Maybe you've been thinking about being a homeowner for some time, but you have convinced yourself that you can't afford it. There's a prevalent misconception about housing that leaves many wrongly believing that renting, especially in a market with increasing property values, is cheaper than buying a home.
In the West Michigan real estate market and Grand Rapids real estate market, little could be farther from the truth. According to an article published today by the Grand Rapids Business Journal, many renters in the area are beginning to feel the squeeze of increasing prices and decreasing availability of units. Currently, 98% of all available rental dwelling units that are not income restricted are under lease. That means that those renting have a hard time finding a place in general, and an even harder time finding a rental with a monthly rent that can be paid on the stagnant average wages paid in the region.
Wage or income restricted housing generally puts a cap of $20,000 on their units, while mainstream rentals require that renters make at least 3-4 times the rent each month. This leaves a massive portion of the renting population, whose income falls between $20,000 and $48,000, out in the cold when it comes to finding affordable, quality housing.
The national average rent for a recently built apartment unit is $1,290, which is close to the estimated rents being projected for numerous new downtown developments. Downtown housing in a renovated or newly built apartment building is going to run the average renter at least $1,000 per month. Much of this price increase has to do with the need for profit; the companies building and renovating these facilities want to make a substantial return on their investment. Instead of curbing costs or looking for long-term financial gain over five or ten years, these businesses are pushing for short term gains, leading to rapidly increasing rental prices which may go up by as much as another 6% this year.
While state and federal subsidies can help builders and developers offer lower-priced rental units, these usually only accept people whose income is less than $20,000 a year. The amount of the average one bedroom rental in the area is $900 per month, which could be the equivalent of a mortgage payment on a very nice home. If you've been thinking of buying and stashing a little bit of money aside for a down payment, 2016 may be the year to finally upgrade to home ownership.
Call the team at Pyxis Realty today to discover how affordable and simple home ownership can be. Regardless of the price range of the home you're searching for, our professional, dedicated team will always offer white glove service and attention to detail! We'll take care of the most stressful parts of the home search and purchase process, allowing you to focus on your work and family during the transition. After a few more years of ongoing rental price inflation, you may find that that $900 has bought a home you could no longer afford to rent!