While CNNMoney/Fortune Magazine recently published their list of top real estate markets for 2007 in terms of expected home price increase, they also point out some relevant facts about the Midwestern housing market. If you check out that last link, you will see that for Michigan, the magazine highlights two Michigan metropolitan areas, Grand Rapids (expected 2008 increase of 2.6%) and the Troy-Farmington Hills area (.6% increase expected).
So why point out a flashy article online that only highlights that the state of Michigan's housing market is slower than seemingly everywhere else in the country?
As I have pointed out in the past (and here), Michigan is ahead of the curve in the housing market compared to the rest of the nation. Considering that we are ahead of the housing market curve, and currently experiencing a one state recession, it is highly encouraging to see projected gains, however modest, in the housing market. When Samuel Zell talks about investors beginning to sniff around the edges of Michigan's housing market, it is a great time to look at making that move or investment in real estate.
As with any other commodity, investors begin to flood the market when they believe the market is at it's bottom. If you think that you need to move in the next couple of years, consider moving your timeline up a little bit to take advantage of the current market. You may not get as much for your current domicile, but you will likely make up that difference on your purchase.
[Cross posted at SE Michigan Real Estate]
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Todd - How do you see the net decrease in population playing into that equation? Supply, demand and the continuing decline in the auto industry don't appear to bode well for Michigan.
Suzanne - Two things overlooked with the auto layoffs are 1) the buyouts and 2) retraining. Personally and anecdotally, we are seeing auto workers running around looking for something to invest in with their buyout checks. Of the folks that are possibly too young to retire, they are being offered a smaller buyout check but being given money to go back to school and retrain.
To answer your question head on about the net decrease in population, yeah, it doesn't bode well. Michigan's economy is undergoing a shift; from manufacturing to the service sector. Michigan is in its current predicament precisely because we've been too reliant on manufacturing. Ann Arbor (or Paradise, as I call it) recently landed Google as a firm to come to town. 1000 jobs alone at Google and an estimated 1200 new jobs created to support the employees of Google. Toyota has a new engineering plant coming in to SE Michigan, and there are substantiated rumors of some distribution centers coming in around Metro Airport (Romulus) and Down River.
The good news, I believe, is that any economy is not a static thing. It is dynamic and changing to market conditions. The net decrease in population you speak of happened this last year....conicidentally, the fourth best real estate market this area has seen.