Real Estate Corner with Rick Seese: August Edition

In this edition, Rick writes about The Latest Area Market Statistics and First Time Homebuyer Advice – Step #1

2021 Statistics Year-To-Date

Average Sale Prices – Year-To-Date Through July 2021

School District Average Sale Price
Forest Hills $470693
Caledonia $379,209
Rockford $370,142
Lowell $327,398
Saranac $234,884
Belding $195,435
Lakewood $189,938

Statistics courtesy of GRAR (Greater Regional Alliance of Realtors)

The entire MLS (Multiple Listing Service) Average Sale Price grew 1.1% in July from $256,046 to $258,738.  The Average Sale Price in the Lowell School District grew 2.7% in July from $319,768 to $327,397.  There were two of our focus area school districts that had Average Sale Prices fall slightly in July (Forest Hills and Lakewood).  The overall demand remains strong in most areas of West Michigan, but some of the stronger Average Sale Price increases in July were experienced in Lowell, Caledonia, and Saranac.  The Lowell School District continues to be a desirable destination for younger families.

Average Sale Prices by Municipality – As of July 31, 2021 

Location/School District Average Sale Price
City of Lowell $217,124
Lowell Township $338,209
Vergennes Township $384,974
Ada Township $531,516
Cascade Township $466,554
Bowne Township $227,329
Grattan Township $310,430
Boston Township $276,978
Keene Township $274,553

Statistics courtesy of GRAR (Greater Regional Alliance of Realtors)

 The City of Lowell has the lowest average sale price, mostly because of their higher percentage of older homes.  The other municipalities have Average Sale Prices affected by a higher percentage of homes located on acreage or have waterfrontage. Of course, Ada Township and Cascade Township Average Sale Prices are affected by Forest Hills Schools.

 

                                                 Market Inventory – As of July 31, 2021

Location/School District Homes Currently for Sale Months of Supply
Entire MLS – GRAR* 4,238 1.3
Rockford 83 1.2
Forest Hills 76 1.1
Caledonia 41 1.1
Lowell 25 .9
Lakewood 12 1.1
Belding 11 0.7
Saranac 8 1.2

*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 months’ supply tends to push prices up more rapidly.

Most of our focus area school districts had less homes for sale at the end of July compared to the end of June.  Properly priced new listings in eastern Kent County and western Ionia County continue to draw multiple offers and over list price sale prices.  The Lowell School District continues to have one of the area’s lowest Months of Supply, as less homeowners are wanting to sell their homes.              

Average Price Per Square Foot – As of July 31, 2021

Location/School District Average Price Per Sq. Ft.
Forest Hills $158
Rockford $156
Caledonia $151
Lowell $147
Entire MLS $133
Saranac $123
Belding $122
Lakewood $113

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 averages continue to increase in our focus area school districts.  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 necessarily 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 July 31, 2021

Location/School District Pending Sales
Entire MLS 39,396
Forest Hills 858
Rockford 825
Caledonia 427
Lowell 316
Belding 181
Lakewood 151
Saranac 79

Statistics courtesy of GRAR (Greater Regional Alliance of Realtors)

Pending Sales are sales under contract with an accepted offer, but the sales have not finalized yet (closed).  Some of the above numbers could change daily, as some sales will fall apart, but new sales will be added.  At the moment, pending sales will continue to rise, if enough homes continue to be available for purchase.  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.

First Time Homebuyer Advice – Step #1

Don’t worry.  You aren’t alone.  Somewhere between 30-40% of all single-family homes sold every year in the United States are to First-Time Homebuyers.  Also, the average homeowner moves approximately every 7 years, which accounts for the remaining 60-70% of all home sales.

Talk to a lender of your choice about getting Pre-Approved for a mortgage.  Do this BEFORE you begin getting serious about looking at homes.  You definitely need to know how much you can qualify to purchase and how much money you need for a down payment and closing costs.  Once you have obtained this information, compare your current housing budget with a new proposed budget.  Make sure you understand your total monthly mortgage cost, which will include Principal, Interest, Taxes, and Insurance.  Until you have actually chosen a home to purchase, these numbers will be estimated.  Taxes and Insurance can vary from one municipality to another.  Also, Property Taxes will change after your purchase and will most normally increase.  Additionally, don’t forget HOA dues and fees (Homeowner’s Association) that may cover a variety of costs, such as private road maintenance or other group maintenance items.  HOA’s are not just applicable for condominiums.  Many developments have HOA’s for the same reasons as condos, but normally covering less items with lower total fees.

The second tier of costs to compare are utilities.  Will your heating, electricity, trash, water & sewer, internet, cable tv costs be different from what you are used to?

The third tier of costs will be maintenance for your new home, especially if you are currently renting.  Normal maintenance includes some larger cost items, such as roofing, furnace, central air, hot water heater and appliances.  Are any of these items older?  Should you begin budgeting for any of these replacements?  Do any of them need to be replaced now?

Purchasing your first home doesn’t need to come with surprises.  Visual interpretations, questions and answers from the Seller Disclosure Statement and hiring a Home Inspector can help you determine all this information, as well as provide a practical list of home components that will need attention at a later date.

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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