about to boom. From Crain's Detroit Business:
"Much of the blame for limited existing housing inventory [in Michigan] has been blamed on the historic low rates [of] 2020 and 2021 during the COVID-19 pandemic. Millions of Americans bought or refinanced homes at rates in the 2%-3% interest rate range and now see no financial upside to letting go of their homes, or more specifically, their low rates."
Other economic indicators point in this direction as well.
First, household incomes are predicted to outpace inflation in the months ahead, which only increases the chances of market activity.
And 30-year fixed rates are expected to hit 6% this year — the lowest in two years.
Some say that's a conservative estimate. Some believe rates will dip below 6%, which could set off a flurry of market activity in Michigan.
In reality, half a decade has passed since rates were at those historic lows. Like a number of things we've witnessed post-pandemic, people may be getting used to 6% as a "new normal" rate.
Stay tuned.