Insight — A Deep Dive into the West Michigan Real Estate Market

A Deep Dive into the West Michigan Market E V E RY T H I N G YO U N E E D T O K N O W T O N AV I G AT E T H E R E A L E S TAT E M A R K E T I N T H E C O M I N G Y E A R

ISSUE 4

F A L L 2 0 2 21

letter from the editor

I NSI G HT IS WRIT TEN , PRODUCED, AN D PU B LISH ED BY TRE ADSTON E FU N D I N G

The truth these days is hard to find in a culture that thrives on clickbait and fear. This edition of Insight is a non-biased, micro dive into this extraordinary place we call home— West Michigan. Everyone we’ve featured in this edition are leaders within their industries, have a reputation of being creditable, and lastly, they are all fellow West Michigan residents.

Our mission as a company has always been to inform and educate our clients, above all else.

This publication in particular, is born out of our passion to share with our community the information we see from the front lines, and in turn to make them savvy consumers.

As the second largest residential mortgage company in Kent and Ottawa counties, based in downtown Grand Rapids, we have an incredibly unique vantage point of the ever-changing economy and real estate market in West Michigan. We see firsthand, in real time, buying trends based on economic expansion and job growth, supply and demand, government incentives and legislation, and more importantly, who is buying and the types of properties they desire.

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What The Media Isn’t Telling You

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The State of the State’s Real Estate Market

Kevin Polakovich & Brendan O’Driscoll

Walter Perschbacher

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Can Appraisers Predict the Market?

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The New Normal

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Building Our Way Out of a Housing Shortage

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Building Dreams

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West Michigan: The Hidden Gem of the Midwest

Mike McGiveny

Ryan Yearack

Katie Karczewski

Blaine Feyen

Michael Berkemeier & Aaron Veldheer

Getting the Right Guidance Makes All the Difference Scot Veneklase

BRENDAN O’DRISCOLL & K E V I N PO L A KOV I C H

Co-Owners & Founders of Treadstone Funding 4

what the media isn’t telling you A B O U T I N T E R E S T R AT E S , T H E H O U S I N G M A R K E T, & R I S I N G E Q U I T Y

We have seen many ups and downs in the last 25 years and at least four interest rate cycles. With the housing market cooling a little bit, the question many ask is: are we headed towards the same problems we saw in 2008? The answer is definitely NO. We are in a much healthier housing market today than we were then.

20 0 8

2022

Avg FICO Credit Score

699

751

Mortgage Delinquencies

9.3%

3%

Underwriting Guidelines

Weak & less regulated

Very strong & highly regulated

Programs

Risky, adjustable rates, prepayment penalties

Solid programs with various down payment options

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Currently, the local housing market has more inventory than we’ve seen in a few years along with a lower amount of prospective buyers.

Currently, the local housing

strong lending guidelines and

market has more inventory

strict appraisal requirements.

than we’ve seen in a few years

The builders are not building

along with a lower amount

enough homes to keep up with

of prospective buyers. This

the housing need, and they are

leads to a more stable home

not likely to catch up to the

buying experience without all

inventory shortage for years.

the ultra aggressive offers.

This continual lower supply

The competition in the market

keeps demand high, and there-

today is less frantic than in the

fore stabilizes increasing home

past couple years, allowing

prices.

buyers more time to make a decision and do their due

So what should you do? Con-

diligence when purchasing a

tinue renting, or dive into the

home. We are also seeing more

housing market? Paying rent

FHA, VA, and MSDHA offers

still isn’t the best option. Last

winning, seller concessions,

year rental prices went up 13%,

and full inspections.

and are predicted to go up at least another 5% this year. Not

The media focuses a lot on

to mention that paying rent

potential bubbles, recession,

goes 100% into someone else’s

market crashes, and fluctuat-

pocket.

ing interest rates. While the

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truth of the matter is that the

When it comes to buying a

overall housing inventory is

home, you have to take into

still low, and there are millions

account both home price ap-

more buyers than there are

preciation and interest rates.

homes for sale, creating a

The home you buy today will

larger demand. With high

most likely cost 8-10% more

demand for houses, there is

12 months from now. Imagine

no reason to think that a crash

paying $40,000 more for a

in the residential market is

$400,000 house next year or

coming. This is bolstered by

$15,000 to $20,000 more for

a $200,000 house next year.

