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Modern House


The Michigan Real Estate Market Is Getting HOT!

In Michigan right now, It’s cold out, it’s snowy, we’ve had some below zero days, And just when we thought things were slowing down and cooling off in the Michigan real estate market, it starts getting hot and bothered again, let’s talk about why that is.

The Michigan housing market is throwing out heat waves and making a lot of people sweat these days, which may be a little contradictory based on the cold weather we’ve been having. But the question is why? Seasonality affects the northern states quite a bit when it comes to home buying and selling, and our housing markets don’t usually kick back up until mid to late march or even the beginning of April, and that’s the time where homebuyers shake the frost, and jump in feet first once those flowers start blooming, but for some reason, once that ball dropped for 2024, people started to hit the ground running.

I’ve been talking to several agents in my office, as well as others around the state, and I ask them, what are your thoughts on where the Michigan real estate market is right now? And all of them have said it feels like spring and it’s just a very goofy time right now. 

As you know, people have been on the sidelines for well over a year once the interest rates shot up, which really put this housing market in between a rock and a hard place, because buyers weren’t buying and sellers weren’t selling, especially when they capitalized on such a great interest rate years back, but for my 2024 so far, it’s starting to feel a little like that pandemic market again. I have had several clients in all price points ranging from a starter home around $200,000 to well over $600,000, face the bidding war nonsense once again, where offer deadlines are being thrown out there, listing agents are asking for appraisal guarantees, which is when you agree to pay out of pocket if the appraisal comes in low, people waving inspections, being outbid by all cash offers, as well as people selling their children. (okay maybe not that far I hope).

We’ve thrown in several offers and they got outbid every time, because they weren’t willing to empty their bank accounts to get their offers accepted, which is understandable but also unfortunate that it’s come to this. January and February (even the end of December with the holidays) is always the time that buyers and sellers that aren’t too serious wait for the snow to melt, while the serious people continue their searches with the ability to see a home several times, put in under asking price offers, and just have a lot more flexibility when it comes to an offer strategy since the competition is always much much less. 


So what’s a reason why buyers are flooding to the market again like a Target Black Friday deal? Well, for starters, the mortgage rates. And you might be like what are you talking about they’re still in that 6.5 to 7% mark which is gross, and I feel you, but they were also over 8% not too long ago too, so they’ve come down quite a bit, and once the headlines said mortgage rates under 7%, there was quite an uptick of homebuyers that hit the market, and that was in mid-December when that first happened, but of course people thought they’d just wait until after the holidays and here we are. And I know it’s not the 2-3% interest rates we all want and love, but in an affordability sense, this drop has made quite a big difference in affordability, If I pull up this bank rate calculator real quick, with a home price of $250,000 let’s say, with a 3.5% down payment as if they are a first time home buyer, over the course of 30 years at a 6.5% interest rate, we are looking at a mortgage payment of around $1,755 a month minus private mortgage insurance and utilities. If we jump that interest rate to 8.1%., keeping everything else the same, it jumps to $2,018 a month. That’s a $263 increase to your payment each month and almost $3200 a year. That’s tough for a first time home buyer, no matter what market you’re in.


Another thing I have been getting asked by several agents who are friends of mine across the united states is, what does the investor situation look like in Michigan? We see these national headlines about how these big corporations plan to buy up over 40% of the real estate nationwide and turn the United States into a big rental cash cow lining the pockets of the big corporate executives, but where does Michigan sit in that mix? Recent data provided by corelogic shared the home investor shares across the united states, with places like California, Washington DC, Georgia, New Mexico, Texas and Nevada leading the way with over 30%, whereas Michigan is lower around 21%. So for now, when it comes to the nation as a whole, Michigan is not a direct priority for investors based on this data, but I can most definitely see this percentage increase much higher over the years, especially with headlines of Detroit being names the fastest appreciating housing market, which surpasses Miami at 9.2%, which is absolutely insane, and that yields a lot of opportunity for people who are looking to invest with a low barrier of entry, since home prices in that area aren’t much and adding a minimal amount of value oftentimes leads to a pretty good payout that you can then rinse and repeat.

It’s a wonderful thing for Detroit and their comeback, but it turns a lot of heads for investors not only nationwide, but world wide too, and I’m not exaggerating that, as I have received several calls and inquiries over the last few months from investors wanting to purchase in metro Detroit. This market yields a lot of opportunity for investors who have the capital, because with rates this high, especially in comparison to a few years ago, I’ve noticed that there’s a lot more homes hitting the market these days that require quite a bit of work, and aren’t as move in ready, so not only are first time home buyers and other buyers who are financing, struggling to budget for homeownership in general, they need to budget for the repair and renovation costs as well, while trying to maintain an emergency fund for what if. 


Circling back to the interest rates again, another reason the Michigan housing market is getting spicy again is simply acceptance. There were so many articles, headlines, and forecasts that the housing market was going to crash like 2008 and you could get in a home for pennies on the dollar, everyone waited for it and waited as if they were reading off the winning numbers to the Powerball jackpot. Well, it’s the beginning of 2024 and it still hasn't happened, and from what experts are saying, it probably won't, and with that being said, there’s been a sense of acceptance for where the rates are and the direction they’re going. Because now in the news and media, they have surfaced another scare tactic relating to serial investors buying up all the houses so you don’t have the chance to own one, and it’s making people hurry, and settle on something they don’t even want. I’ll reiterate this again as I do in several of my housing market videos, buy a home when you are financially and emotionally ready to, not when the news, media and professionals tell you too. Be conscious of the local market you want to live in and realize all these national headlines will most likely not affect that specific area you’re looking for a very long time or at all.  

Interest rates, and scare tactics. What other reasons are driving the Michigan housing market?


