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Grand Rapids housing market ranks as a 'best buy' in US
If you’re thinking about buying a home in the Grand Rapids market this year, Forbes thinks it’d be a good investment.
The Grand Rapids-Wyoming housing market ranks No. 11 on Forbes’ “Best Buy Cities: Where to Invest in Housing in 2014,” a 20-market ranking posted last week.
Forbes teamed up with Local Market Monitor, which pulled data for the 100 largest metropolitan statistical areas — a geographical designation used by the U.S. Census, with populations of at least 575,000 to determine the ranking of the best housing markets to invest in this year.
Markets were ranked based on population, home prices and the local jobs economy.
“Each of our Best Buy Cities have high population and job growth, relatively low home prices and are still considered under valued,” according to Forbes. “This makes them fairly low-risk investment opportunities for buyers who are smart and know not to overpay.”
The market’s investment potential was measured by comparing its “equilibrium” home price with the actual average home price in the cities.
“The equilibrium home price tracks what the average price for a market should be — if speculation, weird distortions in local income and other factors (like the housing collapse) weren’t present in the market,” according to Forbes. “The measure presumes that prices will eventually return to this level. When homes are far under the equilibrium price, investors are getting a good buy and can expect to make a good return.”
The Grand Rapids market earned its No. 11 spot, thanks to an equilibrium home price of $184,794 and an actual home price of $138,596. That’s a difference of 25 percent. The market also has a three-year growth forecast of 27 percent.
Top 5 “Best Buy Cities” for 2014
1. Fort Worth-Arlington, Texas
2. Dallas-Plano-Irving, Texas
3. Charlotte-Gastonia-Concord, N.C., S.C.
4. Nashville-Davidson-Murfreesboro-Franklin, Tenn.
5. Houston-Sugar Land-Baytown, Texas
Source: Forbes, 2013