How Does the Kalamazoo Housing Market Affect Seniors and Vice Versa?
Most homeowners face the question of whether and when to sell at some point, but for seniors it can be an especially weighty decision. There are lots of things to consider, of course, when thinking about listing your home for sale. For seniors, those considerations may start with the following:
- Your health, both at present and in the future
- Whether or not preserving your assets for your heirs is important to you
- How much longer you can continue to maintain the residence
- Whether and when mobility will become an issue, within and beyond the home
- Whether there’s family nearby for support
To get an idea of what the house market in Michigan looks like these days, not only for older adults but also for anyone who’s interested in buying, selling or even renting a home, we talked with Jaqua Realtors. Based in Portage, Jaqua is a long-time partner of Heritage Community of Kalamazoo, working with seniors interested in putting their homes on the market and moving into one of the beautiful apartment homes in our community.
Dan Jaqua, owner of Jaqua Realtors, provided insights into what has shaped today’s real estate market in Kalamazoo, MI, and shared what he believes it will be like the next couple of years.
What’s the Current State of Housing in Kalamazoo?
The average price of a single-family house in Kalamazoo County, according to Dan, has increased each year for at least the last decade. As a result, we’ve reached the highest average price ever for the local market, at just over $301,000.
On a national level, he notes that equity growth has reached a record high, according to the National Association of Realtors.
Demand for homes in the area is still high, and inventory is still relatively limited. Kalamazoo, mortgage rates have settled and, as a result, the market has essentially stabilized. All of this has created what Dan calls a healthy market: One that’s good for both buyers and sellers.
“Relative to the rest of the nation, even though Kalamazoo County has reached a record high average home price, we’re still considered affordable compared to other cities,” Dan says.
Why Are House Prices Continuing To Increase?
Inventory, or lack thereof, is one of the predominant factors that have driven up prices. Homebuilders left the market after the housing crisis hit in 2008. Many of the tradespeople working in new construction — plumbers, carpenters, electricians, painters and the like — took other jobs.
Basically, homebuilding came to a halt for several years. Even though it later restarted, builders haven’t been able to make up for those inactive years.
Getting skilled workers to come back to new home construction has been challenging, driving up labor costs. The cost of supplies has increased, in part because of supply chain disruptions that began during the COVID-19 pandemic.
New home construction is out of reach for many who would prefer that option, forcing them into the market for an existing home, which they can remodel to suit their needs and preferences.
Another reason inventory is limited, Dan says, is that older adults are staying in their homes longer. Given market indicators, many older adults may want to reconsider this strategy and look seriously at the financial benefits of senior living communities.
Seniors Looking To Sell Their Homes Have an Advantage
The high demand for existing homes, coupled with “tremendous” growth in home equity over the last eight or nine years, gives older adults who want to sell their homes an advantage, according to Dan.
This is particularly true for those who move to a senior living community like Heritage because they can “sell high” without having to turn around and “buy high.”
“When you can sell high and not have to buy, you’re in the ideal situation,” he says.
Not an Excuse To Take Advantage of Buyers
Just because sellers may have an upper hand in setting their price doesn’t mean they can list their house as it is and expect to get the highest price possible, Dan cautions.
Those who go to the effort of preparing their house before listing it, doing what’s necessary to appeal to more buyers, will reap the benefits. Working with a real estate professional and a company like Distinguished Homes that offers market-ready consultations and home-staging services can help home sellers get top dollar.
Important Considerations When Pricing a Home for Sale
As Dan is careful to mention, the amount sellers can expect to receive depends on variables such as:
- The location of the house
- The home’s price range – midrange versus the upper end of the market
- The type of amenities included in the house
- The improvements made to the house
“In our market,” Dan says, “if you were selling a $350,000 house, I’d say, ‘Be aggressive. You’re in a perfect spot.’ If you were selling a $750,000 house, I’d advise being more cautious. You may still have an advantage as the seller, but based on your price range, where there’s more inventory, more competition, you can’t be as confident.”
What Does All of This Mean for Buyers?
Even though the market may favor sellers to some extent, Dan believes homebuyers are still in a good position.
“We aren’t going to solve the inventory situation in the next five to 10 years,” he says. “For that reason, and because we’re seeing all factors pointing to continued strong demand, projections on both the local and national levels are that we’re going to continue seeing prices rise — albeit at a more moderate rate than we’ve been seeing the last several years.”
What About Renters?
Rents, like housing prices, had been escalating at a rapid pace, Dan acknowledges, but he says the acceleration on rents has slowed.
Part of the reason for the slowdown is that multifamily housing can be built more quickly to accommodate the demand for rental properties. Single-family housing, by contrast, can’t be built fast enough to absorb the demand in that market.
Dan says projections suggest that any acceleration in rents will be much more subtle, or even flatlined, when compared with housing prices.
When Will House Prices Drop in Michigan?
No one can predict the future, of course, so the best anyone can do when providing a forecast is to look at the current situation, analyze the trends and trust one’s experience and instincts.
In light of this, Dan offers the following:
“I can start by saying that when you look strictly at indicators like high levels of consumer confidence, high equity growth, strong confidence in job security and wages, tolerable interest rates, there’s no indication that prices will go down in the next couple of years.”
Sellers Need To Have ‘a More Sophisticated Plan’
We asked Dan what advice he could offer older adults who are contemplating selling their house, and this is what he told us:
“My recommendation — and this is not strictly for seniors but for everyone — is you have to have a more sophisticated plan. Years ago, the plan used to be, ‘We’ll put our house on the market in the spring.’
“Now, you need to understand what type of value you have in your house, what kind of equity growth you’ve experienced, what do you need to do to your house to maximize value and increase interest among buyers. All of that makes a big difference now.
“Another part of your plan needs to be how you’re going to accomplish whatever improvements you’re going to make to your home.
“For seniors, especially, the plan also needs to include what the next chapter looks like, and how to coordinate the next chapter with everything else that needs to happen first.
“It can be a lot for older adults, emotionally and physically. But there are services they can rely on to help with organizing and estate sales and the move itself, of course.
“Having a plan in place and then executing it can be extremely helpful for seniors, financially and in terms of their health.”
Is It the Right Time for You?
If you’re a senior in Kalamazoo, house prices are probably in your favor if you’re thinking about selling.
Plus, as Dan points out, moving to a senior living community like Heritage Community of Kalamazoo puts you in an ideal situation because you don’t have to put all of the profit you realize from selling your home into another high-priced house.
Retirement communities like ours address a range of common concerns among older adults, such as a declining ability to maintain their homes, contending with mobility issues, preventing isolation and ensuring access to health services, should they be needed.
To learn more about Heritage Community of Kalamazoo, call (269) 364-6560 or fill out our short and we’ll be in touch promptly!
Featured Image: Jacob Boomsma / Shutterstock
