Archive for month: April, 2021
Meijer Eyes Abandoned Kmart Store
Meijer is eyeing the site of an abandoned Kmart store in Orion Township. Located at 1025 S. Lapeer Rd. in the Lake Orion Plaza, the old Big K store would be demolished and replaced with a 90,000 square-foot Meijer store. The new Meijer store will not be a full-size supercenter, but it will carry more than just groceries. Although Meijer says it’s too early to release details like project start and completion dates, the owner of the shopping center believes that the company is aiming for a late 2022 opening.
Fairlane Town Center Value Takes a Nosedive
Once valued at $101 million in 2014, the Dearborn mall is currently valued at $42.75 million. That’s a 57.7% decrease in value. The Florida-based Starwood Capital Partners purchased the property in 2014 as part of a $1.4 billion deal that included The Mall at Partridge Creek in Clinton Township and five other malls. Fairlane Town Center has been in receivership since May and faces liquidation.
West Michigan Real Estate Market Boom Predicted to Continue
After an unprecedented flurry of winter homebuying, the 2021 spring market feels a bit different. Instead of the new-homebuying-season feeling, it feels more like a continuation of the winter rush. That rush is predicted to continue due to three reasons: First, the supply/demand equilibrium is defined as about four to six months of inventory. Inventory has been below four months for six years and is currently at five months in many West Michigan markets. Second, attraction to the West Michigan region continues to grow. And finally, it appears that consumer interest rates will stay low.
Michigan Realtors Shocked & Awed By Housing Market
Michigan realtors are stunned by the dog-eat-dog housing market. The low home inventory and historically low mortgage interest rates have created the perfect storm. Michigan’s supply of housing inventory is down 61%, and the median sale price is up 13.5% from a year ago. Some realtors say a home’s listing price has become something akin to a reserve price at an auction. Buyers are bidding far above the asking price and offering cash on the table. At the least, buyers need to come to the table with substantial cash down payments.
Michigan Real Estate News Headlines – April 26, 2021
National
The Good News About the Insane Real Estate Market
Developers Flock to Cold Storage as Americans Stock Their Freezers
GM reveals plans for employees, offices post-COVID-19
If You Care About Social Justice You Have to Care About Zoning
Detroit
GM reveals plans for employees, offices post-COVID-19
Grand Rapids
Will the 2021 spring market continue to advance?
Southeast Michigan
Meijer wants abandoned Kmart site in Orion Township
Unprecedented housing market leaves Realtors stunned: ‘Never seen anything like this’
Michigan Realtor: Selling Your Home in One Day Will Cost You
Fairlane Town Center value plunges by more than 50 percent
GM reveals plans for employees, offices post-COVID-19
Plymouth Elks Lodge property sold
Western Michigan
Unprecedented housing market leaves Realtors stunned: ‘Never seen anything like this’
Commercial real estate market showing signs of recovery in West Michigan
Northern Michigan
Unprecedented housing market leaves Realtors stunned: ‘Never seen anything like this’
Outstate
Unprecedented housing market leaves Realtors stunned: ‘Never seen anything like this’
Weekly Brief – April 19, 2021
The mainstream press is catching on to the inventory issue in the residential real estate market in a big way. In some respects, this has become a self-fulfilling prophecy.
At the beginning of the pandemic, the lack of inventory was attributed to sellers’ reluctance to list homes because they (depending on the source) were concerned about potential buyers entering their homes, or they were concerned they would not receive satisfactory offers, due to the economic conditions.
Since we have reached a “new normal” during the pandemic, the explanations for the lack of inventory shifted. Now, sellers are worried that they will not be able to identify and afford a replacement home. Sellers themselves are concerned about the limited inventory. Put more simply, we now have limited inventory because we have limited inventory.
So, how do we get out of this feedback loop? Well, the latest stories seem to indicate that new construction may not be our savior. Prices of construction are increasing dramatically because of supply chain issues (see, pandemic, among other causes). Lumber prices, in particular, are increasing quickly.
It seems the way out of this constrained inventory may require some creative work by real estate agents (and/or lawyers). Negotiating post-closing possession may give sellers the comfort they need that they will have the time to locate and purchase a replacement property. Given that this is a strongly seller-favorable market, it would appear sellers have the leverage to negotiate possession if that is what it takes to make a seller comfortable to enter into a purchase agreement.
The other option is that eventually, the market may just revert to equilibrium, as markets often do. Hopefully, this summer selling season will answer many questions about where the market is headed.
Metro Detroit’s Real Estate Market Surges Until Fall
Metro Detroit’s current real estate market surge will most likely continue into the fall. Homes continue to sell within a few days, frustrating potential buyers who can’t even schedule a showing. Farmington Hills-based Realcomp recorded the highest median sale price for the month of March in 18 years at $210,000. In the past, buyers desired turn-key ready properties, but in the current market, they’re considering homes that need work or could even be demolished and rebuilt because of low inventory. This trend is being seen nationally, too.
Downtown Lansing Struggles With Fewer Customers
All Michigan downtowns have been hit by the pandemic. With decreased foot traffic and former customers continuing to work from home, business is slow. But downtown Lansing has been hit especially hard as its businesses rely on the State of Michigan office hub. Struggling businesses have lost up to 90% of their sales while waiting for state employees to return to work. Unfortunately, even once the pandemic fades, far fewer state employees will return to work on a daily basis.
Supply Chain Drives Up Home Prices
According to home builders, materials cost increases are driving new construction home prices up, as much as 14%. Lumber price spikes have been dramatic due to mills closing the Pacific northwest and the southeast United States, tariffs imposed on Canadian softwood lumber, and increased demand for new housing. Builders are not making additional profit; the increase is entirely due to rising materials costs. That, in turn, has caused the price of an average new single-family home to increase by $24,386.