There’s no question that Big Rapids housing has had its share of chaos since the introduction of the pandemic.

Over the past year, many house seekers have been stuck in a heavily dominant sellers’ market. This has been caused by a large influx of buyers and a smaller number of homes on the market.

“We are having a terrible time finding houses for young couples moving into the area,” Mayor Fred Guenther said.

Along with the increase in buyers, there has also been a large boost within interest rates. Having this increase along with a reported 14.8% national median sales price jump has brought future concern on home affordability.

“We’re not really enthusiastic it’s going to go down,” Guenther said on the interest rates. “It’s been so low that we are worried we’ll be fighting it for a long time.”

While rentals could be seen as potential solution, a rise in rental rates has made it challenging for financial benefit compared to owning a home. The cost of a monthly rent payment is now noticeably more expensive than some mortgage payments. Not only that, but the already low number of rentals makes it even more difficult to find availability.

Local broker Joe McNally believes these factors have brought pressure upon house hunters to buy rather than rent.

“It’s cheaper to pay a payment, taxes, and insurance on a $150,000 house rather than pay rent on a house,” McNally said. “It’s significantly cheaper by several hundred dollars. The high costs of rent are continuing to motivate buyers middle class buyers to purchase.”

Building homes also has been a struggle due to supply chain shortages and increased material prices.

These further resorts the purchasing pool to become more aggressive, decreasing the amount of time a potential customer has to purchase a house.

“If I go back to mid-summer five years ago, our area enclosed 50-60 homes for sale,” McNally said. “Right now, we could have about ten houses go live and eight of them will be gone within 48 hours. This continues to drive the pressure.”

In order to combat this unique market, the local government is considering many options to help people find homes. One way is the start of development projects for building new homes. According to Mayor Guenther, the city has already begun new housing advancements throughout the city.

“What we are doing is starting a development over on the east side of town,” Guenther said. “We purchased 25 acres and are going to try to get a housing development going over there.”

 

This development on Mechanic Street is the first effort the city has made in that particular area. A few years ago, the city began by developing a section of land near Brookside Elementary School. Houses from this development have already sold and according to Guenther, are “an example of really good work by the local government.”

 

Guenther also said there are multiple other development lots opened near Bellevue Avenue and Marian Avenue as well as future project that would extend west down Rust Avenue.

Another option the city is considering is to review and potentially revise the city’s zoning map, which allows specific areas of the city to be occupied by single families, multiple families, or commercial businesses.

“We have to keep our minds open regarding that,” Guenther said. “Back in the day, they changed quite a bit of zoning so we could go from multi-family to single family and get people in some houses. That is all being looked at.”

While the situation will try to become improved, the market will not change overnight. McNally believes the market will start to balance again near summer of 2023. For those stuck between possibly purchasing home, McNally recommends seeing the market through a potential shift.

“Building any ability to be patient is key. Get a professional agent that is willing to wait and slug it out in this market next year. Otherwise, once an opportunity presents itself, you’ve got to be willing to make a fast decision.”

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