So, what is causing this pull to our city? The answer is quite simple. Not only do we have the fastest growing economy, according to Headlight Data, but Grand Rapids is ranked no. 1 in our country for job growth. People are attracted to our area for the opportunity. Along with a rapidly growing medical sector and countless top-rated universities, the wide attraction to our city is a no-brainer.
Of course, this type of growth does not come without a few ramifications. The area’s real estate market has changed drastically over the past decade. While many view the market as healthy- thriving even- there are concerns about how we will be able sustain the low housing inventory that we are facing. In a healthy market, it is good to see 5-6 months of inventory, which means is if no other homes were to hit the market after today, it would take 5-6 months for all current homes listed to sell. Our inventory now is close to 1.5 months, and has dipped even lower in some areas. This low inventory has caused a spike in home values across the board.
With values rising, homebuyers (specifically first-time buyers) are struggling to find the homes they want for the price they believe is fair. The competitiveness in our current market is making it much more difficult for anyone without very strong financing to win in multiple offer situations. On the other end of that, sellers have the opportunity to sell their homes for absolute top dollar, and in many cases, are making a great profit on previously purchased real estate. For homeowners looking to move out of the area, downsize, rent, or build, selling in this market could potentially make them a great amount of money. We do have to keep in mind that both rental and building prices are up right now, which may offset any profit made by selling.
While we do hope to see the market even out a bit, it is not going to happen overnight. In the meantime, buyers need to be competitive, but buy with caution. We know that values are up, but it is important to not pay more than a house is worth, and to keep in mind resale values. It IS possible to find a good home, for a good price, in this seller’s market- so long as you make educated decisions throughout the process. But with the continuing growth in Grand Rapids, this is without a doubt a phenomenal area to invest in and call home.