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Housing Market Update: New Construction and the Overall Market

PORTAGE, Mich, November 1, 2019- Beginning in 2018 and continuing through September 2019, the housing market has continued to face an inventory strain and rising prices. Overall, home sales and new housing starts (permits) were down in 2018 locally. Despite a strong economy, housing continues to face a new challenge with affordability concerns keeping buyers on the sidelines and slowing the rate of home sales. That trend has continued through 2019, as existing homes sales (both new and used) are down year over year and prices continue to increase.

Allen Edwin Homes has gathered and monitored new and existing homes sales and prices to identify trends and market conditions throughout the following markets and local Realtor associations: Grand Rapids, Kalamazoo, Lansing, Livingston County, Genesee County, Jackson County, Southwestern Michigan and West Michigan Lakeshore. Below is a breakdown of overall home sales for each of the local Realtor associations and the corresponding new home starts (permits) for these areas:

Overall, existing home sales are generally flat to down year over year in Grand Rapids, Kalamazoo, Lansing, Southwestern Michigan and West Michigan Lakeshore Associations of Realtors. According to the National Association of Realtors, national average existing home sales dropped 2.2% in September, as compared to the overall Michigan markets down 1.93%. The average sales prices in Michigan were overall up 6.36%. With sales slowing and prices increasing, it moved first-time buyers out of affordable options. “In reaction to this, housing sales may show flat to negative year over year, as the higher average sales prices excludes affordability for first-time buyers,” said Mike McGivney, Vice President of Sales and Marketing at Allen Edwin Homes. “We are experiencing the tale of two very different housing markets simultaneously. The first is homes priced between $180,000 and $300,000 have an average months’ supply of 2 to 3 ½ months. For homes over $300,000, the amount of inventory quickly grows from 3 ½ months to over 8 months of supply. The inventory of affordable homes for first time buyers is severely lacking and creating a constraint on new home sales and overall sales growth.”

Using information and data from local Realtor associations, new housing data from housing starts (permits) and market depth by price points, Allen Edwin Homes has used this to help formulate a solution for the first-time buyer and the constrained housing markets. In November of 2018, Allen Edwin Homes launched the Integrity Collection to gives first time and move up buyer’s options to own a new home with monthly payments comparable, or in some cases, lower than the cost to rent. The new collection of homes range from 2-4 Bedrooms, 1-2.5 Bathrooms, and 1,252-2,276 square feet with monthly payments starting from just over $1,000 per month. This collection includes features such as Energy Smart Certified Homes by RESNET, including 95% high efficiency furnaces and air conditioning by Carrier, Aristrokraft birch cabinets and much more. Allen Edwin Homes is up 46% in home sales since 2018 due to the change and focus being put back on the first-time buyer and affordability.

For more information on Allen Edwin Homes, please visit www.allenedwin.com

About Allen Edwin Homes:
Allen Edwin Homes, one of Michigan’s largest home builders, was established in 1994 in Portage, Michigan and builds in over 100 great communities across Southeast MI, Kalamazoo, Grand Rapids, Lansing, the West Michigan Lakeshore and Indiana. Priced from the mid $100,000s to $500,000s, all Allen Edwin Homes are RESNET® Certified Energy Smart Homes and include a 10 Year Structural Warranty backed by the RWC®. For more information about any of Allen Edwin Home’s new communities, please call 800-313-9211 or visit www.allenedwin.com

Mike McGivney
VP of Sales & Marketing
Allen Edwin Homes