Grand Rapids Housing Market Trends

By
Real Estate Agent with Five Star Real Estate

Recently the Grand Rapids Association of Realtors released their data for 2015 GRAR Home Sales Report and Update. This is one way to look into the future if you know what has happened in the past. If you don't know the numbers for Grand Rapids homes for sales, sold, inventory and months of supply then it makes it very difficult to understand what could happen in the future. You may be asking yourself could the real estate bubble burst in have been predictable? We'll take a look back at 2005-2006, when I think the bubble started to burst in Grand Rapids and West Michigan.

Ok lets start by looking at the statistics for 2015. The Average Days on the Market for residential sales were 105 days. Total units sold were up up 5.3% over 2014. Here is some really great news, the average home sale rose 8.9% over 2014. the average sales price in the Grand Rapids area is now $177,767. Remember that figure because I'll be referring back to the figure. The biggest segment of home sales happened in the $100,000 to $179,999. That segment of sales totaled 43.2% of the 2015 sales in Grand Rapids. For 2015 the Average Months of Inventory was 2.5 months. Again this is an important figure as we move forward so keep it in mind (that's why I highlighted it). I will attach the statistics showing what has transpired in the last 18 years.

The Number of New Listings submitted to the MLS really tells the story. Notice in 1997 the number of listings was 25,218 but when the Grand Rapids Real Estate Market hit 2005 that number jumped to 31,862. The next 2 years those numbers continued to rise. The Number of Homes Sold goes back to 1998. In 1998 there were 10,262 homes sold in Grand Rapids. Then in 2001 the housing bubble started to take shape with 11,033 sales. Notice in '03, '04, '05 home sales were above 13,000. 2006 showed a drop of 2000 home sales. In 2008 and 2010 sales were under 10,000. There was a jump in 2009 but I believe that was due tho the government trying to stimulate the real estate market with a first time home buyer tax credit of $7500. When that ended in 2010 the market crashed to 9066 home sales. Those are the raw and unfortunate numbers for the number of homes that sold, now lets look how that affected the dollars involved in the Great Recession.

Let's take a look the the Average Home Sale Price for the Grand Rapids Market. In 1997 the average home sale price was $112,125. Fast forward 9 years to 2006 and the average home sale price jumped to $163,924, that's almost a 50% increase in appreciation in just 9 years. Between 2006 and 2007 the bottom fell out of the real estate market. The average home sale price dropped to $107,546, that is pre 1997 home sale prices. Now you can start to understand why there were so many homes underwater with their mortgages and why they couldn't sell their homes due to the fact that it wasn't worth what they bought it for. Look at the Average Home Sale Price for 2015, $175,562, that's over a 68% appreciation in just 6 years.

What's driving this massive appreciation? Hopefully the answer is simple...lack of inventory! To understand you need to understand the how the Number of New Listing Submitted to the MLS and Average Home Sales go hand in hand. In 2006 there were 34,500 homes for sale on the Grand Rapids Real Estate Market and 34,262 in 2007. By 2010 the number of homes for sale dropped to 26,374 and home prices started to go back up. Starting in 2011 there were 16,378 homes for sale and in 2015 there were only 15,872 home for sale. In the same time period home prices jumped back above the pre real estate market burst. The average home sale in 2015 was $175,562. A total of 2.5 months Average Months of Inventory in 2015 vs 13.3 months in 2008. Lastly, the Impact of Months of Inventory on Pricing will show why we were on such a wild ride for home prices appreciation and depreciation. For 5 years  (2006-2010) the Grand Rapids Market showed double digit depreciation. From 2012 to 2015 we've enjoyed high single to double digit appreciation.

In conclusion, do I think we're in for another housing bubble burst, hmm maybe. What caused the last burst? First things first, looking at the number of homes for sale is very low and with the new laws that were passed to prevent another real estate catastrophe. I don't think we are headed of another melt down, at least of 2016. But look at the double digit appreciation over the last 5 years. Once people realize they can cash in on the appreciation there could be a run on increasing number of homes for sale.  As for the Great Recession and what caused it, well I guess that depends on which economist/politician you listen to. It could have been the repeal of the Glass-Stegall Act of 1933, the number of exotic loan programs that were born out of the repeal of Glass-Stegall Act, the slowing of the economy, the number of fraudulent loans, ect.

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Real Estate Market Trends
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Michigan Kent County Grand Rapids
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grand rapids mi homes for sale
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Rainmaker
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David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation
Colorado Real Estate Advisers LLC - Colorado Springs, CO
Relocation, Luxury & Lifestyle residential

Hi Doug,

Welcome to ActiveRain.

I remember when I was starting out. I couldn’t imagine ever writing hundreds of posts.

There was so much I didn’t know. Surely I didn’t really belong here.

