This month Rick writes about a new bill signed into law in Michigan aimed at helping first-time home buyers save for their purchase and shares area statistics.
My Two Cents
A new bill has been signed into law in Michigan that could help first-time home buyers save for their first purchase. The new program is named the Michigan First-Time Home Buyers Savings Program, and it creates the pathway for special tax-exempt savings accounts for people to accumulate funds to use for purchasing their first home. It works similarly to a IRA account.
Any associated contributions, interest earned, or qualified withdrawals from a qualified account would be exempt from taxation. Michiganders could claim up to $5,000 for a single return or $10,000 for a joint return on their taxes. The maximum tax-deductible contributions for the account cannot exceed $50,000 over the 5-year program.
Starting this year, the Michigan First-Time Homebuyers Savings Program is aiming to help buyers have a larger dedicated savings toward the purchase costs of their first home. With the continued increase of average sale prices in Michigan (approx. $258,000) and our Greater Grand Rapids Association of Realtors (Approx. $315,000), down payments and closing expenses increase accordingly. And yes, parents and grandparents can contribute. For further information regarding the setting up of an account and how contributions can be made, contact your preferred loan officer.
The entire House Bill 4290 and Senate Bill 145 can be viewed here:
http://legislature.mi.gov/documents/2021-2022/billenrolled/House/pdf/2021-HNB-4290.pdf
http://legislature.mi.gov/documents/2021-2022/billenrolled/Senate/pdf/2021-SNB-0145.pdf
I’m thankful for any program that helps first-time buyers achieve their goal of homeownership. Affordability has been the biggest challenge for this group of buyers over the past few years. Incentives for saving money could be very helpful and, of course, it’s never too early to plan for a major purchase. I can’t think of a better way to help encourage our young leaders of tomorrow to stay in Michigan and raise their families. This could be a great long-term tool. Our Michigan lawmakers should think seriously about making this at least a 20-year program to study the longer-term effects.
2022 Statistics Year-To-Date
Average Sale Prices Year-To-Date Through March 2022
| School District | Average Sale Price YTD / Final 2021 |
| Forest Hills | $537,968 / $503,893 |
| Rockford | $437,967 / $389,329 |
| Lowell | $367,978 / $348,377 |
| Caledonia | $358,231 / $393,991 |
| Entire MLS | $273,659 / $268,982 |
| Saranac | $244,724 / $254,552 |
| Lakewood | $226,392 / $203,636 |
| Belding | $223,931 / $212,680 |
*MLS is Multiple Listing Service. Coverage area includes all of Kent and Ionia Counties, northern Barry County (inclusive of Gun Lake) and southeastern Ottawa County. Statistics courtesy of GRAR (Greater Regional Alliance of Realtors).
This table shows the 2022 Year-to-Date Average Sale Prices compared to the Average Sale prices for the entire year of 2021. The 2022 first quarter shows some hefty increases in Forest Hills, Rockford and Lowell and decreases in Caledonia, Saranac, Lakewood, and Belding. The Entire MLS also shows a sizable increase. With only 3 months into the new year, it’s difficult to predict, but I do expect the increases and decreases to flatten somewhat as we obtain a larger number of monthly sales to be factored into the averages. As we move further into the spring market, the demand should increase, as buyers begin to feel the spring air. March was an active month in the Lowell School District as the sale prices averaged $3,037 above listing prices.
Average Sale Prices by Surrounding Township Through March 31, 2022 (3-Month Rolling Average)
| Township | Average Sale Price YTD |
| Ada Township | $743,016 |
| Cascade Township | $506,493 |
| Vergennes Township | $419,292 |
| Bowne Township | $367,901 |
| Lowell Township | $362,899 |
| Boston Township | $291,756 |
| Grattan Township | $286,417 |
| Entire MLS | $273,659 |
| Keene Township | $132,478 |
Statistics courtesy of GRAR (Greater Regional Alliance of Realtors)
Here are the early Average Sale Prices by Surrounding Townships for 2022. The Lowell School District takes up a portion of each of these townships, except Vergennes and Lowell Townships, where the entire townships are encompassed by the Lowell School District. Again, this is the first quarter with many more sales to come, which will solidify actual trends. Nevertheless, Ada, Vergennes, Bowne and Lowell Townships increased since last month. The other townships decreased.
