MUSKEGON, Mich. — Feeling the squeeze...
The US housing market was one of the first to feel the pinch of rising prices, with inventory shortages leading to high-dollar price tags and bidding wars.
While the situation in West Michigan had begun to calm down as the frenzy faded, the house hunt may yet prove tricky to navigate in the present environment of rising rates and high inflation.
The Muskegon housing market, at one point, numbered among the most overvalued in the country earlier this year following a significant surge in prices.
While in recent weeks the once red-hot local housing market seemed to have begun to cool, it remained deeply competitive.
“There’s hardly any inventory. This is probably the only probably one of maybe two five other houses for sale in Muskegon right now,” Realtor David Medendorp explained in the midst of showing a historic south-side home. “That's what makes us unique is that we have five bedrooms and we have two full baths.”
A historic example on Jefferson Street toured by 13 ON YOUR SIDE last week had been recently renovated by the owner.
At the time of publication, the five-bedroom, two-bathroom home was listed for $185-thousand.
Yet, while the number of listed homes remained low, in many locales, according to the Muskegon-area realtor, more for-sale signs had cropped up than there once were.
Those homes were also taking longer to sell.
“You can look at a couple of houses before you decide,” Medendorp, who heads the Medendorp Group noted. “So that's a really great thing.”
A reason why, despite the higher cost of financing a home thanks to rising rates, the price points themselves appeared to be in the process of leveling off, albeit gradually.
“Prices aren't really down that much, but they're not escalating,” he explained. “If I listed this house for $200,000 in May, it might have sold for $215,000. Now, it's listed at $185,000 and it might sell for $185,000, it might sell for $185,000 with a little bit of a concession.”
Medendorp shared several pieces of advice that could further sweeten the deal and mean a competitive offer:
Request seller concessions
Asking the seller to cover closing costs might have been a deal-breaker in the fast-paced, no-holds-barred market of last year. Today, it’s a strategy buyers should reconsider.
“Closing costs can be from $500 to 6 percent of the loan cost,” Medendorp said. “With VA, it can be all the closing costs.”
Special programs in place may also cover a portion of that cost.
“There's a program available in basically census areas where people aren't making a ton of money--they still might make $50-$60-thousand a year--where the major banks will pay all your closing costs,” he related.
Get a professional inspection
“One of the greatest short-term investments that pay off in the long-term is paying to get a professional inspection done,” Realtor Seth Keller noted. “Usually that's a great negotiating tool.”
Select the right lender
Financing can set an offer apart, making it more competitive.
“If you have a lender that everyone trusts, then your offer’s more likely to be accepted and they'll look at it as closer to cash,” Medendorp said. “You just need to talk to your agent about who is a strong lender in the marketplace.”
A strategy realtors say also puts the buyer on the best footing financially.
Between the inflation picture, the sticker shock out there, and the interest rates, the numbers can get a little complicated.
Yet, in today’s market with any successful house hunt, Keller advised buyers to consider the following:
“If you get into a home--they say date the rate, marry the home,” he explained. “If you find a home that you can afford, and you find a home that you love, it's going to be worth it to purchase it because interest rates will not be at this rate forever. Refinancing is always an option.”
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