Looking to buy a house in Grand Rapids? 'Good luck' say brokers
The Grand Rapids housing market is the most competitive it's been in memory--that's according to a number of real estate brokers in the area who cite an influx of people moving to Kent County coupled with a shortage of houses available for first time buyers as the cause.
“Quite honestly, I’ve been doing this for 26 years now, and I’ve never seen anything like it,” Bob Novosad, managing broker for Keller Williams Realty said.
Nearly 6000 people moved to Kent County between 2015 and 2016, and according to a US Census report released last week, Grand Rapids is the fastest-growing region in Michigan. It’s one of the contributing factors to a Grand Rapids housing market so tight, home buyers who put an offer on a house could be competing with 10 to 20 other offers.
“Well the highest that I have seen so far is 43 here in the last month," Novosad said. "Yeah, that’s very, very common, especially if the property is in a good location and in good condition.”
Which is making it difficult for buyers to find a home who don't have a lot of capital to put down upfront.
“It is extremely hard for FHA 3.5 percent down buyers to make a go of it right now, because they will lose down to 5% down conventional offers, who then lose out to 20 percent down conventional offers, who then lose out to cash buyers.”
Novosad says the majority of developers have abandoned building starter homes in favor of $300,000 to $1 million dollar homes, leaving first time buyers with a historically competitive market, as the number of homes for sale under $190,000 are few and far between. Mark Hoskins from Brekshire Hathaway Real Estate agrees. He's never seen anything like this.
“Yeah, been doing this since 1985, and this is about the tightest inventory that we have seen. It’s worse than it was last year and last year was very tight inventory.”
So how long will the Grand Rapids market stay this way?
“I wish I had a crystal ball to tell you. If the market continues to go the way it is, I think it will continue to go up,” he said.