Like most places in the country, Michigan real estate has been a seller’s market in the past few years. Cities in Michigan like Grand Rapids and Livonia are some of the hottest real estate markets in the country.
As we head into the last quarter of 2019 and look forward to 2020, you might be wondering what to expect in the Michigan housing market in the coming year. Here are 3 trends to expect.
1. Fewer Entry-Level Homes
Overall, there are fewer entry-level or starter homes in Michigan. While the definition of starter home varies, it generally means a home priced less than $225,000.
Across the state of Michigan, fewer starter homes are being built. Combined with the lack of homes on the market overall, this makes it difficult for young and first-time buyers to find homes that they can afford.
Starer homes generally have a low profit margin, so real estate developers aren’t building many of them. Instead, they are opting for larger, more expensive homes that will bring them a greater profit.
Commercial building loans and the raw materials needed for building are increasing in price as well. This means that builders are building fewer homes at a time.
The starter homes that are on the market often go quickly and result in multiple offers, bidding wars, and selling prices over the list price.
2. The Michigan Real Estate Market Will Slow, but Remain Steady
Nationwide trends suggest that housing markets will start to slow down, prices will stabilize, and the market will shift a bit back towards buyers. While it will slow down, it’s expected that the market will remain steady.
It is certainly not expected to return to 2008-2011 levels, where homes sat on the market for months, hardly anyone was buying a new home, and home values were depreciating as much as 9%.
Experts expect that the housing market in much of Michigan will slow in the coming months and in 2020, but will stabilize and grow at a more normal pace, rather than the extreme increases in housing prices that the past few years have seen.
3. Novi Continues to Be One of the Fastest Growing Cities
The city of Novi has seen consistent population growth since the 2010 Census. This is due to a thriving retail, restaurant, and lifestyle scene. Novi is family-friendly, has safe neighborhoods great for kids, excellent schools, and many professional opportunities.
It’s also one of only two cities to be included in Money Magazine’s list of the best places to live in the US. It’s no wonder that Michiganders and those moving from out of state are flocking to Novi.
Looking to the Future
If you’re planning to buy or sell in the last part of 2019 or 2020, don’t fret. While the Michigan real estate market might not favor sellers as much as it has in recent years (while putting buyers in a tough position), it’s not expected that it will massively shift in the other direction either.
The good news is that sellers will likely continue to sell their homes in a reasonable amount of time and that buyers will have more options to choose from and may be able to avoid bidding wars.
Whether you find yourself in a position to buy or sell in the coming months, keep us in mind to guide you in all of your real estate transactions. Contact us today to learn more about the real estate services we can provide you.