Michigan's Fastest-Growing Real Estate Markets in 2023 (2024)

FAQs

What is the real estate investing outlook for 2023? ›

A Challenging Year Ahead. High interest rates and a recession will make 2023 a challenging year for commercial real estate. Though inflation eased in late 2022, it was still running at more than 7%.

In 2023, the national annual median price for homes for sale is projected to rise by another 5.4%, which is less than half the pace seen in 2022. Even if a homeowner decides to sell their home, they will likely have a lot of equity in it.

Despite what some may think, 2023 is still a good year to invest in real estate, thanks to advantages like long-term appreciation, steady rental income, and the opportunity to hedge against inflation. Mortgage rates are expected to decline, but the housing market is likely to remain competitive due to low supply.

So, which Michigan town is the fastest-growing in the entire state? Hamtramck. According to GOBankingRates.com, the change in population in just one year is 26.93%. That's massive.

In 2022, house flippers generated an average gross profit of over $70,000 per property, according to ATTOM Data Solutions. In 2023, house flipping will remain a profitable real estate investing strategy and some of the best cities to flip houses could suprise you.

The effect is overall positive for investors who already own assets in real estate or have a real estate IRA. As inflation rises, the cost of existing debt decreases. Think about it this way — you invest in a real estate property prior to a period of inflation with a 30-year, fixed-rate mortgage locked in at 3%.

In some categories there will be deflation, or an outright drop in price levels. In the charts below, these trends show up as a declining rate of year-over-year inflation toward the end of 2022. By the end of 2023, many and perhaps all of those charts will show negative year-over-year inflation, or deflation.

These organizations predict that mortgage rates will decline through the first quarter of 2024. Fannie Mae, Mortgage Bankers Association and National Association of Realtors expect mortgage rates to drop through the first quarter of 2024, by half a percentage point to about nine-tenths of a percentage point.

Real estate can be an asset class with high returns. It also usually offers a hedge against inflation. Since real estate has historically been inversely correlated with conventional assets, it can be a good way to diversify your investments away from the stock market.

What is the fastest shrinking city in Michigan? ›

Detroit has been one of the most salient examples of a shrinking city over the last 60 years.

Basically, the rule says real estate investors should pay no more than 70% of a property's after-repair value (ARV) minus the cost of the repairs necessary to renovate the home. The ARV of a property is the amount a home could sell for after flippers renovate it.

Utah and Missouri establish themselves as the best places to flip houses in terms of low remodeling costs. New Jersey, meanwhile, has the lowest rental vacancy rate. West Virginia boasts the highest homeownership rate in the US and the lowest housing costs.

How much profit should you make on a flip? On average, a rehabber shoots for a 10 to 20% profit of the After Repair Value, but it varies depending on the market and the specific project risks. A 10% profit would be on the lower end, and a 20% profit would be considered a 'home-run' by most rehabber's standards.

4. Avoid Long-Term Fixed-Income Investments. The worst investment to put money into, during periods of inflation, are long-term, fixed-rate interest-bearing investments. These can include any interest-bearing debt securities that pay fixed rates, but especially those with maturities of 10 years or longer.

Wise investments for an inflationary economy

But speaking generally, the following real estate investments fare better than others in a high inflationary economy: Rental property, including residential, commercial, multi-unit, and single-family homes will likely have higher than normal demand and returns.

"In the first half of 2023, the S&P 500 is expected to re-test the lows of 2022, but a pivot from the Federal Reserve could drive an asset recovery later in the year, pushing the S&P 500 to 4,200 by year-end," the investment bank said in a research note.

Prices are currently coming down in some markets, and the national median price was ever-so-slightly lower in February 2023 than it was in 2022, but experts do not expect dramatic drops.

How high will mortgage interest rates go in 2023? ›

Mortgage Bankers Association (MBA).

“Long-term rates have already peaked. We expect that 30-year mortgage rates will end 2023 at 5.2%.”

So far in 2023, the Fed raised rates 0.25 percentage points twice. If they hike rates at the May meeting, it is likely to be another 0.25% jump, meaning interest rates will have increased by 0.75% in 2023, up to 5.25%.

2% Rule. The 2% rule is the same as the 1% rule – it just uses a different number. The 2% rule states that the monthly rent for an investment property should be equal to or no less than 2% of the purchase price. Here's an example of the 2% rule for a home with the purchase price of $150,000: $150,000 x 0.02 = $3,000.

