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Michigan Housing Market 2024 – Forbes Advisor – Forbes

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Like most of the country, Michigan experienced a red-hot real estate market during the pandemic as people reallocated funds to housing and took advantage of low interest rates. Now, with rates up, fewer people are selling their homes. That has reduced inventory but not prices, as buyers compete for fewer properties.

The Michigan housing market isn’t the same everywhere, though.


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“Everything is a little better here in West Michigan than in the rest of the state,” says Rick Seese, a 47-year veteran of the industry and an associate real estate broker with Greenridge Realty in Lowell, Michigan.

Meanwhile, on the state’s eastern side, there are pockets of hot growth in some Detroit neighborhoods while others have seen prices stagnate or fall.

Current Housing Market in Michigan

Across the state, affordability continues to be an issue for many homeowners and potential homebuyers.

Michigan’s Statewide Housing Plan, published in 2022 by the Michigan State Housing Development Authority, notes that home prices increased 84% between January 2013 and October 2021. That compares to a national average of 48% during the same period.

The plan also notes that the average number of building permits issued for new construction from 2016 to 2020 was less than half the average number issued from 1986 to 2006. That means there doesn’t seem to be a housing boom in the works to provide more inventory and alleviate some pressure on prices.

Michigan Housing Trends and Stats

Despite fewer listings in Michigan, buyer demand continues to push sale prices upward.

“[Buyer demand is] down slightly from last year, but we continue to have double digit growth in sales,” Seese says.

However, that growth hasn’t happened evenly across the state. For instance, rural areas such as those in the central lower peninsula and upper peninsula aren’t seeing the same level of housing demand that’s taking place in the Grand Rapids area. And rising prices, along with higher mortgage rates, may be squeezing some first-time home buyers out of the market entirely.

Prices Continue To Climb in Parts of Michigan

The most current statistics available from the industry group Michigan Realtors comes from August 2023. It found that, across the state, the average sales price in August was $291,186—a 5.09% increase from a year prior.

However, prices varied widely across the state. For example, the greatest year-over-year gains occurred in the Central Michigan region, near Mount Pleasant. Average sales prices there jumped 29.74% from $172,665 to $224,020 in August 2023.

Other areas with the highest year-over-year increases in sales prices, as reported by local Realtor associations, include the following:

  • Manistee County. 24.91%
  • Grosse Pointe. 20.64%
  • Battle Creek. 20.56%
  • St. Clair County. 17.88%

Meanwhile, properties in Huron County—located on the state’s northeastern side along Lake Huron—saw the largest drop in prices year-over-year. The local Realtor association said sales prices there were down 27.91% compared to the previous year. Other local associations reported the most significant sales price declines in these areas:

  • Detroit. -15.90%
  • Emmet County. -12.22%
  • Bay County. -6%
  • St. Joseph County. -5.19%

Detroit Neighborhoods See a Resurgence

Housing prices in Detroit are significantly lower than in other parts of the state. In August 2023, the Detroit Board of Realtors reported an average sales price of $102,947, the lowest in Michigan.

A 2023 report from the nonprofit think tank Detroit Future City notes the city’s housing market has been in decline for 50 years, but some neighborhoods have seen median home sales prices rise dramatically over the last decade. The report, which utilizes data from 2012-13 to 2020-21, found that the following census tracts saw the highest median price increases over that same period:

  • North End/Milwaukee Junction. 3,398% from $3,503 to $122,500
  • Core City. 2,233% from $3,000 to $70,000
  • Wildemere Park. 1,733% from $6,300 to $115,500
  • North Lasalle. 1,718% from $3,850 to $70,000
  • Islandview. 1,135% from $4,250 to $52,500

On the other end of the spectrum is the Gratiot-Findlay neighborhood which saw median sales prices drop 78% from $134,512 in 2012-13 to $3,000 in 2020-21, according to the same report.

First-Time Home Buyers, Second Home Buyers Sitting Out

As prices rise, Seese thinks affordability will be a problem for first-time home buyers. That seems to be a trend nationwide as the National Association of Realtors found that first-time home buyers made up only 26% of buyers in 2022, the lowest share ever recorded by the association.

More specific to Michigan may be a decline in the sale of second homes. The National Association of Home Builders reports that Michigan is one of eight states with half the nation’s second homes. That’s thanks in part to its many lakes and waterways. In six Michigan counties, at least half the housing stock is second homes.

Statistics about second home sales aren’t as easy to come by, but Seese says he sees a slowdown. Buyers in higher income tiers are usually those in the market for vacation homes, and they aren’t spending as readily as in the past given current economic uncertainties. Those who are buying typically want to stay within an hour’s drive of their primary residence, according to Seese.

Michigan Housing Market Predictions

As for what the future holds, Seese doesn’t think current price increases indicate a bubble, but housing prices should begin to level off. Inventory is likely to grow as pending sales decrease and that may help tamp down prices.

Heading into the fall, student loan payments resumed in October, which could result in some younger households opting out of homeownership for the time being.

The United Auto Workers (UAW) strike, initiated in September, could also impact state home sales. According to a University of Michigan report, Michigan has over 66,000 UAW workers at Detroit Three automakers facilities—the most in the nation. Depending on the outcome of the strike, workers could see a significant boost in income, which could lead many to consider buying or upgrading their homes.

Should You Buy or Sell in the Michigan Housing Market?

According to real estate brokerage firm Redfin, there were 33,830 homes for sale in Michigan as of September 2023. That’s a 14.7% decline from the previous year and represents a two-month supply of inventory.

For home buyers, that means fewer homes are on the market, and perhaps for that reason, nearly 40% sell for above their list price. Redfin has identified these communities as being the most competitive in the state:

  • Huntington Woods (Detroit)
  • Jenison (Grand Rapids)
  • Garden City (Detroit)
  • Westwood (Kalamazoo)
  • Hudsonville (Grand Rapids)

Fewer choices and higher prices mean now might not be the best time to buy, but sellers may want to take advantage of the opportunity to earn top dollar for their property before the market completely cools. The only wrinkle to that plan would be what happens after you sell.

“If you’re going to be selling in a hot market, you’re going to be buying in a hot market,” Seese says.

One exception might be buying a second home. With the market for vacation homes softening, these properties may be more affordable than they have been in the past.

Regardless of whether you want to buy or sell, keep in mind that all real estate activity—both listings and sales—typically slow during Michigan’s winter months before ramping back up again in the spring.

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