Michigan Housing Market Vitality
Michigan metro area house prices are forecasted to underperform the national market over the next twelve months. Currently, the market is underperforming the overall U.S. market. Compared to 12-months ago, Michigan’s housing market has strengthened. Current local economic conditions support an estimated 15.5% increase in house prices over the next twelve months. Based on the housing market vitality of the sixteen metro housing markets which comprise it, Michigan’s housing market ranks thirty-fifth amongst all states and D.C. The three-month outlook is negative.
Housing Market Vitality
Housing Market Vitality summarizes the impact of economic conditions on house prices. A value of 100 corresponds to conditions supporting current price appreciation; values less than 100 correspond to a dampening effect and values greater than 100 indicate a positive impact on house prices. A housing market vitality value can be interpreted as a growth rate. Hence, a reading of 105.8 can be interpreted as a 5.8% annualized increase in house prices.
Michigan Metro Housing Markets
Michigan is comprised of sixteen metro housing markets that account for nearly 82% of the state’s population. The Great Lakes State metro housing markets are unique in their demographics and local economies and exhibit trends that are distinct from the national and state narrative. Each metro market presents its own unique opportunity.
|METRO AREA||SITUATION||OUTLOOK||US METRO RANK (/402)|
|Ann Arbor, MI||Underperforming||Negative||336|
|Battle Creek, MI||Outperforming||Negative||147|
|Bay City, MI||Underperforming||Negative||197|
|Grand Rapids-Wyoming, MI||Outperforming||Negative||152|
|Lansing-East Lansing, MI||Underperforming||Negative||307|
|Niles-Benton Harbor, MI||Underperforming||Negative||209|
|South Bend-Mishawaka, IN-MI||Underperforming||Negative||211|
|Warren-Troy-Farmington Hills, MI||Underperforming||Negative||311|
Michigan’s state economy is specialized in Manufacturing, Other svcs, and Pro Bus svcs. Mining, Construction, and Information industry sectors are less important to the state economy compared to the national economy.
Industry specialization helps explain the differing impact of industry trends on local economies in contrast to industry composition which describes the structure of the economy. A Specialization Index value greater than 100 corresponds to the sector having a greater share of the state economy than it does of the national economy. Sectors with a Specialization Index greater than 120 characterize the local economy.
Compared to the U.S., there is a higher incidence of poverty amongst Michigan residents and they have less purchasing power. There are more high school graduates and a smaller proportion of the population is college educated. Michigan’s population is comparatively less diverse than the overall U.S. population.
A Demographics Index value greater than 100 corresponds to the factor being more intense in the state versus the national average. Characteristics of the local population is a longer-term factor that influences the housing market.