By David Fleet
dfleet@mihomepaper.com
Brandon Twp. — Home buyers across southeastern Michigan should see a mixed set of opportunities for the upcoming new year.
Jeff Dawley, owner of Atlas Real Estate, 8491 S. State Road, Goodrich has worked in the area market and The Citizen readership area for more than 40 years.
“There is a sort of a ‘gridlock’ in the home market out there,” said Dawley.
The blend of raising home prices, low inventories coupled with higher interest rates have stymied the market., he added.
“It’s been ongoing,” he said.
Dawley’s local real estate analysis is reflected in the 2024 year end data released last month from Realcomp, which represents 16,000 Realtors and 2,600 offices across Michigan.
Across Atlas, Brandon and Groveland townships along with the Villages of Goodrich and Ortonville realized a jump from an average home price of $296,000 in 2023 to $318,000 in 2024.
In 2022 there were 134,000 units for sale in Southeast Michigan down to 105,000 in 2024.
“Our local prices are up about 7%,” said Dawley. “It’s not all gloom and doom out there. There may be some positives on the horizon.”
Dawley said that while there are few absolutes or guarantees, he suggests a forecast for mortgage rates to decline gradually though 2025.
“The easing of interest rates along with a moderation of home prices and increasing home inventories across the area will all contribute to a more balanced environment for home buyers and sellers. And hopefully less gridlock,” he said. “Home prices are anticipated to continue rising, but at a slower pace than in the past. Plus, inventory levels are expected to see an increase of over 11% from 2024.”
Dawley added, a decline in mortgage rates from the current 7% to about 5% would help bring the market back in balance.
“Sellers are reluctant to put their property on the market because of their current low interest rates,” he said. “Rates are significantly higher.”
“The housing market is cyclical and history shows things will improve,” he said. “But the million dollar question is, ‘how soon?’”
While the local existing home market remains in a gridlock building a home also has challenges.
Residential permit data, compiled by the Home Builders Association of Michigan announced that last year’s single family home production in the state grew by 5% over 2023. HBAM also noted that the median (or typical) single family home price for a newly constructed home was $448,520. This compares to a median price of $375,352 in 2023.
The 2024 new home construction permits were at the highest level since 2021, according to their reports.
“Given the fact that interest rates remained relatively high last year and building costs continued to rise, these numbers might surprise some people,” said Home Builders Association of Michigan CEO Bob Filka. “Demand and the need for housing remains high and with fewer existing home purchase options for people, we’re seeing new home construction stay steady in most parts of the state.”
Filka stated that due to the escalating cost many Michigan households are unable to afford newly constructed homes.
“To qualify for financing on the typical home being built in our state today, most will have to have a household income of more than $143,000,” he reported. “That’s nearly double the median household income in our state.”
Jim Hill, owner of Hill Building and Properties, 457 Mill St., Ortonville has constructed homes in the area for more than 30 years.
“Right now it’s a solid three to four months process before digging a basement,” said Hill. “Material supply is excellent and available through the end of 2025. However, the costs are eking up 3% to 8% this year. It’s going to be a wait and see with regard to possible tariffs.”
Finding vacant land to build on in Atlas, Brandon, Groveland townships or the Lapeer area can be a challenge.
“Five to 10 acres are the lot sizes most buyers are going for,” he said. “Also, take the builder with you and walk the property before you start, they see things you don’t. Typical for the area are long driveways with the home on the back third of the property. Keep in mind the utilities need to go farther and the amount of drive aggregate needed is greater. This adds to costs.”