Michigan housing market: Everything you need to know
Known for its automotive history, rich musical tradition, college-sports rivalries and serene lakeside landscapes, Michigan is a unique state with plenty to offer. That includes home prices well under the national median.
One interesting anomaly about the Great Lakes State? Unlike most states, where the major metro areas boast the highest prices, the opposite is true here: Some of the most affordable Michigan houses are in and around Detroit, the state’s biggest city by far.
Whether you’re planning a move here or looking for a new place to call home, it’s helpful to understand what’s going on in the Michigan housing market. Here’s what buyers and sellers need to know.
Michigan housing market overview
Overall, home prices in Michigan are on the rise, according to data from Michigan Realtors. However, there’s still something for everyone in this state’s diverse housing market. In certain pockets — like Ann Arbor and Grosse Pointe — home values are above the countrywide median. But there are many more affordable areas with average prices of much less, including Battle Creek, Grand Rapids, Kalamazoo and the Upper Peninsula. And in Detroit, the average home price in July was a shockingly low $114,984.
Michigan housing trends and stats
- As of July 2023, the average sale price in the state, according to Michigan Realtors, was $284,042.
- That’s up 2.21 percent year-over-year, but it’s still still quite a bit lower than the nationwide median home sale price, which as of July 2023 was $406,700, according to the National Association of Realtors.
- Redfin data from July shows a sale-to-list ratio of 100.3 percent, meaning that homes in Michigan are selling for very slightly above their list price.
- Homes are spending about 18 days on the market, Redfin says. That’s about the same as last year, when houses took around 19 days to sell.
- Closing costs in Michigan are about 2.7 percent of a home’s sale price, according to data from CoreLogic’s ClosingCorp. For an average-priced $284,042 house, that comes to $7,669.
Should you buy or sell in the Michigan housing market?
There’s quite a bit to consider when it comes to deciding whether to buy a home in Michigan, or sell one. Here’s how the current housing landscape is impacting buyers and sellers in the state.
If you’re a home seller
As a Michigan home seller, you’ll be happy to hear that property values in Michigan have been rising recently. In fact, median sale prices have increased by more than $75,000 in the five years between July 2018 and July 2023, according to Redfin.
Michigan’s limited housing inventory is another thing working in your favor right now. There’s currently just a two-month supply of available homes, per Redfin, which is far below the five-to-six months needed for a balanced market and gives the advantage to sellers.
Even though you have these factors on your side, it’s still important to have a plan before entering the market. Do some research to make sure you have a solid idea of how much your house is worth. An experienced local real estate agent can help you choose the best asking price for your home.
If you’re a homebuyer
When you’re buying in a seller’s market, you need to be as prepared as possible — and that starts with knowing how much you can afford to spend on a house. Several factors will influence your budget, including where you’re looking to buy, how much money you earn and how much debt you have. Your mortgage interest rate and the size of your down payment also play large roles — rates are higher than they’ve been in 20 years, which greatly increases the size of monthly mortgage payments.
Getting preapproved for a mortgage is another smart way to prepare for the buying process. A preapproval outlines how much money a lender is likely to be willing to let you borrow for your home purchase. Being preapproved also signals to sellers that you’re a legitimate (and qualified) buyer.
It’s also smart to have a good grasp on the cost of daily living expenses in whatever Michigan city you’re buying in. For example, according to Bankrate’s cost of living calculator, the cost of living in Ann Arbor is 7.97 percent higher than it is in Grand Rapids, and the cost in Detroit is 12.43 percent higher than it is in Lansing.
Michigan housing market predictions
If the last few years have proved anything, it’s that it can be difficult to accurately predict the real estate market. With that said, there is something that most economists and real estate experts agree on: A housing crash is not likely. When the housing bubble burst 15 years ago, supply was higher than demand, which led to a steep decline in home values. But these days, that level of inventory simply isn’t there, and demand far outpaces supply.
Still, it’s important to acknowledge that the Michigan market has been slowing down. Data from both Redfin and Michigan Realtors shows that the number of homes sold is down by about 18 percent year-over-year.
Find a Michigan real estate agent
Even if you’ve bought or sold a home before, navigating today’s market can get complicated. Working with a knowledgeable local real estate agent can make things much easier. Agents are licensed professionals who understand the ins and outs of their local market and can guide you through the buying or selling process.
Start your search for an agent by asking friends, family, colleagues and neighbors for referrals. Look for well-reviewed local agents online, too, and take note of names on “sold” or “for sale” signs in your desired neighborhood. Before hiring someone, take the time to interview multiple candidates and ask about their experience working with clients like you.
FAQs
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Michigan home prices dropped steadily in the second half of 2022, but they’ve been on the rise since the beginning of this year, according to Redfin data. July’s median sale price is about 2 percent higher than in July of last year.
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Supply is low and mortgage rates are high, making it more challenging to purchase a home in Michigan right now. However, the good news is that home prices here are still quite affordable compared to the national median price: Michigan Realtors reported July’s average sale price in the state as $284,042, which is significantly below July’s national median of $406,700.
