Future looks bright for GR housing market
Amerinote Xchange CEO predicts millennial generation will push into home ownership.
Many signs point to Grand Rapids maintaining a strong housing market in 2017.
In a further breakdown of his national predictions, Amerinote Xchange CEO Abby Shemesh said Grand Rapids should remain a strong residential real estate sector.
“Grand Rapids will continue to see growth, housing boom, a shortage of inventory as has been the last year,” Shemesh said. “You’ll see this so long as the economy remains robust and job opportunities remain plentiful. Grand Rapids is most certainly the hot spot in Michigan and will remain that way at least through the end of the summer.”
Shemesh founded Amerinote Xchange, a direct mortgage note buyer, and he said he invests quite a bit in acquisitions in the West Michigan area and described Grand Rapids as one of the hottest markets in the nation.
Many of Shemesh’s predictions hinge heavily on one main point, the idea the millennial generation might push into home ownership. The prediction is based on early evidence millennials in their early and mid-30s began to make the transition in 2016, he said. The younger homebuyers, he suspects, will make up between 15 percent and 35 percent of the national real estate market.
“The more robust economies, like Grand Rapids, will see a higher uptick in home ownership by millennials,” Shemesh said. “The real determining factor will be how many loan applications are submitted for new homeowners in owner-occupied homes. Renting doesn’t do much for the economy, but we should see a true increase in owner-occupied homes.”
With a core rental demographic presumably shrinking because it might be more affordable to own rather than rent, Shemesh said he expects rental prices across the nation to come down — even in Grand Rapids, despite it not being as “upside down” as cities such as New York and San Francisco.
The homes millennials are moving into could cost more, driven by the national labor shortage in trade industries. Those new home price increases should hold true in Grand Rapids, but mostly in western states, he said.
Shemesh believes the price increases will push residents back out into the suburbs, especially from major coastal urban centers. The trend of millennials moving to urban centers will begin to reverse, he said, even in Grand Rapids. Midwestern cities such as Grand Rapids, however, should see an influx of population from those major coastal cities, he said.
“You’ll see a huge Midwestern boom in urban and suburban areas, and I would not be surprised if they’re first-time homebuyers if that’s the case,” he said. “Midwestern cities will see a boom, not a boom bust, but a steady growth boom where the jobs are, that’s the big caveat there. Depending on jobs out there will determine the aggressiveness of growth.”
Exodus aside, Shemesh believes western cities will continue to be the prime areas for investors, whether the investments are bricks and mortar or real estate trusts.
“We’ll continue to see steady to aggressive growth in cities like San Francisco, Portland, Seattle, Phoenix and Denver,” he said.
With interest rates set to rise, Shemesh said now is the time to sell.
“If any time is now to sell, it’s now,” he said. “It’s a seller’s market in Grand Rapids, and if someone is thinking of selling, they should consider it now but make an informed decision.”