Real Estate Corner with Rick Seese: June Edition

After 30 years of real estate management and teaching the business to hundreds of agents, I now focus solely on helping my clients buy and sell homes.  But now, I also have time to share my experiences, knowledge, and insight with the readers of Lowell’s First Look, on a monthly basis.  I invite your ongoing questions, whether you are planning on purchasing your very first home or your next home, or your last home.  Just email me your questions at [email protected].

June 2021 Edition: The Latest Area Market Statistics and Weekly Q & A

2021 Statistics Year-To-Date

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

School District Average Sale Price
Forest Hills $469,264
Caledonia $361,140
Rockford $352,138
Lowell $325,689
Saranac $220,600
Lakewood $189,385
Belding $184,991

Statistics courtesy of GRAR (Greater Regional Alliance of Realtors)

 The West Michigan housing market continues to roll forward under the strength of Millennial (25-40 years old) demand and low interest rates.  There does not seem to be an end to demand in sight as the Gen Z group (Under 24 years old) are gearing up to provide additional demand push for years to come.  All Average Sale Prices in our focus area increased slightly this past month. The Lowell School District Average Sale Price has now increased by 16.9% over the past 12 months.  Affordability continues to be of concern, as Kent County Average Sale Price is now $281,903, as compared to Ionia County at $184,402.

                                                Market Inventory – As of May 31, 2021

Location/School District Homes Currently for Sale Months of Supply
Entire MLS – GRAR* 4,315 1.4
Rockford 96 1.4
Forest Hills 95 1.4
Caledonia 48 1.3
Lowell 26 1.0
Lakewood 15 1.3
Belding 13 0.8
Saranac 7 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.

The ”Spring Market” has not brought much relief to buyers and their home purchase choices.  Months of Inventory has remained stagnant, as properly priced new listings have been selling within a week.  Days on the Market numbers continue to hover around 6-8 days throughout our focus area, but that does not consider that 70-80% of homes are now listed with a Delayed Offer notification.  This means that the seller wishes to not review any offers until 5-6 days after the home hits the market.  In many cases, this creates a showing frenzy and an escalation of offered prices with generous terms for the seller.  This program stretches the statistical Days on the Market numbers higher, as it takes 6-8 days before a pending sale is reported.  Many of those homes would sell in a day or two, if not listed with the Delayed Offer program.

The Lowell School District is on the lower end of Months of Supply, as the School District remains highly desirable among younger buyers looking to raise their children.  The Lowell Community is also served well with reasonably quick accesses to Grand Rapids and Lansing.

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

Location/School District Average Price Per Sq. Ft.
Forest Hills $155
Rockford $150
Caledonia $146
Lowell $144
Entire MLS $131
Saranac $121
Belding $111
Lakewood $110

Statistics courtesy of GRAR (Greater Regional Alliance of Realtors)

The Average Price Per Square Foot within our focus areas continue to inch upward.  These numbers are also an indication of supply and demand.  Average new home construction costs begin above $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, gas, etc..

New construction remains popular, as existing home inventory remains very low.  However, the logistics of building a new home can be a difficult endeavor financially and require proper timing, as most buyers need to sell their existing home to obtain a construction loan.  This requires two moves and a temporary rental to make it work.

Recent Questions and Answers

Rick,

I have noticed that building sites are just as hard to find as homes. How do I go about splitting some land that I own?

The first question is what are the township or city requirements for road frontage and minimum lot size for the zoning that the property is located?  Will the remaining parcel after the split meet the same requirements?  Any existing homes and structures will need to comply with all current set-back requirements for the new and resulting parcels.  If those answers work, then there is the question of soil conditions for septic system use, if there is no sewer hook-up available.  This can be determined through the Environmental Health Division of your County Health Department.  The final determination will be the State of Michigan requirements as to whether your parcel is eligible to be split, as determined by previous years of splitting that has involved your parcel. The State of Michigan also has additional requirements that pertain to the depth and width of the new and resulting parcel. Check with your municipality for a Land Division Application and any further requirements.

Rick,

Airbnb and VRBO have become popular over the past few years.  Now that I’m retired, my wife and I could use some extra income.  Are there any restrictions renting a bedroom or creating a rental unit in our walkout basement?

It is currently all about zoning and your municipality.  Check with your city or township as to your abilities to do any kind of rental idea, whether it be a room, basement, or your entire home.  Also keep in mind that your property may be subject to deed and/or use restrictions that may not allow the use of your home for anything other than a single-family residence.  The State of Michigan is currently trying to address the temporary rental question, so stay tuned.

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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