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West Michigan real estate market poised for another good year in 2020
2019 was a banner year for real estate in West Michigan.
Sale prices continued to rise in nearly all categories and locales. Demand from buyers outpaced the supply of available housing stock. Underpinning all of this is the strong West Michigan economy and job market.
Here are some statistics year over year (2018 vs 2019):
For all of West Michigan (the broader MLS)
- Units closed were down 1.2%
- Closed sales volume was up 4%
For the greater Grand Rapids area
- Units closed were up 1.1%
- Closed sales volume was up 8%
As you can see, the greater Grand Rapids area was particularly strong, and this translated into an increase in the median sales price in Grand Rapids of 8.3% year over year.
So, what can we expect in 2020?
As an election year, the U.S. economy will continue to march into unprecedented territory for growth (when will it end?), and the global economic picture will remain unsteady in many regards.
Despite these potential headwinds, we see another strong year in 2020 for West Michigan real estate.
Here are a few reasons why:
Inventory is stabilizing
Toward the end of 2019, we witnessed a slight year-over-year uptick in the number of homes becoming available on the market — good news. We anticipate that while this turn will not completely cure the low housing inventories the market has experienced over the last few years (demand remains very strong), it will help the market to expand in terms of overall homes sold this coming year.
New homes will be built
New home construction is expected to be up this year, albeit modestly. We anticipate this increase also will lead to more existing homes coming to market, creating space for first-time and move-up buyers in the market.
Interest rates remain at historic lows
Most indications are that interest rates (on a consumer basis for mortgages) will remain historically low this year, similar to last year. These low rates mean buyers will feel the purchasing power of a “good rate” environment and a monthly payment that is within their grasp.
It’s true that every market has its challenges.
In this current market, low inventory, multiple offers on listings, attention to affordability and an ever-increasing pace of activity are all challenges that will need to be met by the real estate community in 2020.
But, in the long run, these are good challenges to be facing, and we can face them with confidence.
Buoyed by a strong local economy and steady growth nationally, we can look forward to 2020 being another good year for West Michigan real estate.