Michigan Housing Market 2023 Report
What’s the Michigan Housing Market Like?
Home prices in Michigan have appreciated 18.0% lower than the national level from last year. Looking back three years at the median price in October 2019 compared to October 2022, prices have increased 25.8% in Michigan VS 35.8% nationwide.
As of October 2022, the median price for a home in the state was $233,300, which is up 4.1% above last year’s median price. Comparing prices over the last three years, we can see they have decreased -9.3% from the peak of $257,200 in Jun-2022.
Sales volume has also decreased recently. In October 2022, 9,939 homes were sold in the state of Michigan, a decrease of -18.7% from the previous month.
Comparing year-over-year, we saw a decrease of -24.9% in sales from October 2021, when there were 13,233 home sales.
The number of sales peaked at 15,346 sales in Jul-2020; compared to October 2022’s numbers, we are down -35.2% in the number of homes sold from the height of sales activity of the last three years.
It is clear that the recent steep rise in mortgage rates has curved sales activity and shrunk affordability, and the result has been a drop in home prices in Michigan.
How Does The Michigan Housing Market Compare to the National Housing Market?
The Michigan housing market is similar to other markets because supply and demand drive housing prices. Mortgage rates also similarly impact Michigan as the rest of the nation.
Michigan’s home prices and sales numbers have begun to slow down along with the rest of the country. Differences in the regional economy of some of Michigan’s metro areas make those markets more vulnerable and others more resilient to the current economics.
The current median price of homes in Michigan is $233,300 compared to the national median sales price of $397,549. Over the past three years, the median price of homes in Michigan has increased by 25.8% compared to the national average of 35.7%
Michigan Metro Areas With The Hottest Housing Markets
The state of Michigan has seen below-average housing demand in recent years. Consequently, prices have increased below the national average. Some areas within the state have outperformed others, though. We will look at the cities with the highest increase in the median price year over year.
The top markets with the highest appreciation rate:
- Spring Lake
- Swartz Creek
Birmingham is the largest city in the state of Michigan with a population of more than 21000 people. The city is the cultural and economic center of the state and is home to several major corporations and businesses. Birmingham is a city with a rich history and a diverse population. The city is also home to several colleges and universities.
Birmingham’s home prices have been doing quite well over the last few years; in fact, Birmingham topped the list of cities in Michigan with the largest increase in prices in 2022 with an increase of 112.1% from the prior year. For 2022, October’s median price was $742,500.
In October of 2022, there were 28 homes sold in Birmingham, down 11.5% from the same period in 2021.
The median days on the market in October 2022 was 29, which indicates a seller’s market by today’s standards. Compared to October 2021, the median days on the market is up 11.5% compared to October 2022.
Pontiac is a city located in the U.S. state of Michigan. As of the 2010 census, the city had a total population of 60,000. It is the county seat of Oakland County. Pontiac is located approximately 30 miles (48 km) north of the city of Detroit.
The Pontiac Real Estate market is currently a very competitive market. In October 2022, there were 57 homes sold with a median price of $125,000. The median home price in Pontiac has increased 28.2% from October of 2021, while the number of homes sold was 57, an 18.8% increase compared to the same month the year before.
The median days on the market in October 2022 was 20, and it’s up 5.3% compared to Sept 2021.
Spring Lake is a beautiful place with a population of about 2,529 people. It is located in the state of Michigan and is a popular tourist destination. The lake is about 3 miles long and 1 mile wide and is very clean and clear.
There are many different types of fish that can be found in the lake, including bass, trout, and pike. Many different types of birds can be seen in the area, including herons, ducks, and geese. Spring Lake is a great place to go for a swim, go fishing, or just enjoy the scenery.
Spring Lake is considered a very competitive market right now. In October 2022, 20 homes were sold with a median price of $125,000. The median price in Spring Lake was up 28.2% over October of 2021, while the number of homes sold was down -25.9% compared to the same period in 2021.
The median number of days on the market for October 2022 was 20 days which is up 122.2% from October 2021.
Swartz Creek is a city in Michigan with over 15,000 people. The city is home to several popular attractions, including the Swartz Creek Golf Course, the Swartz Creek Community Center, and the Swartz Creek Arboretum.
The city is also home to several businesses and restaurants, including several popular fast-food chains. Swartz Creek is a bedroom community of Flint, with many of its residents working in the city. The Swartz Creek Community Schools serve the city. The city has a park system with several parks, including one on the Flint River.
