T
he Greater Lansing area is bracing for a potentially tumultuous spring real estate season, marked by a dwindling supply of homes and skyrocketing prices. According to Erin Kliger, a RE/MAX agent based in East Lansing, the local market's challenges stem from an acute shortage of available properties, which has driven up prices.
"A seller's market is on the horizon for 2025," Kliger forecasts, "due to the scarcity of homes." While this may be good news for sellers, it poses significant hurdles for buyers. Housing prices have surged across the region, with a 6% year-over-year increase in Lansing and Holt, and a 5% rise in Okemos.
The median sales price in the Greater Lansing area has reached $234,000, according to the Greater Lansing Association of Realtors. Statewide, home prices have continued to climb for 18 consecutive months, with new construction homes in Michigan now averaging $450,000. To qualify for such a purchase, households would need an income of at least $150,000, according to the Home Builders Association of Michigan.
Despite these challenges, there are glimmers of hope on the horizon. New home construction is expected to increase by 4% in 2025, with many communities like Haslett and St. Johns seeing a surge in new developments. However, the sticker shock for buyers may be significant, as the average new home price has risen from $375,000 in 2023 to nearly $450,000 in 2024.
Mortgage interest rates remain high, with the U.S. weekly average 30-year fixed rate standing at 6.89% as of February 6th. Experts predict stabilization or slight declines in 2025, which could encourage first-time buyers to enter the market. However, any significant increase in interest rates may push home sales below 2024 levels.
Despite these uncertainties, Kliger remains optimistic. She advises buyers to consider their options carefully and explore programs for first-time or low-income homebuyers, such as down payment assistance and federal tax credits. With a little creativity and perseverance, even the toughest market can yield opportunities for those seeking homeownership.
