Grand Rapids Housing Market Update
Housing prices are moving up in value throughout Grand Rapids, MI. If you are looking at buying a house in Grand Rapids as a potential investment opportunity, you must read it till the end. Grand Rapids in Michigan is home to around 200,000 people. That makes it the second largest city in the state and the largest on the west side of the state. However, the Grand Rapids housing market includes the larger metro area that is home to around a million people.
The Grand Rapids-Wyoming metro area includes Kent County, Barry County, Montcalm County, and Ottawa County. Let's take a look at some of the real estate market data and trends in Grand Rapids, MI. Grand Rapids is the fastest-growing community in Michigan. The main factors are affordability, employment growth, and low vacancy rates. It was ranked as the top housing market nationwide by Trulia in the same study in 2017.
Single-family detached homes are the most prevalent housing type in Grand Rapids, comprising 58.47 percent of the city's dwellings. Also prominent in Grand Rapids are big apartment complexes or high-rise apartments (19.98 percent), duplexes, homes converted into apartments or other small apartment buildings (16.34 percent), and a few row houses and other connected residences (4.80 percent), according to NeighborhoodScout.
- Average Rent: $1,347 / per month
- Grand Rapids Per Capita Income = $26,556
- Median Household Income = $51,333
- Total Population: 198,917
- Owners = 52%
- Renters = 48%
- Vacancy = 6.5%
- Single-Family Home = 58.47%
- Townhomes = 4.8%
- Apt. Complexes = 20%
Creston, West Grand, and South East End are some of the greatest neighborhoods in and surrounding Grand Rapids, Michigan. Consider purchasing or renting a house in one of these desirable communities. In April 2022, the median listing price of a property in Grand Rapids, Michigan was $239,900, an increase of 15.3% year-over-year.
The median asking price per square foot for homes was $148. Realtor.com currently features active properties in 28 Grand Rapids neighborhoods. With a median listing price of $437K, Downtown Grand Rapids is the most expensive neighborhood. The most inexpensive neighborhood is Madison Area, with a median listing price of $185K.
Grand Rapids Housing Market Forecast 2022-2023
Grand Rapids is poised to attract people and have strong demand for housing in the market. Investing in Grand Rapids rental property can yield a favorable return on investment. Grand Rapids has enjoyed some of the greatest home appreciation rates in the nation over the past decade. Grand Rapids real estate rose 139.23 percent during the past ten years, which equates to an average annual home appreciation rate of 9.11 percent and places the city in the top 10 percent nationally for real estate appreciation.
- Considering only the most recent twelve months, Grand Rapids appreciation rates were at 21.91 percent.
- It is more than 79.97 percent of the nation's cities and towns.
- The most recent quarter's Grand Rapids appreciation rates were 7.51 percent,
- It amounts to an annual appreciation rate of 33.58 percent.
The typical value of homes in Grand Rapids is $262,987 (ZHVI). Grand Rapids home values have gone up 17.7% over the past year and 191.5% over the past decade. The MSA comprises four counties which include the central county of Kent, and the outlying counties of Ionia, Montcalm, and Ottawa.
- The typical home value of homes in Grand Rapids-Wyoming Metro (49514) is $307,743, up 18.5% over the past year.
- Zillow predicts that Grand Rapids-Wyoming Metro home values may rise by 10.5% by May 2023 (ZHVF).
- Wyoming home values have gone up 20.3% over the past year and are currently holding at $247,893.
- Kent County home values have gone up 17.6% over the past year and are currently holding at $308,077.
- Ionia County home values have gone up 18.2% over the past year and are currently holding at $212,628.
- Ottawa County home values have gone up 22.6% over the past year and are currently holding at $341,015.
- Montcalm County home values have gone up 13.9% over the past year and are currently holding at $192,832.
Highest Appreciating Grand Rapids Neighborhoods Since 2000: By Neigborhoodscout.com
These are the best neighborhoods in Grand Rapids for long-term real estate investment because they have the highest appreciation rates.
- Midtown
- Heritage Hill South
- Belknap Lookout
- Heartside
- South Hills
- Ottawa Hills
- East Hills
- Eastown / Aquinas College
- West Grand South
- Creston Heights
Grand Rapids Real Estate Investment Overview
If you are looking at buying a house in Grand Rapids as a potential investment opportunity, the city is one of the strongest in the state in terms of continual property value. Grand Rapids housing market is a relatively affordable place to invest. In May 2022, Grand Rapids home prices were up 15.8% compared to last year, selling for a median price of $275K (source: Redfin). On average, homes in Grand Rapids sell after 6 days on the market compared to 6 days last year. That is well below the national average.
Yet demand is such that property values are increasing. The steady demand for properties will keep the prices for homes in the Grand Rapids real estate marketing growing at least at the rate of inflation for the foreseeable future. This is excellent news since it protects the value of your investment. Here are some of the reasons to invest in Grand Rapids real estate.
The Relatively Strong Local Economy Propels Growth
The unemployment rate in Grand Rapids is less than 5%. As of April 2022, Grand Rapids, MI Unemployment Rate is at 4.20%, compared to 4.30% last month and 6.60% last year. This is lower than the long-term average of 7.45%. The low unemployment rate attracts people from across the area, fueling demand for Grand Rapids rental homes. Why is Grand Rapids growing? It is home to a large medical sector, an industry that grows as the population ages. The city has always had manufacturing, but they’ve been somewhat diversified. There were multiple major furniture manufacturers, colleges, and brewers in the area, but the city leaders sought to attract other businesses, as well.
