Even though experts are warning about unsustainable price inflation and investment speculation in the world-wide real estate market, most local experts agree that West Michigan and similar markets are currently immune from the increasingly volatile market trends, according to an article published by the MiBiz, a Michigan business journal.
Big name companies, including investors and real estate developers have been eying the West Michigan real estate market and specifically, the greater Grand Rapids real estate market, and many have begun making substantial investments in the area. For example, The Embassy Group, a New York based company that invests in commercial real estate properties, just purchased the multi-unit building at 5 Lyon Street downtown. The building, with 65 apartment units and ground floor retail rentals, had been owned and maintained by Rockford Property Management. They sold the building for an impressive $12, 475,000, which pales in comparison to what a similar building would cost in other real estate markets right now.
So what's the concern with the world real estate markets? While the inflation rate for the dollar has remained relatively low since the recession that followed the real estate market fiasco of 2008, inflation of prices in many urban areas may be leading these markets back toward “bubble” status. Specifically, many market watchers are concerned about the inflation of prices of commercial units, which is in turn creating higher rent than working-class American families can afford in many cities. Thanks to low interest rates and a plethora of commercial buildings in need of new management, refurbishing, and investment, there has been a flurry of sales on the national commercial market, enough to raise red flags for some.
Thankfully, West Michigan markets do not have any of the major signs of imminent bubble popping; in fact, the local real estate markets appear relatively stable when compared with other major national and global markets. For example, there is little concern of high-risk bank lending in this area, and buildings are not sitting vacant for long periods of time after their sale. Local interest rates are also relatively stable. Combine this with a record low amount of housing available on the Greater Grand Rapids real estate market, and the area becomes a very tempting investment for big businesses. Large apartment complexes and similar commercial properties are being purchased and refurbished by outside investors, keen to take advantage of the relatively conservative market in West Michigan.
The takeaway from all of this discussion of the global market and the comparison of the West Michigan market to other large real estate markets is that this area has relatively strong value to price ratios and will likely not be dramatically impacted if there is any kind of market downturn, as occurred in 2008. Right now is a great time to invest in a home or investment property in the Grand Rapids real estate market, and there's no one better to guide you in the process of purchasing a property than the experienced, professional staff at Pyxis Realty. Call us today if you're thinking of buying, selling, or moving to the area!