In lieu of a house of the month, we’ve decided to take a brief over-view of the real estate market here in the Grand Rapids area over the last five years … and to celebrate Cascade Living’s fifth anniversary.
Five years ago, we were slowly stumbling out of a very serious recession, which didn’t really start to turn around until 2013. Most of us remember this, not fondly. I acquired my real estate license in 1998 and have been full time since then. The span of 2009-2011 was fairly miserable for anyone in the real estate world, with a few exceptions (individuals who were very liquid). The number of foreclosures and short sales was astonishing; nearly 70% of all transactions (Grand Rapids Association of Realtors) fell into one of these categories. Almost every transaction took forever to close since the banks largely had no idea how to manage their now massive inventory of foreclosed properties. Banks from Florida managing properties in Michigan during the winter months, for example, not knowing that such homes need to be winterized. Otherwise, you end up with busted pipes, water flowing between walls, and sewage filling up basements. Really. It was a nightmare. And sellers who lost all equity would have to come to their closings begrudgingly with money, many times also with no place to go.
Since then, we’ve seen an unprecedented boom. The values have shot up at remarkable rates, in many cities, eclipsing their pre-re-cession highs. Some properties in some locations of Grand Rap-ids saw increases of 25% within just a single year! Average in the U.S. right now is just over 8%, and Grand Rapids’ average is about 10%. Listing inventory currently sits at 1.2 months, meaning,
if nobody lists their home in the next 1.2 months, all homes on market would be sold and there would be zero listings. “Normal” markets usually have listing inventories of at least 60-90+ days. Obviously, that depends on price range, but this is just a ballpark. And it’s not at all uncommon to have multiple offers on a prop-erty. I’ve had listings with up to seven offers, but I know many other brokers who have had 20+ offers to review. One associate of mine had something like 31 offers!
Rentals are also hard to come by … and not cheap! In 2011, the average rent in the U.S. was just over $1200/mo. Now, it’s $1450+ (Grand Rapids’ average rent is around $1350/mo.). The high cost of rentals should be pushing new home buyers into a purchase, especially with continuing low interest rates, but the inventory is about half what it was in 2012, and as I noted before, those buyers are often competing with many other buyers.
What are some things a buyer can do to increase their chances of a successful purchase?