Looking back to a year ago from now can make your head spin a bit. As of June 1, 2020, real estate in West Michigan was just beginning to see some restrictions lifted with the rescinding of the "Safer at Home" order in Michigan.
Most importantly, homes could once again be shown in-person, though in limited numbers and with social distancing in place. We've come a long way since then, and while there have continued to be some ups and downs, things have definitely gotten closer to business as usual.
Some adjustments to the way we do business in real estate will likely remain—and that's a good thing. Precautions for the health and safety of clients and agents, more flexibility around virtual home shopping, video communications, and electronic transactions are all positives that are becoming part of our new normal.
Of course, the big news in real estate this year has been how "hot" the market is. During a tough economic year, the housing sector was one of the few that thrived through 2020 and into 2021. Yet, our fast-paced market poses its own challenges—particularly for homebuyers. While experts do expect these trends to continue, there is hope that things will begin to settle down a bit. Here is some of what we are anticipating in the real estate space in the coming year.
In a year of uncertainty, many potential home sellers decided to hold off. Now as more of us are vaccinated, cases are down and restrictions are lifted, more sellers are ready to make that move and put their home on the market. Looking broadly at all of West Michigan, we've seen an increase of 15% in new listings hitting the market since April 30, 2021. While they are still moving quickly (43 Days on market on average in Grand Rapids), there are more homes becoming available, and buyers are starting to have more options.
LIFESTYLE CHANGES ARE KEEPING DEMAND HIGH
Even as we return to more normalcy in our lives, for most of us, our priorities have shifted permanently. Organizations and employees have adjusted to remote work and many will continue to work from home, if not entirely at least partially. This has drawn some away from "downtown" lifestyles and into smaller metro and suburban areas like West Michigan.
Homeowners have also seen the value in investing in their quality of life at home—expansions and remodels are up, pools have been put in and many have looked to upgrade to a larger or just better space for life at home. These factors will continue to drive demand in the coming months.
PERSONAL SAVINGS CREATING OPPORTUNITY
Nationwide, despite a decrease in GDP, personal income is up—thanks largely to numerous rounds of stimulus. However, spending in general is down. People are saving, and for many, that means the opportunity to move up or increase their investment in real estate.
OPPOSING FORCES LEADING TO BALANCE
As stimulus and increasing job growth will fuel the pace of the real estate market, the inevitable headwind of increasing interest rates should begin to slow things down. While experts don't see this changing quickly, they do expect that inventory will gradually increase as pent-up buyer demand is being met. Many believe we will begin to approach a more balanced market in the next two to three years.
While post-pandemic life begins to feel more normal, business in real estate continues to be fast paced and may feel a bit frenzied for both buyers and sellers. The good news: real estate agents and other service providers have been working in this environment for some time and have become experts at navigating it. While most of us go through a real estate transaction only a few times in our lives, Realtors are doing it every day. Make sure you have their expertise in your corner if you're ready to make a move.
Beth DeVries is the Director of Marketing & Communications at Greenridge Realty, Inc., one of Michigan's longest-standing family-owned real estate agencies. Greenridge Realty currently employs more than 400 real estate agents across 26 West Michigan offices. For more information on Greenridge Realty, visit greenridge.com.