Well, this may come as a surprise to you, because I have mentioned in other videos that there’s more people leaving Michigan than there are people coming to Michigan, but the U.S census bureau released data at the end of 2023, saying Michigan’s population grew in 2023 after years and years of decline, which allows us Michiganders to hold the title of being the 10th largest state by population. A lot of it has to do with not as many deaths, but there was also a slight bump in international migration which is something I have noticed myself, as someone who helps people move to michigan, and it’s been from all over the world too which is awesome. I have been helping people move to Michigan for several years and at first a lot of it was helping people reunite with their families or taking up a job opportunity, but these days, more people are reaching out to me simply because they want to live here.

They have no job opportunity, or family, they just see the value in being a Michigander, and I can’t blame them in the most biased way possible. 


Some of you Michigan locals have been asking how this changing housing market will affect you, and if it’s a time that would be beneficial to sell or not, and my answer is yes to the selling part, and that’s not because I’m just a Realtor who wants to sell your house, I simply look at the data to help you make the most informed decision possible. I also work with buyers everyday in all price points, so I have a sense of what that buyer behavior looks like.

In data sense, A graph from the MLS shows homes for sale over the last 5 years in a few of the counties I service in southeast Michigan, and looking at the data you can see that there’s been a 11.6% decline in the entire MLS over the last 12 months, a 12.7% decline in Livingston county, 19.3% decline in Oakland county and a 15% decline in Washtenaw county. The bottom line is, we need more inventory, the demand far outweighs the supply even in the colder months, it doesn’t matter if you sell now in the colder months or wait for the warmer months, you will most likely get multiple offers over asking price if your home is priced accordingly and I say that with certainty, because I see it everyday.

And of course there’s home’s that have been sitting awhile, it happens. They either have something extremely wrong with them, or the home wasn’t priced correctly to begin with and the seller is not budging either. That is not an assumption, I recently just reached out to probably around a hundred or so agents in my market who have had homes listed between 80 and 200 days, asking them why the home is still listed. Of course several didn’t answer and probably thought what’s my angle, but the others have said the seller simply won’t budge on the price and they think their house is worth X amount, when it’s actually worth Y. A lot of them are also new construction homes that are too be built, but even in that situation, they are priced too high, as custom home builders are putting thousands of dollars into a home for its fancy finishes that will most likely only catch the attention of a unique buyer who values that type of finish. Moral of the story is, keep the emotions out of it (that’s a hard ask I know), but take the data and buyer behavior into account when pricing a home, it will keep your home from sitting on the market and becoming stagnant.


And speaking of New construction, there’s questioning about where that’s going to go, and my thoughts are with this feeling a little bit like the pandemic market, I have a feeling that there’s going to be new promotions and incentives that you’ll see marketed by builders everywhere, as rates go down, just to get more foot traffic. A lot of the communities are still priced fairly high, so I’m seeing a lot of unfinished communities, but at the same time, I’m seeing a lot of sold out ones and it has a lot to do with the builder that’s doing the community. Side note with new construction, I have a few clients right now in the building stages of their home, not only are they experiencing heavy delays in just getting to the groundbreaking, due to labor constraints, they are also having to delay it even further because the options and upgrades they set out to get are either backordered, or the builder simply doesn’t use them as a supplier. So something I would highly recommend is asking the sales representative or your buyers agent to figure out approximately how long the builds are taking on average from start to finish and deciding if that’s a wait you’re willing to take. I have had a lot of clients with high expectations of getting in the home within 10-12 months despite being told the possibility of delays to find that it’s more like 14-16. So if you’re in a time crunch, this may be something you have to rethink or find another community to build in.

I know I just threw a lot of information at you, but you might be thinking, okay Andrew how am I affected by this and what should I keep in mind as I navigate this housing market?


Wonderful question. Understand that with rates dropping and the inventory being low, you’ll most likely face some bidding wars, over asking price offers, the need for a higher initial deposit, appraisal guarantees, etc. And immediately you’re probably thinking you don’t have the budget or care to offer over asking price, and I hear you, so with that in mind, it comes down to compromise. I’ve noticed a lot with buyers today that there’s this high expectation and grocery list of items they want in a home, and in a market where inventory is slim, the shorter the list, the more options you have, and that comes down to really taking the time to know what your wants and needs are, and understanding that you most likely won’t get everything on that list, maybe there 2-3 things that this house and location don’t have, but it checks 7-10 things it does have. That would be a home or area you should heavily consider moving forward on.

And if you’re interested in something, don’t wait to look at it, schedule a showing as soon as possible, because I have noticed a lot of agents just accepting the first offer that comes in, instead of dealing with numerous offers, so that becomes an opportunity for you. This is a time to act strategically, know exactly what you need in a home and why, be proactive with home showings, don’t throw all your money at a home simply because of what it’s listed at, and don’t get discouraged, it takes a little longer to get a home these days, so be patient, I can attest to this as I have helped several buyers get into their homes who thought it would never happen, so don’t lose hope. 

For those of you watching, what has been your biggest struggle in today’s housing market? Drop your thoughts below.

Thanks as always for reading, if you ever need any help buying, selling or investing in the fine state of Michigan, don't hesitate to reach out. Until next time!



Andrew McManamon is a Michigan REALTOR® with Signature Sotheby’s International Realty and provides real estate services to Buyers, Sellers and Investors throughout SE Michigan including Livingston County, Oakland County, Washtenaw County, Genesee County & beyond. Andrew has become one of the pillars when it comes to Michigan real estate. Prior to his real estate career Andrew was responsible for managing a senior living facility in Brighton, Michigan as a dining supervisor and an activities assistant. Andrew’s passion to help people is unlike any other, and he continues to strive to be best resource he can be. Andrew graduated from Cleary University in Howell, Michigan with a double major and currently resides in Brighton, Michigan.

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