Are You Ready for Michigan’s 2021 Real Estate Market?
Michigan’s real estate market has been resilient throughout the year, despite the pandemic, leading to high home sale prices and added equity to Michigan homes. Over the last year, the state has seen a home price appreciation of 7.0%, and an increase of 37.0% over the last five years. This continued growth highlights the stability of the housing market even when facing challenges like the pandemic.
Entering 2021, what should Michigan real estate agents expect?
2021 Michigan Real Estate Outlook: Hot
Both home sale prices and median home prices increased throughout 2020, despite the rocky start of the year. The median home sale price rose to $192,104 while the median home price reached $172,480. Michigan’s year-over-year rent prices increased 4.5%, bringing the state’s average rent price to $1,150, which is still 30.3% lower than the national average.
While home sales and home prices have increased, 3.8% of Michigan homes have negative equity, which is moderate compared to the rest of the country. The number of homes with negative equity is expected to decrease as home sales and home sale prices drive the value of homes up over the next year.
Delinquency rates in Michigan are also some of the lowest in the country (0.7%) amid record-breaking unemployment rates in the state this summer. The Great Lake State’s unemployment rate has had its ups and downs; falling from this summer’s high of 20.0%, it was last recorded at 8.6% in the third quarter of 2020. This sharp decline in the unemployment rate is a beacon of hope for Michigan residents and its economy. It’s also worth noting that the summer’s high was just shy of Great Depression unemployment rates, showing just how strong the state of Michigan really is.
2020 Michigan Real Estate Market Data
|Zillow Home Value Index||$187,747|
|1-Year Change on Home Values||+8.2%|
|1-Year Change on Rent Prices||+4.5%|
|Homes With Negative Equity||3.8%|
|Delinquent on Mortgages||0.7%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for Michigan
The current active home inventory in Michigan is well below state records, putting pressure on interested homeowners. It’s no surprise the interest in homes is so high right now, mortgage rates remain historically low, creating a buying frenzy in the state. The problem this creates, though, is that the inventory has become so low that real estate agents are having trouble finding homes that people actually want to buy.
Michigan has seen a steady growth in their population and appreciation rates. People come to the state to enjoy the great outdoors and to be close to friends and family. It also doesn’t hurt that the state ranks highly in many key categories for state power rankings. This is how Michigan shakes out in comparison with the rest of the nation:
- Second longest coastline
- Fourteenth in opportunity
- Nineteenth in economy
- Twenty-fourth in healthcare
The housing market is expected to continue to be hot entering 2021, with some fears behind the lack of inventory both hitting the market and being developed for the market. Homebuyers will need to be quick and decisive with their choices. Be prepared for a busy few months before the seasonally hot months. The added competition will put strain on both your clients and yourself.
Take On 2021 With the Best Michigan Real Estate Courses From The CE Shop
Enroll in our Pre-Licensing program now to get your career started and begin connecting your fellow residents with the home of their dreams. Or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to stay up to date on everything in Michigan? Join the Midwestern Real Estate Facebook Group!