2023 West Michigan Real Estate Market Predictions

While the hustle and bustle of the end of the year are in play, and we’re all busy wrapping gifts, celebrating our wins from 2022, and spending quality time with those we love, we can’t help but also be looking ahead to what the West Michigan Real Estate market has in store for 2023. With all that has happened in 2022, there are a lot of questions about what 2023 may have in store. We asked each of our agents to put their years of knowledge and expertise together to give their predictions for the 2023 West Michigan Real Estate market, here’s what they have to say.

2023 West Michigan Real Estate Market Predictions

Josh May:

While 2022 proved to see some of the biggest changes in real estate over the past years in terms of interest rates rising and appreciation slowing; when thinking about 2023 one word comes to mind – Stable.

It’s no secret that steep interest rate hikes have been meant to curb inflation. With that happening towards the end of 2022, I am expecting interest rates to come back down into the 5-6% area for the majority of 2023. We are still experiencing low inventory, and as that continues throughout 2023, I am still expecting home value appreciation in 2023. National projections are around 2% for housing, and I expect West Michigan to be a little higher around the 4-5% area. The reason for this is simply that West Michigan did not experience the extreme appreciation that some areas of the country (Arizona, California, and Florida) had. Some of these areas will pull down the national average, and I believe West Michigan will be on the right side of this.

There is a river in Real Estate, and it will keep flowing in 2023!

Scott Bradford:

As we head into January, February, and March of 2023, we will continue to see a more normal market. In the past 10 years, we have not been in a normal market. Interest rates will stick around 6-7%. We will see a very small price adjustment due to a shift in the buyer’s favor. 

My prediction for sellers will be a slight increase of 1-3% in their home, being updated and move-in ready. This will give the ability to the buyers to be able to do their due diligence on the property. April, May, and June, we will start to see the interest rates calm down. We may even see them in the mid-5 %. This will give a slight boost to the real estate market. July, August, and September will continue to be months where the rush will come to an end. October, November, and December will see a decrease in sales. This will pin the real estate market as the ole saying, “it’s seasonal.”

Less homes will be sold in 2023, however, the market will be a healthier market and equal for buyers and sellers. 2023 will most likely be a frustrating market for agents as their negotiation skills will be put to the test in every deal. In GRAR, I predict 1,200 agents will not renew their licenses and 350 new agents will be joining the market. 

Ross Bacon:

I think 2023 is going to be the year of change. With the most recent fed rate increase, I think it’s going to be a different market moving forward for quite some time. We will begin to see more of a balance between buyers and sellers from a negotiation point of view. I think the days of 20-30k above ask are behind us and buyers will have the ability to sleep on their decision whether or not to submit offers. Homes will still sell very quickly but the competitiveness will have cooled off. Rates will remain in the sixes with a few adjustments here and there. Inventory will remain on the low side but the buying pool will still be strong. Those buyers waiting for rates to drop will miss out on opportunities. Appreciation is still going to happen; we won’t see double digits but instead more modest increases 3-5% moving forward. These are normal mortgage rates and I think it’s going to take a lot of educating first-time buyers to get them comfortable with purchasing a home in this market. 

Abby Cribbs

I’m projecting West MI to hold on to another year of appreciation, but see a slight softening in real estate activity. Our market will see a slight cool-down, but buyer demand will continue to outpace available supply which will drive single-digit home appreciation. 

Growing Demand: Despite inflation and supply chain issues, the West MI economy is growing. We are eyeing a “record number of new developments” and have goals to become the next Tech Hub of the Midwest (Crain’s Detroit Business). In addition to the many prospective buyers who weren’t able to beat out the competition in previous years, the growing first-time homebuyer market will now have an opportunity to capitalize on softening market conditions.

Interest Rates: Economists and mortgage brokers expect interest rates to remain higher than the record-low rates we’ve seen in the recent past but are projected to remain at/below 7%.

While only time will tell what 2023 has in store for each of us, if you’re getting ready to sell your home, looking to buy your first or next home, or are thinking about relocating to Grand Rapids, our team is ready to help you and make the process easy.