Archive | New Year

New Year – A Great Year for Grand Rapids?

It’s 2008 and the question I keep hearing from people is…”Will 2008 be better in the real estate market than 2007? ” My answer is:

I do believe that 2008 will be a solid year for West Michigan and the Greater Grand Rapids Area Real Estate market. Why:

1. Rates just dropped again. Around 5.75 for a 30 year fixed currently. This is a tremendous rate that we have not seen for over 25 months. This often means that buyers are able to purchase their new home for the same monthly amount they’re renting. That combined with point #2 below I believe will assist us here locally.
2. Pent -up demand. There are a lot of buyers that have been waiting for “the bottom”, the “perfect home” the “best deal ever”, etc. It’s here. Sellers realize more than ever that they have a lot of competition. Because of this they are pricing their homes VERY well. Additionally, the buyer is able to sort through an ample selection of foreclosed homes and corporate relocation homes that sell at an extreme discount. Buyers also realize that these available foreclosures are not all the distressed properties of the past, but rather a lot of them are in good condition and in some cases only need paint!
3. West Michigan is booming….note the key word WEST. We hear candidates speaking of economic woes and “one state recessions” and assisting in putting Michigan “back on track.” In large part they are referring to our state as a whole not the pocket of economic prosperity we on the West side have spent several decades creating. Now is our time to shine and our downtown Grand Rapids is booming! Could the area benefit from a more stable economy? Sure, but we’re doing well on our own due to the foresight of our community leaders, the strong desire to put money back into the community, and our ability, to woo, capture, retain and build upon past, present and future economic forces. Due to the efforts of West Michigan we are seeing a revival of the downtown residential market and a heightened awareness of the downtown area. Additionally our areas like Heritage Hill have been featured in such nationally known papers as the New York Times – touting our amazing community and the spectacular “deals” that can be found here. Lastly, due to the medical boom downtown our area is expected to acquire 7 new jobs for every Doctor recruited to the area. As a result many of the suburbs will be seeing a rise in demand which will assist in flushing out some of the inventory currently on the market.
4. It’s on SALE! Investors are taking note of a tri-fold phenomenon that will greatly assist their ability to make money now and in the future: 1. Rates are low (not just home owners get to capitalize on low rates but investors too) This helps them to establish low fixed costs 2. Properties are at extreme lows. Investors note that the current market is lower today than it was 12 months ago. Due in large part to the high volume of homes on the market, coupled with banks owning vacant rental properties (something a bank wants to dump as quickly as possible.) 3. More renters coming on the market. The Sub Prime Lending fall out has and will continue to make it harder certain would be homeowners to get a loan. As a result these potential buyers end up staying renters for a while (often 18 months or more.) Additionally, the high volume of foreclosures have lead to a higher number of past home owners who are now renters. The last note on section 4 is that investors realize that as the nation’s economy improves the interest rates will increase. As interest rates increase it leads to rental increases because fewer renters can afford to purchase homes when the mortgage rates are higher. So for the investor, they are buying now to lock in low costs with the expectation that rents will increase.

Have questions about how the market is affecting your situation? Feel free to contact us and we’d be glad to talk with you about it!

Happy New Year!