Real Estate Corner with Rick Seese: May 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].

May 2021 Edition

The Latest Spring Market Statistics

Buyer and Seller Profile Highlights from the National Association of Realtors (NAR)

2021 Statistics Year-To-Date

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

School District	Average Sale Price
Forest Hills	$467,559
Caledonia	$355,944
Rockford	$346,657
Lowell	$316,343
Saranac	$216,049
Lakewood	$188,974
Belding	$183,503

Statistics courtesy of GRAR (Greater Regional Alliance of Realtors)

The housing market remains strong, as Average Sale Prices edge upward in most market areas. Eastern Kent and western Ionia County markets continue to be stronger than most market areas throughout West Michigan.  The locations closer to Grand Rapids continue to outpace further outlying rural locations with buyer demand. The buyer demand is expected to continue, but interest rates continue to be questionable, as inflationary concerns have resurfaced.  I would look for mortgage rates to continue to edge upward as the Federal Reserve may reconsider stepping in and increasing rates.

 Market Inventory – As of April 30, 2021

Location/School District	Homes Currently for Sale	Months of Supply
Entire MLS – GRAR*	4,601	1.5
Forest Hills	106	1.6
Rockford	102	1.5
Caledonia	54	1.4
Lowell	26	1.0
Lakewood	16	1.3
Belding	13	0.8
Saranac	8	1.3

*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 lack of housing inventory continues to be a problem.  It is evident in West Michigan, the state of Michigan, and throughout the U.S. markets.  The lack of buyer choices in higher demand areas are especially problematic, as we continue our way through the spring market.  Months of Supply is 1.0 month in the Lowell School District and less than 2.0 months in all our focus market areas in the above chart.  As of this writing, there are only 26 homes listed for sale in the Lowell School District.  Three of those homes are priced between $200,000 and $300,000; six of those homes are between $300,000 and $400,000; and the remainder are priced above $400,000.                         

Average Price Per Square Foot – As of April 30, 2021 

Location/School District	Average Price Per Sq. Ft.
Forest Hills	$153
Rockford	$145
Caledonia	$145
Lowell	$141
Entire MLS	$130
Saranac	$120
Belding	$110
Lakewood	$108

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..

Some Highlights From the 2020 Profile of Home Buyers and Sellers
Information courtesy of NAR (National Association of Realtors)

• First-time buyers made up 31% of all home buyers in 2020, a dip from the previous year of 33%.
• The typical buyer was 47 years old.
• 12% of home buyers purchased a multi-generational home, to take care of aging parents, because of children over the age of 18 moving back home, and for cost-saving.
• 18% of home buyers were veterans and 2% were active-duty service members.
• Home prices increased slightly (nationally) this past year to a median of $272,500 among all buyers. Buyers typically purchased their homes for 99% of the asking price.
• The typical home that was purchased was 1,900 square feet, had three bedrooms and two bathrooms, and was built in 1993.
• Heating and cooling costs were the most important factors for home buyers, with 83% finding these features at least somewhat important.
• For 43% of buyers, the first step that they took in the home buying process was to look online at properties for sale, while 18% of buyers first contacted a real estate agent.  89% of all home sellers worked with a real estate agent to sell their homes.
• Buyers typically searched for eight weeks and looked at a median of 9 homes and viewed 5 of these homes only online.
• The share of home buyers who used the internet to search for a home increased to an all-time high of 97%.

For all sellers, the most commonly cited reason for selling their home was the desire to move closer to friends and family (15%), that it was too small (14%), and a change in family situation (12%).  Other reasons cited were down-sizing and health considerations.

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.