The city is home to the Swartz Creek Golf Course and the Swartz Creek Performing Arts Center. The city's festival, the Swartz Creek Summerfest, is held each year in July and is one of the most popular festivals in the city.
The real estate market in Swartz Creek is considered very competitive. There were 24 homes sold in Oct 2022, with a median price of $242,500.The median price in Swartz Creek had an increase of 25.0% from Oct 2021, while the number of homes sold was down -31.4% compared to the same period last year.
The median number of days on the market for Oct 2022 was 20 days which is up 185.7% compared to the same month in 2021,
Charlotte is a small city located in Michigan. The city has a population of approximately 8,600 people, according to the 2019 U.S. Census. Charlotte is a relatively small city, but it is known for its strong sense of community. The city hosts various events throughout the year, including the annual Charlotte Frontier Days Festival, which takes place in June and features a parade, carnival rides, and live entertainment.
The area is also home to several parks, including Charlotte County Park, which offers camping, hiking, and fishing. Other popular attractions in the area include the Charlotte Motor Speedway and the Potter Park Zoo. Charlotte is also close to the larger city of Lansing, which offers a variety of shopping, dining, and entertainment options. Additionally, nearby South Carolina is also home to several attractions, including the annual South Carolina Peach Festival, which takes place in July.
Charlotte is currently a somewhat competitive market. In Oct 2022, 23 homes were sold with a median price of $194,000. The median price in Charlotte saw an increase of 24.8% over Oct 2021, while the number of sales was down -14.8% compared to the same month in 2021.
The median number of days on the market for Oct 2022 was 48, which is an increase of 24.8% compared to the same month last year.
Higher Mortgage Rates Could Slow Price Growth in Michigan
How will interest rates affect the Michigan housing market? We are already experiencing the impact of rising interest rates across the nation. Price growth in Michigan has been flattening or on a slight decline for several months in 2022. However, Michigan is such a high-demand destination that it may very well fare better than many other areas of the country.
As of mid-October 2022, the 30-year fixed rate mortgage is above 7% on average. That represents a 133% increase in mortgage rates in less than nine months. The Feds are on a “no holds barred” approach to curve inflation, and interest rate hikes have become the norm over the last several Fed meetings. Unfortunately, it seems that rate hikes are not done. We anticipate at least another rate increase before the year ends.
Key Market Stats for the Michigan Housing Market:
As of the latest compiled housing report for October 2022.
|Current Value||Last Year||Change YOY|
|Median Sales Price||$233,300||$224,100||up by 4.1%|
|Number of sales||9,939||13,233||down by -24.9%|
|Median Days On The Market||26||21||up by -9.3%|
|Number of homes available||33,115||33,996||down by -2.6%|
|Months supply of inventory||2||1||up by 100.0%|
|% of homes sold above list||31.5%||42.4%||down by -25.7%|
|% of home with price drops||35.9%||27.0%||Up by 33.0%|
|New Listings||10,665||12,656||down by -15.7%|
Michigan Historic price changes & affordability
The Michigan housing market has seen explosive appreciation for years. The last 3 years have been particularly favorable to homeowners as they saw their homes appreciate by 25.8% in 36 months.
The steep rise in home prices and mortgage rates has shrunk affordability to record lows in the state. A 25.8% spike in home prices and a sharp increase in mortgage rates in the last 12 months do not spell good news for the Michigan Real Estate market.
We know that the average person’s wages do not increase by 25.8% in three years, so we can see why affordability is a problem. The gap between rising home prices and wages keeps getting wider.
- The housing market is shifting, and Michigan housing market predictions for the short term seem to point to a declining market along with many areas of the US. Due to Michigan’s moderate price growth, it is unlikely that the state will see a drastic drop in home values.
- The next 18 to 24 months will be an adjustment, especially for home sellers and Real Estate professionals. Adjusting to a normalized market that is not heavily skewed in favor of sellers will take time.
- Real Estate markets are highly local and even within the same state, there will be areas projected to be hit hard by the market shift and others will fare better.
- Timing the market for buying or selling is a big gamble. If it makes sense for you to buy, go ahead and buy a home. For sellers, if you have to sell in the next 12-24 months, you may want to consider doing it sooner than later, especially if you are in an area that may be considered overvalued and has a high potential for house prices to drop.