According to Forbes Magazine, Grand Rapids is the top city in the country to invest in housing for 2016. Forbes cited strong population and employment growth as support for the city’s spot. The area is still heating up, with the first office tower built in several years proceeding as planned, and the Michigan Street Corridor continuing to add new projects. Recently-completed projects are filling quickly. Grand Rapids rezoned 14 properties last year, pointing to more projects to come. The Grand Rapids Association of Realtors reported its average months inventory for 2015 at 2.5 months, the tightest in at least a decade. The 2015 average home sales price bested last cycle’s 2006 peak of $163,924 by over $10,000. On the commercial front, manufacturers across the region are citing lack of existing space as a reason to expand into newly built facilities.
Job growth in Central West Michigan remains strong despite recent relocations to Mexico. According to the BLS, the Grand Rapids area added almost 20,000 jobs over the year ending in December 2015. Growth was strongest in mining/logging/construction, increasing 15.8 percent. Leisure/hospitality and manufacturing both increased over five percent. The Grand Rapids area unemployment rate is presently at a very tight 2.8 percent, as job creation outpaces labor force growth in the area. This will contain future job growth.
Employment in the Grand Rapids area remains heavily weighted towards manufacturing, accounting for about one in five jobs. Easing U.S. exports on the strong dollar will dampen the area’s manufacturing-based economy. Low cost-of-living makes the area appealing for relocations, however, low labor force growth will act as a constraint, making employees harder to find. Switch, set to open a large data center thanks to extensive tax breaks, will employ at least 1,000 people while investing $5 billion over the next decade.
Click here for the complete Central West Michigan Regional Economic Update: CentralWestMI 2016Q1.