Market Inventory As of March 31, 2022
|
School District |
Homes Currently
for Sale |
Months of Supply for March 2022 | New Listings
Mar 2021 vs Mar 2022 |
| Entire MLS – GRAR* | 2,694 | .9 | 3,534 3,377 |
| Rockford | 45 | .8 | 82 68 |
| Forest Hills | 31 | .5 | 100 78 |
| Caledonia | 29 | .8 | 39 41 |
| Lowell | 20 | .8 | 29 41 |
| Belding | 10 | .6 | 8 12 |
| Lakewood | 5 | .5 | 13 9 |
| Saranac | 0 | .0 | 4 9 |
*MLS is Multiple Listing Service. Coverage area includes all of Kent and Ionia Counties, northern Barry County (inclusive of Gun Lake) and southeastern Ottawa County. Statistics courtesy of GRAR (Greater Regional Alliance of Realtors).
“Months of Supply” refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Historically, six months of supply is associated with moderate price appreciation, and a lower level of month’s supply tends to push prices up more rapidly.
As we approach the spring market, we continue to experience extremely low inventory. Current Homes for Sale increased slightly in most of our focus school districts, as well as Months of Supply, except for the Saranac School District.
New Listings decreased or remained the relatively the same when compared to March 2021, except for the Lowell School District, but most of that extra inventory was sold quickly.
The next couple months should provide for more inventory everywhere, but demand usually increases greatly as the weather becomes more pleasant for home shopping.
Average Price Per Square Foot As of March 31, 2022 (3-Month Rolling Average)
| School District | Average Price Per Sq. Ft. |
| Rockford | $191 |
| Forest Hills | $190 |
| Lowell | $177 |
| Caledonia | $168 |
| Entire MLS | $147 |
| Saranac | $131 |
| Belding | $122 |
| Lakewood | $119 |
Statistics courtesy of GRAR (Greater Regional Alliance of Realtors)
The Average Price Per Square Foot means the price per square foot in relation to the sale price.
The Lowell School District climbed in the rankings with an increase of +$15 per square foot from last month. Rockford increased +$7 and Forest Hills +$4. All the other focus area school districts stayed the same or decreased. The entire MLS increased +$3. The large increases and decreases should stabilize over the next few months with more sales added to the equation.
These numbers are also an indication of supply and demand. Average new home construction costs begin around $200+ per sq. ft. in West Michigan, but that does not typically include landscaping; the cost of the land or lot to build the new home; or the cost of improvements to the land, such as water/sewer hook-up, well, septic, driveway, electric, and gas. The above averages include existing homes and some new construction.
Pending Sales As of March 31, 2022
|
School District |
Pending Sales
Mar 2022 vs Mar 2021 |
| Entire MLS | 2,676 3,329 |
| Forest Hills | 67 90 |
| Rockford | 54 80 |
| Caledonia | 37 40 |
| Lowell | 31 23 |
| Belding | 16 16 |
| Lakewood | 15 15 |
| Saranac | 10 5 |
Statistics courtesy of GRAR (Greater Regional Alliance of Realtors)
Pending Sales are sales under contract with an accepted offer, but those transactions have not finalized yet (closed). Some of the above numbers could change daily, as some sales will terminate for various reasons, but new sales will be added. I have added the comparison for the same month 2021 vs 2022. Pending Sales decreased within the Entire MLS for the 2nd consecutive month, as well as in most of our focus area school districts when comparing March 2022 and March 2021. The Lowell School District did experience a sizable increase in the same comparison for the 2nd consecutive month. Low inventory may be playing a portion of this decrease, as well as rising interest rates. These numbers are important as a tool to forecast future closings and indicate recent activity. Most pending sales become finalized and closed within a three-to-six-week period, from the date it became pending.
Rick Seese works with buyers and sellers of residential, commercial, and industrial real estate. He is an Associate Broker with Greenridge Realty, Inc. and has been licensed full-time for over 40 years. If you’re interested in reaching out to Rick for more information, or have a question for the monthly article, you can contact him via email ([email protected]), visit his website at www.rickseese.com or Facebook page at (www.facebook.com/Rick Seese), or call/text him at 616-437-2576.
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