Driving down the streets of Cadillac, one can see numerous home-for-sale signs scattered in the lawns. It may be a lone home for sale, or two or three in a row. The same can be said for cities in other local counties.
Seeing all these signs may make one wonder why so many homes are for sale.
According to Rick Lantz at White Tail Realty in Lake City, the local real estate market has a similar number of homes for sale this year as it had last year.
“We always see an influx of properties this time of year on the market,” Lantz said. “It is traditional. Although I haven't seen the numbers yet, the market seems to be similar to last year.”
In general, spring usually brings an increase in the number of homes for sale, according to Barry Fall of ERA Greater North Properties, and this year is no exception.
“This time of the year seems to be a popular time to buy and sell,” Fall said. “However, you can't really contribute it to one individual thing as to why many homes are on the market at this time of the year.”
The majority of Fall's listings are sellers looking to upgrade or downsize, however, there are other reasons for the boom in home sales according to Michigan State University professor of economics Charles Ballard.
“Different areas have distinct reasons for why the housing market is like it is,” Ballard said. “A strong economy is associated with the demand for homes. Because the supply of housing is fixed for the most part, unless if there is a large builders market, employment growth will increase the demand for housing as well as prices.”
Ballard said demand for the housing market also could be tied to interest rates for home mortgages; alternative investments such as investing in the stock market rather than property; if it is a retirement community, more people may have second homes in the area; and age distribution of the population.
“The fastest growth comes from families or couples in their 20s and 30s,” he said. “If an area lacks the age distribution of those tending to form new households, there is going to be less demand.”
Some of the housing market hot spots in the United States, according to Ballard, include larger areas such as Chicago, Washington D.C., San Francisco, Los Angeles and Boston.
“These are places with incredibly heated and overheated real estate markets,” he said. “Unfortunately for most of Michigan, it isn't a hot spot. South central lower Michigan isn't terribly bad, but it is nothing compared to other areas in the country.”
Ballard attributes the overall less than average home market to the Michigan economy lagging behind other states.
“Michigan's economy had spectacular growth in the 1940s through the 1960s but hasn't grown that well in the last 30 years,” Ballard said. “Michigan's fraction of U.S. growth is low. It doesn't help with many of the larger companies having problems.”
Although the state of Michigan has a lagging economy, Cadillac City Manager Pete Stalker pointed out that is not the case for Cadillac
“If you look at the employment base and the amount of hiring in the manufacturer sector, the city is certainly above the state trend. We have a strong local economy here in Cadillac,” Stalker said. “From that perspective, it is allowing folks in the area to buy their own home or upgrade to a different home.”
New construction of homes, condominiums and apartment buildings can put a damper on the residential real estate market. Lantz said although new construction has always been competition, he doesn't see it being any worse than in past years.
“It always takes some potential buyers away, but it doesn't seem to be any worse now than in the last few years,” he said.
Cadillac Area Community Director Jerry Adams said the new housing construction in the city of Cadillac has been fair.
“From the standpoint of condos, there are some being built and some planned,” Adams said. “With apartment developments, it is the same. When we ask potential developers if there is a market, so far they all seem to indicate there is a market. Most do market studies to determine the number of units the area can absorb over a certain period of time.”
Although having numerous homes on the market can be a hassle to many sellers, there is one sector that benefits and that is the buyer.
“Right now it is a great time to be a buyer” said Jilane Fenner of Exit Realty in Cadillac. “It has been a buyers' market in the area for a while. Besides all the homes for sale, it is also a good time to look with the interest rates on the rise.”
Jeff Broddle | Cadillac News
Barry Fall, right, an associate broker with Greater North Properties, shows a house in the Pine Knoll subdivision to Derek Dennis of Great Lakes Property and Construction. Spring is a popular time for home buying and selling.