The Student Market That Is Sure to Grow
Any city with a large university will have a strong rental market catering to students, and the Grand Rapids real estate market has that due to schools like Aquinas College, Grand Rapids Community College, Calvin College, Davenport University, and Cornerstone University. However, they build upon it with the MSU medical school that relocated here in 2017 and the multiple affiliated research facilities.
If you want to rent to students in the Grand Rapids real estate market, you can also look to the suburbs and house students from the massive Grand Valley State University campus; which has over twenty thousand students. Grand Rapids is a great place for investing in Airbnb rentals as well. There aren’t any strict Airbnb regulations set as yet. Anyone who wishes to rent out a room or property on Airbnb in Grand Rapids must receive a license from the city.
Healthy Demographic Trends Keep It Going
Detroit was once the fifth largest city in the United States. It has fallen to 20th place with fewer than 700,000 people. In comparison, Grand Rapids is gaining population. Grand Rapids has a 2020 population of 203,644. It is also the county seat of Kent County. Grand Rapids is currently growing at a rate of 0.43% annually and its population has increased by 8.32% since the most recent census, which recorded a population of 188,007 in 2010.
Grand Rapids is expanding and is consistently regarded as having one of the nation's best and fastest-growing economies. The development of the downtown area is keeping pace with this increase. This means that the Grand Rapids housing market would be seeing increasing demand for property and increasing rental rates. The Grand Rapids area has a strong economy and a younger than the average population.
It is seeing many residents choose to trust in the future and have children. This explains why two-thirds of its growth is due to births, not migration. This is partially due to people moving from areas lacking jobs hitting the stronger Grand Rapids economy before choosing to have those kids they always wanted. This will fuel demand for the Grand Rapids real estate market for years.
There Is Room for Rental Rates to Grow
The Grand Rapids housing market is notable for the relatively large share of homeowners. About a third of Americans rent, whereas only a quarter of locals does. This creates strong demand for the rentals that do exist by those who cannot or will not buy a house. It also limits turnover among long-term residents. In contrast, the rapid abandonment of other Rust Belt cities allows home buyers to have their pick of properties.
As of June 25, 2022, the average rent for a 1-bedroom apartment in Grand Rapids, MI is currently $1,300. This is a 13% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Grand Rapids remained flat. The average rent for a 1-bedroom apartment increased by 2% to $1,300, and the average rent for a 2-bedroom apartment remained flat. This shows Grand Rapids rental properties are downright affordable. Grand Rapids also provides a lower cost of living than much of the rest of Michigan.
- The average rent for a 2-bedroom apartment in Grand Rapids, MI is currently $1,400. This is a 10% increase compared to the previous year.
- The average rent for a 3-bedroom apartment in Grand Rapids, MI is currently $1,695. This is a 17% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Grand Rapids, MI is currently $1,995. This is a 10% increase compared to the previous year.
Relatively Low Property Tax
Located in western Michigan, Kent County contains the city of Grand Rapids and has property tax rates lower than many of Michigan’s other urban counties. Kent County’s average effective tax rate is 1.51%. At that rate, a homeowner with a home worth $150,000, about the median home value in the county, would pay $2,265 annually in property taxes.
Conclusion
Detroit may have once been the poster child for Michigan, the truth today is that Grand Rapids is leading the way. Its diverse, growing economy is fostering a steadily increasing population and a strong housing market that are one of the best in the country for mid-sized cities. Different neighborhoods of Grand Rapids, MI have different aspects at play but for the most part, you can have a quality house to rent out. And if you decide to flip it in the future, you are likely going to get a favorable return on investment with the property you purchase, no matter the location in the city.
Buying an investment property is different from buying an owner-occupied home. The investment properties are designed to make money as rentals, which means you must look at it solely as an income-producing entity just like any other business. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor is your ability to find great real estate investments. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities.
Apart from the Grand Rapids real estate market, you can also invest in El Paso, Texas. El Paso real estate is affordable with several large renter populations. Demographic growth and job growth are attracting residents to a market that can’t grow with demand, and that makes it an excellent opportunity for investors. El Paso is notable for its affordable real estate market. The average pay is well below the American average income, but houses are cheaper, too.
Let us know which real estate markets you consider best for real estate investing! If you need expert investment advice, you may fill out the form here. One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
- https://www.zillow.com/grandrapids-mi/home-values
- https://www.neighborhoodscout.com/mi/grand-rapids/real-estate
- https://www.redfin.com/city/8694/MI/Grand-Rapids/housing-market
- https://www.realtor.com/realestateandhomes-search/Grand-Rapids_MI/overview
- https://www.experiencegr.com/meetings-blog/post/grand-rapids-is-growing-and-people-are-noticing
- https://www.mlive.com/news/index.ssf/2018/05/detroits_population_still_fall.html
- https://realestate.usnews.com/places/michigan/grand-rapids
- http://www.city-data.com/city/Grand-Rapids-Michigan.html
- http://humanmedicine.msu.edu/
- https://www.collegesimply.com/colleges-near/michigan/grand-rapids
