In the last couple of months we've noticed some slow down on our Grand Rapids real estate market - houses are staying on the market a little longer and we have more inventory available.During the
Market slow down? - Crisis or "Bubble Bursting"?
In the last couple of months we've noticed some slow down on our Grand Rapids real estate market - houses are staying on the market a little longer and we have more inventory available.
During the year of 2018 we've had 1.1 months of inventory on the market (compare it with 3-5 months of inventory for a normal market). Starting the month of August we are having 1.5 months of inventory. It's somewhat better, and September market seems to be slower than 2018 market overall.
During spring-summer buying frenzy a lot of buyers were wondering - if this is all a real estate bubble and the prices will crash? We remember what happened in the country in 2008...
So, should we be scared? If crisis is coming? Is it a bad idea to buy real estate in Grand Rapids?
Let's have a look at the main reasons for rising prices in the last few years:
1. West Michigan is developing very well, new jobs are created, Grand Rapids is growing and more people are moving into town.
2. We lack affordable housing (under 240k), because everybody is buying and nobody is selling, no new construction under 240k.
At the same time - what were the main reasons for the crisis of 2008?
1. Banks were lending money right and left without proper qualification process. People that weren't able to afford mortgages were allowed to have mortgages, and they were buying, buying and buying, driving the prices up. Later they failed to pay their mortgages, which caused a lot of foreclosures, a lot of REO sales, a lot of bancruptcies, a lot of houses on the market when nobody was able to buy them anymore. That was happenning nationwide.Banking industry is much more heavily regulated by the government now.
2. At the same time locally, West Michigan was a less visible spot on the US map than right now. Jobs market was pretty stagnant in Grand Rapids 10 years ago, not that many people wanted to live here. It's only a few years ago major retailers, franchise owners started moving into the area following economical growth.
With this being said, we have completely different reasons for 2008 crisis and 2018 "crisis".
Economists predict certain slow down for West Michigan in the next few years - no crash foreseen. Grand Rapids is still a very strong market, West Michigan is still developing well.
Economic slow down doesn't mean we will have lower real estate prices either, because the face of Grand Rapids is rapidly(pun not intended) changing. And in five years we will be leaving in a different city.
Please let me know if you have any questions about buying or selling real estate in Grand Rapids area - I'm here to help!
Call me 616-389-0399 or email [email protected].
Jenny Upright is not quite typical Grand Rapids real estate agent. Born in Russia, she always was interested in learning about other cultures. She graduated from high school with honors and had an op....
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