2022 Real Estate Market Predictions for West Michigan
The new year is here and we’re sure you’re all wondering what 2022 has in store for Real Estate in West Michigan. While we can’t say anything for certain, we can definitely combine our years of experience, historical trends, and other expert opinions to craft our Real Estate predictions for the year to come.
Each agent on our team pulled together their individual prediction for the year and I think you’ll see that while they differ in some ways, there are a few general themes we expect as a team:
- A slight uptick in interest rates though generally staying low
- Housing demand stays strong
- It’s a great time to buy in West Michigan in 2022
Overall, I believe we'll see a more balanced real estate market in 2022. I anticipate rising mortgage interest rates reaching 4% in 2022, causing buyers to lose buying power. These higher rates are likely to influence a decrease in home prices and appreciation. Though appreciation will likely decrease from last year's historic highs, I still anticipate a solid appreciation of 6-8% due to the strong demand in our market and the overall affordability of West MI. Demand for housing will remain steady, if not increase, with more Millennial and Gen Z home buyers entering the market, an influx in covid-related and climate-conscious relocations and our growing West MI workforce. With an increase in prospective buyers and backlog of new builds, we are likely to continue to see a lack in supply, maintaining competition for the available properties.
Sources: local market stats, RE/MAX of GR, local lenders, Brian Buffini, Dr Yun, etc. https://fortune.com/2021/11/29/housing-market-real-estate-predictions-2022-forecast/
I believe 2022 will bring another strong year in the West Michigan Real Estate market. Low Inventory and buyer fatigue may bring a slower start to the year, but I expect the late winter/spring market to be as busy as ever. Low interest rates will continue to keep buyers excited and weathering the competitive storm. I do expect interest rates to creep up closer to 4% by then end of 2022 as projected by many local and national economists.
In 2021 we saw record appreciation rates in West Michigan, but in 2022 as interest rates increase, I expect appreciation rates to level off closer to 6-8%, which is still higher than average historical trends. As appreciation cools a bit, I expect throughout portions of the year that days on the market may increase, which will also increase our much needed inventory levels.
All in all, we expect another great year in the local real estate market.
2022 we will see some changes. I think we will still continue to see a competitive market. Inventory will be low but I think we will see some changes in the buying pool. Rates will rise to 3.5% or higher causing potential buyers to readjust their budgets. Come spring we will start to see inventory increasing and then a more leveled out summer than the previous few years.
With rental rates on the rise in the Grand Rapids area, it will still make sense to buy a home with the low-interest rates if you're planning to live in the area for the next 2 years. The Grand Rapids market is in for another whirlwind of a spring market from January to June, leading to buyer frustration caused by low inventory and multiple offer situations. I think we will then most likely see another rush in August and September due to the interest rates rising, but staying under 5%.
Investment properties will continue to be a hot subject even with all the updates it needs and a cap rate that does not make sense at the time. Due to the anticipated gas price hike, buyers will be trying to keep their commute times low. I also believe smaller homes will become more and more popular due to the inflation and upkeep required.
If you’re looking to buy or sell your home in 2022, our team is ready to help guide you through the process from start to finish. Connect with our team today by phone, email, or find us on social media!