The average Michigan home sale was nearly $25,000 higher in 2020 compared to 2019 as the pandemic spurred a buzzing real estate market.
Almost every corner of Michigan followed the trend, from Metro Detroit to the Upper Peninsula. But many of the hottest markets were in northern Michigan.
“That shows where people want to be,” said E’toile O’Rear-Libbett, president of Michigan Realtors. “They want land, they want wide-open spaces. And many of them want to be somewhere near water.”
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Big Rapids, Petoskey, Gaylord and Cadillac were among the regions with the biggest growth in 2020, per data from Michigan Realtors.
While up north is popular for vacation homes, O’Rear-Libbett said many bought permanent homes in those areas last year. One major factor was remote work, as many learned that being allowed to work from anywhere means they can live where they please, she said.
The 2020 trends have continued into this year. The average Michigan home sold for $189,000 in 2019, for $214,000 in 2020 and has crept up near $217,000 during the first three months of 2021.
O’Rear-Libbett is expecting home prices to keep rising in Michigan for the rest of the year.
“The competition is going to be the same or even increase as the economy opens up,” she said. “The prices are going to continue to go up.”
The database and maps below show which areas had the cheapest and most expensive home sales, and which areas saw the biggest gains in 2020.
(Can’t see the database? Click here.)
(Can’t see the average home cost map? Click here.)
(Can’t see the 2020 change map? Click here.)
There are a host of reasons why the real estate market is hot, O’Rear-Libbett said.
Demand is up because of younger people getting out of renting situations so they can have more space, among other factors, she said. Supply is down because building material prices are inflated and Michigan’s house-building pace slowed during the last recession and never recovered.
“There’s a severe shortage of inventory,” O’Rear-Libbett said. “There are just not enough houses to go around for the number of buyers who are out there looking.”
Michigan built about 40,000 new homes per year from 1995 through 2005, but has built 17,000 homes or fewer every year since 2007, per the Home Builders Association of Michigan.
The foreclosure and eviction bans also play a role in keeping home prices high, experts say.
The big question is – are we in a real estate bubble that might pop and send property values plummeting? O’Rear-Libbett doesn’t think so, although she doesn’t rule out prices dropping.
“The market historically goes up and down. So (buyers) will want to make sure they’re going to be (in their new house) for a while, simply because it takes a while for equity to build up,” she said. “They don’t want to get into the problem of having to sell the property and it being a short sale.”
While home prices were up in 2020, there were 1.3% fewer total sales in 2020, with roughly 107,000. But that takes into account a slow spring due to the start of the pandemic.
Total sales through March 2021 are up 4.5% compared to the first three months of 2020.
Here’s a look at some of the Michigan real estate trends in 2020 and 2021.
- Emmet Association of Realtors (Petoskey area): $461,931
- Grosse Point Board of Realtors: $390,488
- Ann Arbor Area Board of Realtors: $374,991
- Traverse Area Association of Realtors: $356,851
- Antrim Charlevoix Kalkaska Association of Realtors: $347,315
- Detroit Board of Realtors: $89,115
- Clare-Gladwin Board of Realtors: $109,346
- Bay County Realtor Association (Bay City area): $123,258
- Northeastern Michigan Association of Realtors (Hale area): $140,203
- Eastern U.P. Board of Realtors (Sault Ste. Marie area): $143,543
- West Central Association of Realtors (Big Rapids area): Up 64%
- Emmet Association of Realtors (Petoskey area): Up 35%
- Detroit Board of Realtors: Up 29%
- Water Wonderland Board of Realtors (Gaylord area): Up 27%
- Paul Bunyan Board of Realtors (Cadillac area): Up 26%
- Montcalm County Association of Realtors: Down 32%
- Genesee County (Flint area): Down 1%
- Ann Arbor Area Board of Realtors: Up 4%
- Monroe Down River Association of Realtors: Up 7%
- Greater Wayne County (Southfield area): Up 7%
- Upper Peninsula Association of Realtors (Marquette area): Up 26% (2,226 sales in 2019, 2,802 in 2020)
- Hillsdale County Board of Realtors: Up 20% (401 sales in 2019, 483 in 2020)
- Paul Bunyan Board of Realtors (Cadillac area): Up 20% (321 sales in 2019, 386 in 2020)
- Branch County Association of Realtors (Coldwater area): Up 17% (380 sales in 2019, 443 in 2020)
- Sanilac County: Up 12% (318 sales in 2019, 356 in 2020)
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