Market Trends

Investment Sales

March 21, 2023

It’s heating up in western Michigan

It’s heating up in western Michigan

The current multifamily climate remains dynamic. Elevated supply pipelines and slowing rent growth have brought uncertainty and concern to certain “higher-growth” markets. With increased apprehension over absorption of the multifamily supply coming online, investors have increased their scrutiny of markets with potential supply issues. Investors are turning to steady growth and yield-driven markets instead while eyeing those higher-growth markets with more trepidation and conservative underwriting assumptions.

Walker & Dunlop's Midwest Investment Sales team, however, has data showing that the sun is just shining on a different part of the country. West Michigan (and the greater Midwest) continues to deliver strong economic conditions, population and rental growth, and a shockingly limited development pipeline that is well short of demand projections. These stimulants are elevating previously overlooked markets to the top of the pile for investors. A recent study done by Bowen National Research provided compelling data that we want to share so you can take advantage of the opportunity. 

Population growth

  • Grand Rapids and its MSA have experienced strong population growth over the past 10 years, and it is not projected to slow down. Between 2010 and 2020, population growth in Grand Rapids was 5.4 percent and population growth for the MSA was 10.9 percent over that same period. 

Increased rent collection

  • From 2020 to 2022, median collected rents escalated rapidly in Grand Rapids, particularly among market-rate rentals.  For one bedroom/one bath floor plans, median collected rent increased by 28.8 percent ($1,095 to $1,410), while two-bed/two-bath units increased by 21.6 percent ($1,480 to $1,800)

Low for-sale homes inventory

  • Over the past few years, the for-sale housing market in Grand Rapids has broken records. Median sale prices of homes increased 99.2 percent in Grand Rapids and 74.8 percent in Kent County since 2016. Since 2019, there has been a striking increase in home sales in the area, with 2021 having the greatest number of homes sold (3,030). The competitiveness of the market can also be contributed to the dramatically diminished stock of supply. The vacancy rate in Grand Rapids is only 0.4 percent, well below the normal range of 2.0 percent to 3.0 percent, which is an indication of extreme shortage of available for-sale housing

Housing supply shortage

  • The Bowen study estimated an overall housing gap of 7,951 rental units and 6,155 for-sale units over the next 5 years in Grand Rapids. It estimated a housing gap of 5,107 rental units and 15,486 for sale units over the next 5 years in Kent County. 
  • Since the 2020 Housing Study done by Bowen, the estimated number of rental units needed in Grand Rapids increased by 48.9 percent and 42.6 percent for Kent County. These drastic changes from the 2020 study speak to how rapidly the housing gap is increasing.  

As mentioned above, key performance indicators have consistently proved that there is a lot of potential left in the Grand Rapids and broader West Michigan markets. Population growth, for-sale homes inventory, and the severe housing supply shortage create the perfect storm for successful multifamily investment. Please reach out to Matt Jones or Ryan Peña for more information. 


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