Interest rates have gone up this year, but interest rates are temporary. They cycle up and they cycle down.

Based on these patterns,

J UNE 2022

DECEMBER 2022

List Price

$300,000

$300,000

Sale Price

$330,000

$270,000

Down Payment

10%

10%

Rate / APR

4.5% / 4.66%

6.5% / 6.78%

Monthly Payment

$1505

$1536

purchasing a home today allows you to buy a home at a lower purchase price and start building equity—with the opportunity in the near future to refinance to a lower rate.

West Michigan is a particularly strong market; affordability is better here, income is better here, and the cost of living is not extreme like so many parts of the country. If you need to buy a house to get into a different school district, make room

Purchasing a home today allows you to buy a home at a lower purchase price and start building equity — with the opportunity in the near future to refinance to a lower rate.

for a growing family, relocate for a new job, adjust to a life change, or just for a change of scenery—we recommend diving into the market so you can start building wealth. Give us a call today so we can chat about your unique situation, and help get you into your new home!

Example is for illustrative purposes only. Based on a 30 year mortgage. Payment includes principal and interest—taxes and insurance not included. Please contact us for an exact quote.

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the state of the state’s real estate market Walter Perschbacher President-Elect of Greater Regional Alliance of Realtors

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It seems like everybody’s talking about the housing marketing right now. Is this a bubble? Should we be worried? Is it a good time to sell?

What’s happening with interest rates? There are a lot of questions.

We sat down with the President-Elect of the Greater Regional Alliance of Realtors (GRAR), Walter Perschbacher, to get a little clarity on the current situation.

So Hot Right Now If there’s one thing we know for sure, it’s that the West Michigan real estate market is hot with a capital “H.” In recent years, home prices have accelerated the fastest they ever have (like, ever). Unfortunately, this is affecting firsttime homebuyers the most, because homes priced at $150,000 to $300,000 command the highest levels of competition.

What’s causing this?

1. Location, location, location. Over the past decade, there has been a culture shift in our region, especially within Grand Rapids and surrounding areas.

Grand Rapids is now filled with amazing dining options, arts and culture opportunities like ballet and opera, sporting events, big-name concerts, and great shopping. We offer small-town living with big-city amenities.

2. People have equity in their homes, which wasn’t the case during the housing crisis of 2008.

3. The stock market has become less volatile, so real estate is a safer investment.

4. Companies like Open Door and Zillow were selling to out-of-town investors and flippers.

5. There’s high demand and nationally, we are experiencing a housing shortage.

Simply put, there are too many people, not enough homes.

6. Restrictive zoning laws will not allow new builds in certain areas of the city.

Not to Burst Your Bubble…

But this is not a housing bubble. “I hear 2022 being compared to the housing crisis of 2008 a lot,” Perschbacher says, “and that’s just not right.” While the 2008 recession was caused by real estate, our current market is fluctuating so much because of factors we haven’t experienced before in our lifetimes: a global pandemic, war, rising interest rates, and a national housing shortage.

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Using a Real Realtor

The Waiting Game

Over the past ten years, the role of the real estate

The most common question in real estate right now

agent has changed drastically. “As a Realtor, you

is, ‘Should I wait to buy or sell?’ Although the market

have to be super knowledgeable and really on top

may seem totally unpredictable, Perschbacher says

of things,” Perschbaucher says. “We’re no longer

that’s pretty normal. “No one can really predict

just competing with other local agents, but home-

what the market is going to do because we have

owners who are attempting to buy and sell online

never come across this unique set of challenges

through sites like Zillow.”

before.”

The data shows that time-and-time again, the best

One of the issues right now when it comes to in-

way to get a good deal and sell a house is to list on

ventory is that the two largest generations are at

the MLS—something only a Realtor can do for you.

odds with each other, Millennials and Baby Boomers.

