Kent County home sales cool off, prices still rising

GRAND RAPIDS, Mich. (WOOD) — Last summer, homes were selling so fast realtors often didn’t even bother putting those ‘for sale’ signs out.

One of the big changes between last summer and this summer is the rising interest rates, which is making the leap into home ownership that much harder.

Paul Isely, the associate dean of undergraduate programs at Grand Valley State University, has kept an eye on all aspects of the West Michigan economy for years.

When it comes to the housing market, he said the rise in interest rates is not the only factor that is starting to slow the market.

“When you add in the increase in the price of the houses compared to last year, you’re now talking a $600 a month increase compared to what somebody would have paid last summer.”

The most recent sales numbers show nearly 900 homes sold in Kent County in June, down 9% from a year ago.

Even as sales level off, prices are still rising, up 9% to an average of $358,000.

Isely says other parts of the country are seeing their housing market cool off faster than West Michigan. He believes that’s because we have a large number of Millennials, particularly in Kent County, who are in the market for their first home.

“Because we have such a large portion of our population that is in that age range, it’s going to help support our prices here in Kent County than what we see in other parts of the country,” said Isely.

When it comes to larger and more expensive homes, Isely said people in the market for those homes are not seeing their wages keep up with inflation, so they are faced with making some decisions.

“We’re starting to see people buy one size down, or one type down. There’s starting to be a little more weakness there,” he said. “Here in Kent County there is still a lot of strength on both sides, it’s just getting weaker on the top than it is on the bottom.”

Isely said the last year has been shocking for those watching or participating in the market because we’re not used to seeing prices rise as fast as they have.

“Where we are now is, we’re going to have a higher price environment going forward,” he said.

Isely said although the wages of people in the top half of the market aren’t keeping up with inflation, they have a lot of equity in their homes to put back into the market if they’re looking to upgrade.

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