The Michigan Housing Market experienced a slow increase in the first half of 2015. Current reports seem to indicate that the rise will continue even more vigorously for the next year (until mid-2016 and presumably on afterwards). Currently rated as the 13th out of the 50 states, Michigan’s economy is considerably one of the strongest in the country, and the healthy rhythm of this economy obviously trickles down to the housing market as well, making it a good one and on a continuous rise as well. Their economy is especially strong in the tech and research niche, making the projected economic growth even more reliable, since these niches are well-known as future-proof. Moreover, the Michigan state holds the 3rd and 4th positions, alternatively, in the top of overall expenditures of the states in the R&D (Research & Development) department.
The 2015 housing market in the state has risen by only a slow rate of 1.4% in the past year (since May 2014). According to our research, it should rise by a staggering 5.6% in the next year (by May 2016). Even if the median house value on the housing market in Michigan isn’t as high as in other states, being currently situated at $117,600 as of May 2015, the stable rise and large reported transactions make this market a good place for prospective home owners and investors alike. Below is an overview of the data we have obtained for the Michigan real estate market in 2015. We’ve used this data to make housing market predictions for the market in this state. If you’d like to take a look at this housing market last year, read our 2014 Michigan housing market predictions report. You will notice that our overview of it was also optimistic, but more cautious than this year due to some of the year’s drawbacks (flooding, higher economic instability etc.) This year’s forecasts definitely look better.
Influencing Factors for the 2015 Michigan Housing Market
As stated above, the median home value of a house in the 2015 housing market is $117,600, and the median renting price was estimated by Zillow at $925. The Trulia MI reports indicate a more nuanced picture: the average home value of a owner-occupied unit is $115,600 (just below the national average of $119,600), while the median listing price for housing units which aren’t owner-occupied is at $88,400, also under the national average of $89,600. This difference made by the detail of the owner living in the house unit or not can be explained by the fact that usually we prefer living in larger units and renting out the smaller ones. We may also be tempted to value owner-inhabited homes more because of psychological factors as well, but we shouldn’t digress.
- As in the case of many other states, under the current economy, mortgage delinquency plays an important role in Michigan real estate. Mortgage delinquency is defined as a step in the process of foreclosure, corresponding to the situation where mortgage payments are missed by the home owner. How many mortgage payments need to be missed or by how long before the foreclosure process starts can vary, but mortgage delinquency plays an important role on the real estate market in any case.
- According to Zillow, the percent of mortgage delinquencies is the state is only of 3.3, almost half of the national average, which amounts to 6%. This means that the foreclosure phenomena has a moderate impact on the housing market in Michigan, but an impact nonetheless. There were about 18.4% of Michigan homeowners a bit behind on their mortgages in May 2015, so it’s quite possible to see the foreclosure processes become more significant on the market by the end of the year.
- As for actual sales of real estate property, the median sale price of a home was $144,498 at the end of May 2015. Just to make sure everything is cleared up, this median value isn’t equivalent to an average value (the sum of all values divided by the total number of those values). Instead, the median is actually the complete middle in the long lines of various sale values. Half of all properties being sold in on the 2015 Michigan housing market are sold for less than $$144,498, while the other half are sold for more. This median value is expected to rise at a more intense pace, along with the housing market of the state itself (with the predicted 5.6% rate).
- Per square foot of property, the median sale price was $102 at the time of the most recent Zillow data (end of May 2015). The median listing price per square foot was a bit lower, at just $93, but it’s the rule to have sale prices higher than listing prices almost everywhere and in all market circumstances.
- As for renting, the recent Zillow data indicates that the average price per property in Michigan is $1,024, still a bit lower than the national average (currently at $1,367) but still on the rise. As for listing prices, which tend to be lower, the average rent listing price was $925 at the end of May 2015, while the average rent listing price per square foot was $0.91. The fact that the current trend is pushing the renting prices to rise is all the more reason for real estate investors to see a reasonable opportunity in the Michigan housing market.
- According to the Real Estate One report of December 2014, things were already beginning to improve on the Michigan real estate market towards the end of last year, but at a slower-feeling pace. The slow rising trend continued throughout the first half of the current year, and experts predict it will intensify by next year, so it would be a good idea to keep an eye on this market. The worst part of the depression was felt on the Michigan housing market in 2011 through 2013, and the cards have definitely changed to a slow but mostly steady recovery ever since.
Best Places to live in Michigan According to our Housing Market Predictions
It’s now time to take a look at some of Michigan’s top populated areas to see how the local real estate market is doing in these few key cases. Even if, overall, the Michigan housing market is improving, slowly but definitely improving, this doesn’t mean the state is exempt of a few problem areas. One such area is Flint, for example. The median home value in Flint, Michigan is currently at $35,000 according to Zillow, after deprecating by 8.6% in the last year. The next year (by mid-2016) seems to bring a rise of 0.5% for this local housing market, but definitely not enough to make for last year’s fall.
No suprise to any of us here, the state’s largest city is one of the areas which seriously lags behind in terms of real estate value. The Detroit Housing Market looks more or less discouraging in mid-2015: the median home value here is, according to data provided by Zillow, only $37,900. During the past year (since mid-2014) the market has declined by a discomforting 7.8% and should continue to devalue by a further 2.8% in the next year. The median rent price is currently at $750 in Detroit and $945 for the Detroit Metro area. Even so, things don’t look good enough to attract investors based on these stats alone. The size of the city and its business are probably the only drive behind the transactions which still take place on this market.
As for the state’s capital, Lansing, things don’t look great here either. The median home value here is $63,400. The Lansing real estate market only recently started a slow recovery after its recent falling trends. Over the past year, the housing market here decreased by $3.4. Zillow experts predict only a $0.1 rise in the next year. This area is still a long way from a full recovery.
An example of a more fortunate area in the state is Grand Rapids. The Grand Rapids real estate market has been on the rise in the past year and will continue to rise in the next one as well. The home values are significantly higher here. The median home value is currently estimated at $103,200, the rising rate of the housing market was 5.2% in the past year. The next year will reportedly bring along a further rise by 3.2%. If such data doesn’t attract a lot of transactions and investors, few things will.
Ann Arbor has proven to be an even more profitable housing market in Michigan. Recent Zillow data indicates that it continues to serve as the star attraction of Michigan real estate. The Ann Arbor real estate data boasts a median home value of $279,200. Moreover, the market rose in the past year by 4.6% and should continue to grow even further with a 0.7% in the next year as well. As for the rent, the median rent listing price in the city is $1525 which is a bit higher than the median price for the Ann Arbor Metro area (estimated by Zillow at $1400). While it’s true that this real estate market is not for all players, these figures sure look attractive for everyone interested in the overall Michigan housing market.