Buy A Home In Michigan

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Buy A Home In Michigan
Buy A Home In Michigan

Buy A Home In Michigan – A $200 monthly rent increase has Tracy Dewees thinking about leaving the townhouse in southeast Grand Rapids where she and her son have been happy for a decade.

But what made him move was an extra $300 a month when he had to renew starting next year.

Buy A Home In Michigan

Buy A Home In Michigan

“I knew I had to get out because I couldn’t live there,” Dewees said.

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So he decided to buy a house. After looking at 55 houses — and making nine offers — the Dewees moved on to a house near the John Ball Zoo in southwest Grand Rapids last spring.

Dewees, who works in the insurance industry, wanted stability in her mortgage payments and knew her budget couldn’t absorb hundreds in rent.

Since then, apartment rental rates have increased an average of 12 percent in Michigan. But home prices are rising sharply: 10 percent this year, according to March data from the Michigan Association of Realtors. The result: heartburn and higher prices for residents considering an option.

A lack of housing availability has been blamed for a heated sales market, but the situation is worsening among renters struggling to find affordable rental options.

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The situation could lead to a new wave of first-time buyers. The National Association of Realtors estimates that 34 percent of home purchases so far in 2022 will be made by first-time homeowners, up from 31 percent a year earlier.

That doesn’t surprise Adam Paarlberg, president of GreenRidge Realty in Grand Rapids. The fear of missing out, or FOMO, is “real,” he says.

For a while, low housing inventory in Michigan made buying a home competitive. Now, rising interest rates add to that sense of urgency. He said that as much as possible, the rent rate is increasing.

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“If prices continue to rise, it may mean that the house is worth a little bit more to wait any time,” Paarlberg said.

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The decision comes at a “terrible time,” said Glenn Silvenis, a broker and agent at Remax Crossroads III in Belleville, just west of Detroit Metropolitan Airport. He said he’s starting to turn potential buyers back from the market, fearing they’ll pay too much before prices start to fall.

“Some people are concerned because of the price,” Silvenis said. Others, he said, want something real for their monthly payments.

“I never thought it would happen like this,” Silvenis said. “It can’t go on like this. It won’t work.

“I’m seeing it all over the place,” Dewees said of conversations and social media posts among people who want to avoid high housing costs. “Everybody’s like, ‘You know where I can go?’

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Nearly three in 10 Michigan households are renters, but the state doesn’t track how much rent increases.

Residential rentals — typically single-family homes and apartments — are a $67 billion market in Michigan, according to data compiled by the National Apartment Association. Most of them are apartments, where about 830,000 people live in the country.

Among them was Kathy O’Casey, who decided not to buy a house with her late husband Bob decades ago. Now 72, he has lived in Meadow Stone in Hastings, between Battle Creek and Grand Rapids, since moving to Michigan in 2011.

Buy A Home In Michigan

A lifelong renter, Kathy O’Casey of Hastings loves her apartment home. But he said he was surprised and upset to receive a 15 percent rent increase this spring. (Photo courtesy)

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The ground floor apartment is like a home, he said. Rent started at about $650 a month before she moved into her own home in 2017 after her husband died. The rent increases came at expected intervals and didn’t raise eyebrows, at one point his rent was up about $55 over three years until it reached $858 a month.

Then, this year, it went up to $129 a month. From July 1, they will have to pay $987 for the same apartment.

“I know the costs are going up,” O’Casey said, adding that some people in his complex are paying hundreds more a month with refurbished units. “I appreciate that.”

But, he said, this taste was different. He said he likes his house, but after opening the email with the new rates, he’s very angry. He reached out to Einhoorn Property Management in Grand Rapids to let them know the steep jump was bothering him. (The company, which operates in several states, did not respond to Michigan Bridge’s request for an interview.)

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“There’s a feeling these days that the rich are getting richer,” he said, “and that’s the way it is for me.”

The 15 percent increase was higher than the average in the market from Detroit to Lansing, where the year-over-year increase was 13.9 percent in the I-275 corridor west of Detroit; According to ALN Apartment Data, a national tracking company, 13.6 percent in Eaton County near Lansing and hovering around 13 percent in the I-96 corridor, Ann Arbor and Ypsilanti and the Downriver/Monroe market.

The Washington Post recently tracked three-year increases in several Michigan counties. During that time, a 19 percent increase was recorded in Muskegon and Calhoun counties. Kent, home to Grand Rapids, grew 16.6 percent. Grand Traverse grew 16.1 percent, and Kalamazoo County grew 16.3 percent.

Buy A Home In Michigan

The highest median rent in Michigan is found in Washtenaw County, home to the University of Michigan, where it reaches $1,475 for a two-bedroom apartment.

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Nationally, some of the increases have been particularly impressive in Florida, where five markets saw 28.5 percent annual increases or more, according to ALN. The peak was in the Fort Myers and Naples area, where rents rose 41.7 percent last year to $1,983.

Many rental property owners are seeing their unit prices rise, warranting rent increases that force their rental decisions. And vacancies, Silvenis said, mean landlords can cherry-pick tenants, seeking higher rents and credit scores.

But at the same time, many apartment owners are seeing cost increases, said Alice Nh, executive director of the Washtenaw Area Apartment Association, which represents rental unit owners and property managers.

That’s especially true for new owners who bought in the last two years and are trying to maintain profits at the industry standard of about 9 percent amid a property tax recalculation. In Ann Arbor, for example, Ehn said, a new owner will have the first six months of rental income set aside to cover city taxes. And rising loan rates are putting more pressure on what landlords can do for tenants.

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“There are so many factors working against everyone in the real estate industry,” Ehn said.

With many in Michigan recognizing housing affordability as a statewide issue, Governor Gretchen Whitmer launched Michigan’s first statewide housing plan this month. Access and affordability are key measures, with the Whitmer government estimating that 50 percent of renters pay most of their income on rent.

Ehn said he and members of his group are heavily involved in the housing industry, saying lower consumer costs require increasing housing supply.

Buy A Home In Michigan

“The only way is to reduce the rent,” he said. However, we do not see that municipalities are keen to build more units,’ he said.

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In the meantime, while some renters are seriously considering buying a home, others, like O’Casey, are wondering how high they’ll go.

O’Casey remembers the time before she and her husband faced high rent. He lived in the San Jose area of ​​California in the early 1990s, as real estate began to skyrocket.

He saw a three-bedroom townhouse he liked, but the price — just $250,000 — gave him pause. He didn’t save anything for a down payment and it felt like too much of a financial stretch.

For now, he’s still happy to be a lifelong tenant, but his budget is about to change. They have a fixed income and plan to cover rent with money used for discretionary expenses such as travel.

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He admits his pension helps him, but many people’s incomes don’t match the housing market. Average weekly wages in Michigan have increased 6.45 percent so far this year. And, as O’Casey notes, Social Security’s cost-of-living increase is 5.9 percent by 2022.

“I’m not in a situation where I’m going to be hurt by (higher rent),” he said. “I have less money to spend on what I want.”

Ali Von Au Douglas moved to Ann Arbor eight years ago, and for four years lived in a one-bedroom apartment with a fireplace and private tree views.

During the pandemic, when they work from home, it’s short. But moving into a two-bedroom apartment, he said, “open” rates are higher but not at the same level that new tenants pay when they move into a complex.

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He checked out other apartment buildings and said, “I pay more

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