Prospective home buyers can expect to find two things these days in Greater Lansing: New social connections and competition.
Real estate agent Aaron Fox said it isn’t uncommon for 40 to 50 buyers to compete when a new East Lansing home is listed on the market. Since prospective buyers line up to look at each new house, Fox said he has found those buyers get to know each other.
The COVID-19 pandemic created pent-up demand, as the real estate market spent months locked down, said Fox, president of the Greater Lansing Association of Realtors. New home construction and sales of existing homes simply hasn’t caught with that demand.
“I think we’re gonna have a busy real estate market for the next several years, because we don’t have affordable new construction to minimize some of this buyer pool,” Fox said. “And so with less homes being built, or the homes that are being built are not hitting our largest buyer pool, that limits choices for those buyers.”
East Lansing is a seller’s market, which means more people are looking to buy a home than there are homes available, according to the latest data from the Realtor.com Real Estate Data Library. Sellers get multiple offers within a few days, so most choose a day and time to review all listings, Fox said. If they didn’t, “it’d be gone in three hours,” Fox said.
The number of Ingham County homes on the market in March have decreased by 46% since this year’s listing peak in August, according to the Realtor.com Real Estate Data Library.
Real estate agent Lisa Fletcher, associate broker and team lead for Lisa Fletcher and Associates and Greater Lansing Homes, said many buyers are frustrated.
“This particular market is something that’s an anomaly for the Greater Lansing area,” said Lisa Fletcher, associate broker and team lead for Lisa Fletcher and Associates and Greater Lansing Homes. “Never in my career have I experienced the shortage of supply of homes.”
Housing affordability challenges are expected to continue as the Federal Reserve’s raises interest rates to battle inflation, according to a newsletter by Robert Dietz, chief economist for the National Association of Home Builders. This affects first-time home buyers, who are faced with higher costs without the benefits of home equity enjoyed by existing homeowners, Dietz said.
As rates go up, potential home buyers will have fewer choices in their desired area, Fox said. For example, he said a buyer may “find a $100,000 home in Lansing proper, (but) finding that as a single family detached home in East Lansing is virtually impossible.”
Supply-chain shortages also are creating delays and increasing prices to build new homes, said Cindy Kosloski, CEO of the Home Builders Association of Greater Lansing.
“In the past, who would think that we’re waiting on appliances and that we’re waiting on anything from knobs to garage doors to everything?” Kosloski said. “I mean, that can really extend and continue to cause a lot of additional costs, just because you’re waiting.”
Material shortages, price increases and labor issues have affected the speed of home building, said Nate Russell, vice president of Okemos-based Russell Builders Inc. For example, it can take four or five months to receive roofing so builders have to order early to maintain a supply, he said.
When Russell offers a price to build a home, the quote only remains an offer for “a week or two at the most” because prices of several factors change quickly, Russell said.
Russell said some home buyers opt to build more basic homes instead of more expensive, custom homes. Some customers are trading unique trim, tile floors and granite countertops for laminate countertops, vinyl flooring and basic trim, he said.