Michigan home values among lowest in U.S. What do they sell for in your ZIP?
- Michigan now ranks 48th in median home sales price, down from 45th.
- Fewer homes are on the market but overall prices have risen in much of the state.
- Median listing prices range from over $1 million in parts of Oakland County and northern Michigan to less than $70,000 in parts of Detroit, Flint and Saginaw.
Michigan housing values are falling behind the rest of the nation, as the median listing price now ranks 48th among states, down from 45th a year ago.
The state’s median listing of $267,000 is higher only than the medians in Ohio and West Virginia, according to March data compiled by Realtor.com.
Stagnant population is largely to blame for a widening gap in values: In July 2016, the median home listing price in Michigan was $165,000, nearly $100,000 below the national median. In March, the national median was $424,000, $157,400 higher than that of Michigan.
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Median listing prices did increase 10 percent over the past year in Michigan, but other states saw prices rise even more.
Michigan’s population has hovered around 10 million for more than 20 years, prompting alarm among policymakers. In the past two years, Michigan has again lost about 43,000 residents, according to Census estimates.
Research by Freddie Mac and others, has shown the link between growth and prices. Indeed, a Bridge Michigan analysis of state-level population and housing prices reveals the same: states with less growth or outright decline have, on average, slower-growing home prices.
Values across Michigan vary wildly, from less than $100,000 in much of Detroit, Flint and Saginaw to over $1 million in affluent parts of Oakland County and along the Lake Michigan shoreline.
In eight Michigan counties, Realtor.com reports the median sales price is between $400,000 and $475,000 — and it’s over a half-million dollars in Emmet and Leelanau counties, northwest and northeast of Traverse City.
The disparities occur within Detroit as well, where high-end condos downtown pushed the median asking price there to nearly $500,000 in March.
Yet just 1 mile northwest, along Michigan Avenue, the median price was $50,000, one of the lowest in the state.
Glass half full? Michigan is ‘affordable’
Some say Michigan’s lower housing costs can be a selling point to attract employers.
“I think housing affordability in Michigan is a major highlight,” said Tyler Theile, vice president, chief operating officer and director of public policy and economic analysis for the Anderson Economic Group, a Lansing-based research and consulting firm.
That’s created an opportunity for the state with Its lower median price acting as a potential selling point to people fed up with high housing costs elsewhere, Theile and others said.
In fact, experts say more people are moving toward affordable housing as more people are able to work from home.
“People are clearly moving for affordability,” said Len Kiefer, deputy chief economist of mortgage-lending giant Freddie Mac.
Glass half empty? Not many homes for sale
But the problem, real estate experts say, is that there aren’t enough homes in Michigan to satisfy demand from locals or from those hoping to relocate to the state.
“Certainly it’s a two-sided coin,” Theile said.
Nationwide, there are half the homes available now than there were in 2019, according to Realtor.com. In Michigan, the gap is worse: an average of 36,000 were on the market each month in 2019. In the first three months of 2023, the average has been 14,000 this year.
“There is no inventory,” said Sandi Smith, president, broker and co-owner of Trillium Real Estate in Ann Arbor and president-elect of the Michigan Realtors, an industry group.
Rising interest rates have kept some people in their homes and out of the market, Smith and others said. Yet enough buyers are still looking, keeping home prices on the rise.
In Washtenaw County, where housing inventory is roughly half of what it was just three years ago, demand remains high, as are prices: the median listing prices ranged from $557,000 to $772,500 in the four Ann Arbor ZIP codes.
“Locally, in Ann Arbor, it is still pretty bonkers,” said Smith. While sellers might see 20 offers a few years ago, they’re still seeing 10 — and typically over the asking price.
The dearth of affordable housing has prompted lawmakers to approve millions of dollars to help increase the stock of affordable housing, calling the situation a crisis.
Theile said more can be done to encourage developers to build more affordable housing — homes that would cost about $15,000 a year in mortgage payments, an amount that would let someone borrow just under $200,000 at today’s interest rates.
That could require help lowering mortgage costs but also changing zoning laws to make it easier for builders to build more homes at lower costs. That could include allowing more lots per acre, she said.
Yet a recent study by Princeton University researchers, which looked at zoning laws across the nation, concluded that zoning rules in metro Detroit are the 8th most restrictive in the nation.
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