In theory, buying a house after retirement gets you more for your money than renting. However, homeownership also entails substantial financial risks. Issues such as fluctuations in market value, unexpected maintenance expenses, and insurance deductibles can increase costs over and above those of renting.

In reality, your 20s and 30s are an ideal time to begin investing in real estate. Passively investing in real estate is especially attractive to those who are just learning about the real estate industry. Or for those who simply don't have the time, interest, or resources to invest in property directly.

OTTAWA COUNTY, MI – Ottawa County remains Michigan's fastest-growing county among the state's 10 most populous. According to the latest U.S. Census Bureau estimates, the West Michigan county in 2022 broke the 300,000 population mark and saw a 1.57% population increase between 2020 and 2022.

Major sectors by employment in Michigan include Healthcare and Social Assistance, Retail Trade and Professional, Scientific and Technical Services, which employed 696,513, 561,125 and 481,098 people in 2022, respectively.

The UP—especially its uppermost tip, the Keweenaw Peninsula—is necessarily remote. It's not super easy to get there, and it's mostly wilderness—the largest city, Marquette, has a population of just under 21,000.

What is the most isolated town in Michigan? ›

Livingston County is richest in Michigan (or is it?)

It's not difficult to understand why. If you drew a 40-mile circle from Livingston County's center, you'd find the Detroit, Ann Arbor,…

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Oakland County registered the most millionaires in both 2010 (1,678) and 2014 (2,479) and, when adjusting for population, also has the most millionaires per 10,000 residents at 20.

The median price of a single-family home in Salt Lake County fell to $560,000 in February, down $90,000 from its peak in May 2022 when the median home sold for $650,000. That's an almost 14% price decrease. Year over year, the median price of a Salt Lake County single-family home declined nearly 4.3% in February.

Real estate is a great asset to own when the economy is in freefall. A rental property typically acts as a natural hedge in a volatile market. Primarily because many people that sell their homes or properties during an economic downturn or recession need to sell their property.

The benefits of investing in real estate are numerous. With well-chosen assets, investors can enjoy predictable cash flow, excellent returns, tax advantages, and diversification—and it's possible to leverage real estate to build wealth.

Why Are Home Prices So High in Utah? Utah boasts the nation's strongest pace of job growth, along with rock-bottom unemployment, ultra-low mortgage rates, few mortgage delinquencies, and low state and local taxes.

Salt Lake City is estimated to be overvalued by over 28%. St. George, in Utah's southernmost corner, is estimated to be overvalued by over 27%. The Provo-Orem metro area is estimated to be the least overvalued, at over 17%.

The lack of varied housing types has hindered the progress to fill the 45,500 unit shortage, according to the Utah Foundation. In order to close the gap, more adaptable housing, such as townhomes, duplexes and mother-in-law suites, need to be a larger percentage of Utah's housing stock.

Is it better to have cash or property in a recession? ›

In addition, during recessions, people with access to cash are in a better position to take advantage of investment opportunities that can significantly improve their finances long-term.

For investors, “cash is king during a recession” sums up the advantages of keeping liquid assets on hand when the economy turns south. From weathering rough markets to going all-in on discounted investments, investors can leverage cash to improve their financial positions.

If you can afford it, buying a property during a recession can be an excellent decision. Homes typically stay on the market longer during a recession since there are typically fewer purchasers. Making their home less challenging to sell increases sellers' likelihood of reducing their listed housing prices.

Real estate investments tend to have high transactional costs, especially in legal and brokerage fees. The process of acquiring a new property is also very long and tedious with lots of legal formalities. Another disadvantage of property investments is that they are not easy to liquidate.

Real estate has proven itself a worthy investment that provides cash flow and appreciation over time. Whether you're an aggressive or conservative investor, it's a great way to diversify your portfolio and can pay off in the short-term and long-term.

While stocks are a well-known investment option, not everyone knows that buying real estate is also considered an investment. Under the right circ*mstances, real estate can be an alternative to stocks, offering lower risk, yielding better returns, and providing greater diversification.

The 70% rule can help flippers when they're scouring real estate listings for potential investment opportunities. Basically, the rule says real estate investors should pay no more than 70% of a property's after-repair value (ARV) minus the cost of the repairs necessary to renovate the home.