Real Estate Corner with Rick Seese: September Edition

This month Rick shares his perspective on Inflation and Interest Rates, provides area statistics, and ends with a monthly summary.

My Perspective – Inflation and Interest Rates

It has been said that that increasing interest rates is like a dose of economic medicine when it comes to treating inflation.  In our present situation, the real estate market is hoping for the exact dose necessary to lower inflation and return the housing market to healthier circumstances of supply and demand.  We certainly hope that one or two more rate hikes of about 1% to 1.5% will correct our inflation problem.  Can we weather more increases? Yes, I believe we can.  What we can’t weather is the continuance of higher inflation.  Over the past few months, the housing industry has slowed in many areas throughout America.  The Midwest region has pocket areas of much slower markets than West Michigan. The upward rise of interest rates is not yet affecting our local supply of available homes as much as most other markets around us.  Our Months of Supply remains under 2.0 (See Market Inventory Table) and buyers are still gobbling up new listings if they are priced right.  We will see what happens if mortgage rates begin to exceed 6%-7%, but my take is 3.0-4.0 Months of Supply is needed for a healthier housing market with less over-exuberant buyer bidding activity and more choices for buyers. The obvious hope is to not fall into an overall economic recession on our way to normalcy.  Can we do it or are the doomsday writers correct?  If we consider that many supply chains are beginning to heal from deep shortages, then we can see the potential of less upward pressure on prices. If there are jobs available, then there are potential dollars to be earned and dollars to be spent.  I do not think that we are headed toward a deep recession. I like to believe that we are headed toward a calmer market, with more wise and intentional spending in all economic sectors, which should put downward pressure on prices.  So far, our journey to slow inflation has been steady, but we need more medicine, in the form of higher interest rates. We have alternative lower adjustable-rate mortgages as an option for buyers, with the potential for re-financing to lower fixed-rate interest rates in the future.  The tables below tell us that our local real estate markets are maintaining quite well.  We are about to see what happens after the Federal Reserve applies another dose of interest rate hikes.

2022 Statistics Year-To-Date

Average Sale Prices Year-To-Date Through August 2022

School District Average Sale Price YTD    /    Final 2021
Forest Hills $556,155 / $503,893
Rockford $459,700 / $389,329
Caledonia $416,866 / $393,991
Lowell $409,334 / $348,377            
Entire MLS $285,259 / $268,982
Saranac $255,439 / $254,552
Lakewood $251,950 / $203,636
Belding $236,779 / $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).

The Entire MLS experienced another Average Sale Price increase over the past month (+$2,723).  There were varied increases and decreases within all our focus area school districts with Lowell leading the increase (+$4,125) and Lakewood leading the decrease (-$7,224).  Buyers continue to push sales in higher demand school districts, with sales slowing a bit in less demand areas. All our focus area school district Average Sale Prices remain well above their 2021 prices except Saranac.  Lowell and Rockford lead the annual increases with $60,000+ and $70,000+ respectively.  As we near the end of the year, the Average Sale Prices should have fewer large swings in prices, as the number of sales used in the calculation grows.

Average Sale Prices by Surrounding Township Through August 31, 2022 (12-Month Rolling Average)

Township Average Sale Price YTD
Ada Township $607,719
Cascade Township $578,456
Vergennes Township $422,470
Grattan Township $399,582
Lowell Township $362,654
Bowne Township $346,225
Entire MLS $285,259
Boston Township $271,988
Keene Township $224,914
Statistics courtesy of GRAR (Greater Regional Alliance of Realtors)

Here are the Average Sale Prices by Surrounding Townships through August 2022. The Lowell School District takes up a portion of each of these townships, except Vergennes and Lowell, where the entire townships are encompassed by the Lowell School District.  This table represents the first 8 months of 2022.  As you can see, our surrounding townships have higher average sale prices compared to the total MLS, except Boston Township and Keene Township in Ionia County.  All the townships increased or retained their 12-month rolling average sale prices from last month, except Grattan Township which decreased slightly.

Market Inventory As of August 31, 2022


School District

Homes Currently

for Sale

Months of Supply for July 2022 New Listings in August

 2021 vs 2022

Entire MLS – GRAR* 5,321 1.8 4,550     3,987
Forest Hills 87 1.4 86           64
Rockford 74 1.2 103          88
Caledonia 67 1.9 45           46
Lowell 40 1.5 28           44
Belding 21 1.5 16           20
Saranac 8 .4 13            7
Lakewood 5 1.8 14           13
*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, five to 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.

Homes Currently for Sale deceased slightly within the Entire MLS from last month, as well as all our focus area school districts, except Belding.  Months of Supply decreased or stayed the same, except for Belding.  New Listings has slowed most everywhere when comparing August 2021 and August 2022, except for Lowell and Belding.  This table tells us that we remain short of inventory and New Listings are slowing.  We still have less than 2.0 Months of Inventory everywhere.  Lowell had a nice increase of New Listings, but there were increased sales that dropped Lowell’s Months of Supply from 1.7 to 1.5 months.

Pending Sales As of August 31, 2022


School District

Pending Sales

Aug 2021 vs Aug 2022

Entire MLS 3,962         3,240
Rockford 95             101
Forest Hills 75              63
Lowell 27              44
Caledonia 36              42
Belding 15              11
Lakewood 14              11
Saranac 6                6
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).  Overall, the Entire MLS saw a year-over-year decrease in Pending Sales of -18.2%. However, Lowell led the year-over-year increases in Pending Sales with a +63%.  Other higher demand school districts had increases, in Rockford and Caledonia.  I expect that Pending Sales will generally continue to decrease everywhere with additional increases in interest rates and the onset of the seasonal Fall market.

Pending sales have now decreased within the Entire MLS for the seventh consecutive month, when comparing the same time frame in 2021 vs 2022.  We will continue to watch this chart closely, as additional hikes in interest rates should continue slowing the overall demand.  These numbers are important as a tool to forecast future closings and indicate recent activity.

September 2022 Monthly Summary

What does all this mean?  We are seeing some slowing in less demand areas, but the supply of available homes is not accumulating in most areas of West Michigan.  Pending Sales are slowly retreating, but there are still indications of demand within our focus area school districts.

The overall real estate markets nationally and regionally are continuing to slow.  The interest rate hikes are applying the economic brakes, as intentionally prescribed by the Federal Reserve. I expect another .75% to 1.00% interest rate increase soon, as the latest inflation reports from last week show that more intervention is needed.  From there, it will depend on how inflation reacts and what future reports tell us.

I suspect that West Michigan higher demand markets will begin to see an increase in months of supply and the lesser demand markets possibly exceeding 3 months of supply within the next 30-90 days.  The Grand Rapids area markets will be more resilient, as continued demand to live in West Michigan will continue. Most of our focus area school districts will continue to have positive demand due to their popularity and the quality of education they provide.

There is still a long way to go before we approach a normal Months of Supply of 4.0 to 5.0 months, but we may be headed in that direction.  I will be watching the supply and demand charts closely as we begin to reach a pinnacle point with interest rates.

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 or Facebook page at (, or call/text him at 616-437-2576.

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