New Home Sales Trends in 2015
By Ron Austin, Sable Homes General Manager
GRAND RAPIDS, MI, 2015 is a great year for buyers ! There is more inventory on the market and the economy is working its way up. According to the market trends, now is the time for sellers to sell and buyers to buy!
Both the new listings and number of houses sold have jumped over the past 6 months in Grand Rapids, MI. In November 2014 the number of new listings was 260. This jumped up to 449 in May of 2015. The number of homes sold also skyrocketed from 11 homes to 282 homes in May 2015 (Movoto, 2015).
With a high of $159,900 as the median list price in October 2014, the median list price in Grand Rapids has dropped to 129,900 as of June 2015. Homes have become increasingly more affordable due to the drops in list price and various financing options (Movoto, 2015).
Within the broader scope of Real Estate Trends in the United States, the National Association of Realtors data shows that new home sales were up 1.8% last October 2014 compared to the previous year in 2013. The market shows that builder confidence in newly constructed, single-family homes has been high for six months in a row (Forbes, 2014).
More and more families and young professionals are seeing the value in home ownership. Stan Humphries, chief economist at Zillow said, “next year we’ll start to see things really turn around. More inventory will continue to come online, putting the competitive pressure on sellers for a change. This more balanced market will be smoother sailing for everyone, both for buyers in search of a competitive advantage, and for sellers who turn around and become buyers themselves.” (Forbes, 2014).
Who are the demographics of new home buyers for the year of 2015? According to Forbes, millennials will take over the Generation X as the next generation of home buyers. Humphries notes, “As this generation (millennials) matures, they will be a home-buying force to be reckoned with.” Rising costs in rent, compounded with the desire to invest in a home to call one’s own drives millennials to purchase a home as an investment and a customizable space.
The demographic changes in home buyers are likely due to the shifts in rent affordability. Humphries said, “ As renter’s cost keep going up, I expect the allure of fixed mortgage payments and a more stable housing market will entice many more otherwise content renters into the housing market.” (Forbes, 2014). Home ownership and fixed mortgage payments allow for a sense of security and financial control, which is increasingly appealing to the growing generation of young professionals.