Well let me encourage you to take one step at a time and hang in there.

I’ve made good money via ActiveRain and learned a lot. But the best thing that ActiveRain has done for me is in this post.

http://activerain.com/blogsview/4797718/the-best-thing-activerain-has-done-for-me-

Good luck, let me know if I can help.

 

David Gibson
Broker / Owner Colorado Home Sales LLC

Jan 26, 2016 04:21 AM #1
Rainmaker
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Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Doug,
I think most people appreciate good statistics and an explanation of what they mean. 

Welcome to the world of Active Rain blogging.  It is an extremely valuable platform to connect with other agents and potential clients.  I recommend you check out the "Resources" section and click on "Getting Started".

Jan 26, 2016 05:34 AM #2
Rainmaker
1,294,987
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

And, congratulations on becoming a Rainmaker.  Most agents don't understand the value so early in their blogging.  

Jan 26, 2016 05:35 AM #3
Rainmaker
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John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Doug Hansen Welcome to the ActiveRain community. Excellent Grand Rapids market stats.

Jan 26, 2016 09:02 AM #4
Ambassador
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Nice mkt report Doug!

Welcome to Active Rain, looking forward to reading many more of your posts, let me know if there is anything that I can do to help as you get started here.
Bob

Jan 26, 2016 01:16 PM #5
Rainmaker
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Joy Bender
Compass - La Jolla, CA
San Diego Partner - The Private Client Network

Hi Doug very indepth detailed report for your area and great insight.  Welcome to active rain. 

Jan 26, 2016 02:31 PM #6
Rainmaker
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Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

Welcome to ActiveRain! This is great information for those in Grand Rapids who may be thinking of selling or buying.

Jan 26, 2016 08:01 PM #7
Rainmaker
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Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

Good morning Doug Hansen, That is a great post with very helpful information for buyers and sellers in Grand Rapids.

Jan 26, 2016 08:35 PM #8
Rainmaker
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Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

By the way, welcome to Active Rain, congratulations on your first blog post and good luck with your business!

Jan 26, 2016 08:35 PM #9
Rainmaker
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Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

Good morning, Doug Hansen buyers and sellers in the Grand Rapids area should certainly appreciate this detailed and well researched market report.... and if they're thinking of buying and/or selling, they would be wise to call you for guidance....

Jan 26, 2016 10:04 PM #10
Rainmaker
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Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

and welcome to ActiveRain....it's a great platform to learn, share, market and network....and I hope you enjoy all of it as much as I have over the past 6 years here....

Jan 26, 2016 10:05 PM #11
Rainmaker
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Tony and Suzanne Marriott, Associate Brokers
BVO Luxury Group @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Welcome to Active Rain!  As REALTORS who have been here for more than 9 years, it's well worth it!

 

Jan 26, 2016 10:08 PM #12
Rainmaker
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Joan Dickie
Keller Williams Premier Realty - La Crosse, WI
Keller Williams Premier Realty

Great analysis of your market.  You really know your stuff!  Welcome to Active Rain blogging and I look forward to more of your posts.

Jan 27, 2016 01:34 AM #13
Rainmaker
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Mery Fernandez Empire Network Realty Luxury Brokerage
Empire Network Realty INC. - Orlando, FL
The Rise of An Empire, Let's Build Yours!

Hi Doug! Welcome to the world of Activerain, may your blogging  create a whole new chapter in your Real Estate Career.

Jan 27, 2016 11:33 PM #14
Rainmaker
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Sharon Kowitz
CRS-SRES-ABR-GRI-E-Pro-CREN Fonville Morisey Cary, NC - Cary, NC
Cary, NC Relocation Specialist ~ Buying or Selling

Welcome to Active Rain! Congratulations on your first post. It was very informative. I can't wait to read more from you!

Jan 28, 2016 01:36 PM #15
Rainmaker
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Letitia Stevenson
BHHS Fox & Roach | www.DelawareValleyRE.com - Greenville, DE
Listing Agent DE/PA/MD, Digital Marketer & Coach

Hi Doug, Thanks for Sharing and Welcome to the Rain! ActiveRain is a great place to share your knowledge, expertise and thoughts, as well as network and learn so much from the vast pool of talent already onboard. I look forward to reading your upcoming posts. If you would like to connect with me on ActiveRain, please subscribe to my blog! Welcome Aboard, Happy New Year and Much Success! 

Feb 05, 2016 03:31 PM #16
Rainmaker
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Robert May
Robert W May - Lethbridge Real Estate - Lethbridge, AB
Real estate consulting

congratulations on jumping right in with your first blog post.  Blogging here is great for business, directly and indirectly.  Keep up the great work.  Robert

Feb 25, 2016 09:17 AM #17
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Doug Hansen

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