2018 Finds Kalamazoo Housing Market Low On Inventory
The Kalamazoo housing market is looking more and more like a seller’s market in 2018 -largely due to a shortage in inventory. The supply and demand issue is not just a local phenomenon. In fact, a shortage in single family homes is evident nati
onwide. Housing prices are predicted to rise anywhere between 2% – 6% nationally and approximately 2.5% – 3.5% in Kalamazoo County. This is on top of the 5% price increase the county saw in 2017.
The Kalamazoo housing market ‘s vicious circle.
The low inventory is partially due to home sellers holding back on moving out because they can’t find a suitable home to move in to. This circular effect on supply and demand has driven home prices up. Another component of the lack in available housing is that new construction has not been able to keep up with demand.
Nationally, home builders are changing their focus. They recognize a growing need for affordable homes with smaller floor plans. However, their previous focus on large, high-end homes means these are the homes currently on the market. While these houses contribute to inventory, they are out of price reach for the majority of home buyers.
In addition to sellers not selling, and builders beginning to build more homes in a generally affordable range – West Michigan is enjoying a strong employment and population growth. This means more people are attracted to the area – which is great! Unless of course you’re trying to buy a house. Then the influx of people means more competition for the existing number of houses.
Buying a house in our local area may also be impeded by the expected expected increase in mortgage rates. Many economists predict the loan rate may reach as high as 4.5% by the end of 2018.
Relief in sight
Relief may be in sight as we head into the Spring and Summer of 2018. These are traditionally the prime selling seasons in our area. While a “glut” of homes on the market is not expected, we should see more inventory than we’ve had through Januar
y and February. In addition to existing home sales, look for builders to have new construction homes available in the Spring as well.
On the other hand…
If you’re a seller in the Kalamazoo housing market you’re in a great position. This kind of market provides you with the opportunity to really get the most out of your real estate investment. Even if you haven’t thought about selling in the past, 2018 might provide you with enough financial incentive to make a move.