The Housing Market in Michigan
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By :
Allen Wright
Submitted
2008-08-14 09:16:12 |
More sellers than buyers. Does that sound familiar? It should, because that's what almost every realtor in Michigan is telling their clients. The housing market is saturated with houses that are for sale in all price ranges, sizes, location, and with every feature you can think of. And the problem is that no one is buying.
There are those who think the end is in sight, and point to indicators like the number of houses listed falling, and even small bubbles of real estate sales jumping back to near-average levels. It's basic supply and demand. The terrible economy has affected the demand side of the equation drastically over the past several years. A bad business climate causing companies to move out of Michigan has resulted in fewer people looking to buy houses. Add on that the increasing economic demands of today's market (think food, gas, heat, electricity), and you have the perfect conditions to affect one of the most important variables in the housing equation: demand, or the ability to buy a house.
Next, look at the supply side of the equation. People are trying to leave Michigan because they can't make ends meet or find jobs in general. That means they probably have to unload a house, unless they rent an apartment or a rental house. Add that to the number of new spec houses that builders are putting up in the ever-increasing build-sell cycle, and the supply of houses is very high. New listings are through the roof. And don't forget houses that are being foreclosed on and listed by the bank at cut-rate prices. Those don't help the home prices maintain, or grow at all.
The conditions that we're seeing in the western side of the state so far are looking good compared to 2007. There has been a 7% increase in existing home sales, and new home construction ahs slowed down considerably. The last indicator of a upturn in the market follows this, that being competitive offers. What we mean by this is that people are trying to outbid each other for properties, something that is a cumulative indicator of increased demand, decreased supply, and better economic conditions.
Plus, if you look at any newspaper in the state you're likely to see a story about rising gas prices, companies shutting down or outsourcing, and the impending economic recession. Those types of stories don't make people want to run to the bank and take out a new loan for a home, or even venture into the market and change the reality they know. People almost universally fear change, and changing where and what you live in is a pretty big one. |
Author Resource:-
Allen is a part time real estate investor who follows the housing market in Grand Rapids. Look for more information on Grand Rapids homes for sale here.
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