Ottawa County housing market may cool, but higher values remain
HOLLAND — After two years of the hottest housing market in recent memory, local estate agents suspect a cooling is coming.
But that doesn’t mean prices will drop, as many homeowners fear. Despite recession rumors and evidence that some markets are heavily overvalued, economists and pundits don’t expect declines to happen overnight.
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A recent Moody’s analysis found that samples of lower Michigan communities have significantly overvalued house prices. Muskegon was found to be 59% overvalued, ranking third in the nation. Grand Rapids, meanwhile, was overvalued by 42%.
The national median price of an existing home hit a record high in April at $391,200, up 15% from 2021. But since then sales have slowed as mortgage interest rates continue to rise. increase. Inflation, too, is causing headaches for first-time homebuyers, forcing them to spend more on groceries and gas.
“I think we’re going to enter a much more balanced market,” said Rachel Gallegos, a native of the lake and real estate agent. “I think it’s still going to be a seller’s market for the foreseeable future, but we’re already starting to see tired or overpriced buyers.”
Gallegos thinks overvalued properties in Muskegon and Grand Rapids don’t necessarily reflect Ottawa County values.
“I think anytime you walk into a big city, the market is usually going to be a little warmer than what you’re going to see in more rural counties,” she said. “We’ve seen this across the board. Of course, none of us really have a crystal ball, but we have a lot of economists looking at this data and this story for a living.”
That said, Gallegos expects a cooling this summer, with four or five offers on houses instead of dozens.
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“The past six months have been the craziest we’ve seen,” she said. “I don’t think you’re necessarily going to see values or prices go down, unless a seller has unrealistic expectations and needs a price reduction. But they will go up more slowly.”
Knowing the true value of a home, Gallegos said, is a tricky thing.
“A house is worth everything someone is able and willing to pay,” she said. “Who determines the value? The community or the buyer? Ultimately, it’s the buyer.
“Going forward, I think buyers will still be willing to pay top dollar, but I don’t think we’ll see $30,000 more than list price. We might see $5,000 or even pay list price .”
Gallegos encourages struggling buyers to keep trying.
“Buyer fatigue is very real and very difficult,” she said. “But I’ve always believed that the house that’s right for you, you’ll get it. And waiting, at this point, could end up costing purchasing power. If our values continue to rise, even at a faster rate slow, and interest rates continue to rise, buyers will have less money to work with.”
The difference between falling prices and a cooling, Gallegos said, is key.
“I think that’s where the general population gets confused,” she said. “A market drop doesn’t mean values will go down. It just means things will slow down – and that’s what we want. We want some stability in the housing market.”
— Contact journalist Cassandra Lybrink at [email protected] Follow her on Instagram @BizHolland.