Michigan Real Estate Market Outlook

Michigan’s real estate industry is as dire as its automobile production. As the Big 3 manufacturers appeal for a bailout to salvage their operations and thousands of employees from termination, there seems to be more trouble in the state’s economy. The average home prices in the eighth most populous state in the country is down by a significant rating that left a lot of homeowners losing their homes to foreclosure last year.

Detroit’s population shrank from 1.2 million in 1980 to 830,000 currently. Businesses are highly affected as more segments of the population fall below the poverty level. Unemployment is expected to peak at 15 percent this year. To counter this problem, a number of organizations have pledged support like Michigan’s Unemployment Insurance Agency, the Goodwill Industries of Greater Detroit, Detroit Regional Chamber and the Detroit Economic Growth Corporation.

The capital, Lansing, has turned its sights to the technology sector including I.T. and biotechnology after the poor sales of the auto industry. This comes after thousands of workers lost their jobs after commercial activity has lost ground. Naturally, mortgage payment defaults rose that shoot up foreclosure rates to high levels. These days, touring around the city will give you a glimpse of the vacant homes in the area. RealtyOutlook.com expects a 16.5 percent fall in home values for Mid-Michigan metro.

Marquette, the largest city in the Upper Peninsula, is faced with massive payroll employment cuts in the manufacturing and business services. This year, more employees will be facing risks of unemployment if the city’s recreation and tourism-related firms lose their grip in the narrowing market. Total home foreclosure has been edging upward and is expected to remain so throughout the year. RealtyOutlook.com expects home values to plunge by 9 percent.

Grand Rapids’ economy is centered on home and office furnishing and health care fields. While the former has experienced a slowdown due to lower demand because of the property debacle, the health sciences and biotechnology firms are expected to support the entire economy. The real estate situation in the city is far from a complete turnaround. Last year’s slight uptick in home values now seems to take a longer time to recover. More so, borrowers who secured adjustable rate mortgages won’t be refinancing easily given their lower credit scores. Home values are subject to a 15 percent deflation this year.