Jon from Simple Home Property Management Group discusses the current status of the Grand Rapids, MI rental market going into Spring 2023.
Occupancy Fell This Year
Occupancy did fall this year as we see the market return to the normal seasonality of the winter months being slower. When there is snow on the ground and it is cold, people don’t want to move, so the winter months tend to be slower when it comes to the rental market.
Rental Rates Returning to Normal
The return to normal seasonal fluctuation in rental rates may be here. During the last few years while dealing with the pandemic, we experienced unusually-high rental rates for properties even during seasons that don’t typically command higher rates. Now we may be seeing the rental rates falling back to the typical lower levels during the winter months.
Rental Trend Summary in the Grand Rapids, MI Area
Looking at the rental trend for a two-bedroom, one-bath apartment, we see there are some negatives because we are still in the winter months. However, overall the 3 month change was still positive.
Looking at the rental trend for a single-family rental home in Grand Rapids, rents are slightly up as we head out of the winter season and into the spring.
Collections Are Up
Collections are up in the US, and we are seeing that as well with the properties we manage. People are paying their rent which is always great news. Subsidized housing is down a little bit but is still higher than it has been in the past.
At Simple Property Management Group, our showings, emails, and interest in available rental properties was pretty good this winter. In fact, it was better than last year. This could be thanks to a milder winter with less snow giving people more opportunities to get out to view properties.
Home Prices Increased More Than Rental Rates
As you can see in the graph below, home prices had a dramatic increase in the last few years compared to rental rates. With all the talk of how much rental rates were increased, that pales in comparison to home sales pricing which had a significant spike starting in 2020. Some of the more recent rent rate increases could be attributed to investors’ having to cover larger mortgages on investment properties that were purchased at premium prices over the last few years.
Looking Towards Spring 2023
We are very positive about the rental market going into the spring season.