Plus, in our ever-changing market, a Realtor is going

Boomers are healthier, living longer, and have built

to be way more plugged in.

wealth. They’re not ready to trade their suburban home for a condo because most of them are still

So, why use a real Realtor?

fine maintaining it. Millennials want to buy, but

1. Purchasing a home is about more than just price. You need to know what to look for, how to coordinate with all the other parties involved, and be available at the drop of a hat.

there’s just nothing to buy right now—because the

2. The stakes are high. Many people’s homes are their #1 investment in the portfolio.

down considerably in the past twenty years. Many

3. Often, the need to move is brought on by a major life change, like the birth of child, marriage, death, or divorce. It’s a highly emotional transaction, and you need someone to advocate for you rationally.

because they are often more profitable. When it

4. In a hot market like ours, a Realtor’s relationship with the Realtor on the other side of deal can sometimes make or break a buyer’s deal being accepted.

5. Markets are ever-changing. It’s a Realtor’s job to understand the ups and downs and help you navigate these changes.

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Boomers are still in their homes.

Another issue is that home building has slowed development companies are building rental units comes to building more homes, modern zoning laws have created some challenges, and many new developments are not a moderate or market price point.

The market is never truly balanced, so it’s a good idea to just hop on your surfboard and ride the wave.

market stats AVERAGE HOME SALE PRICE YTD through October – Kent County

$350,692

2022

$309,376

2021

$267,914

2020

$246,484

2019

$231,100

2018

HOMES SOLD PER PRICE RANGE October 2022 — Kent County

$0-$200k

106

$200k-$400k

407

$400k-$600k

91

$600k-$800k

34

$800k +

18

34

18 106

407 91

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CAN appraisers PREDICT THE MARKET? Blaine Feyen has been in the appraisal business since the ‘90s. “Long enough to see three distinct shifts in the market,” he notes. And he knows that appraisers aren’t well-liked because, to be frank, they can sink the whole deal.

Covid changed how appraisers work—but not all for the worse. Like many other areas, there’s a shortage of workers… which is likely why your home is being held up with the appraisal process.

So, we’re going to explain what an appraiser is, what they do, why there’s a shortage, and why even they can’t predict the market.

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“West Michigan is in its own little bubble… it’s hard to predict.”

BLAINE FEYEN

Owner & Founder of Real Value Group 13

W H AT D O E S A N A PPR A I SE R AC T UA LLY D O? An appraiser’s job is to determine the current value of

Homeowners also sent photos and videos of the inside of the house as well as having a phone call with their appraiser, so that they could adequately inspect the interior, too.

a property for the potential buyer. Most of the work to determine the value of a real estate appraisal is done

Blaine said that before Covid, he and his team would

during an on-site inspection, where the appraiser will:

spend endless hours on the road driving from home to

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Conduct a room-by-room walk-through to appraise

home across the state. This new method of appraising

the condition of the interior.

has proven to be effective and is a total time saver.

Walk the length of the property for an appraisal of the condition of the exterior.

•

Appraise the value of any amenities, like a f inished basement, swimming pool, or built-in bar.

But on the f lip side, appraisers were in high demand during the Covid housing boom. So, there was a shortage, making the process even more drawn out. Some states were backed up for three or more months. This

•

Note any health or safety code violations.

happened in North Dakota, and they actually had to

•

Record the layout of the property, inspect the

declare a state of emergency. Blaine thinks this is why

square footage, and determine whether it’s a single

there were so many appraisal waivers during Covid—to

family dwelling.

speed up the process and ensure that the home purchase would go through.

Off site, the appraiser may also evaluate the current real estate market, considering comparable properties

A big delay in the system was coming from the humans

in the neighborhood, to help evaluate the home’s value

themselves. Blaine said that during the life cycle of

or fair market value of the property.

an appraisal spends about 85% of it’s time sitting in queue, waiting for someone to work on it.

The appraiser will then draw up a report to let the lender and the potential home buyer know if this is a worthwhile investment.

H OW D I D COV I D C H A N G E TH E A PPR A I SA L PRO C E SS?

CO U LD N ’ T A PPR A I SE RS J UST B E R E PL AC E D BY TEC H N O LOGY? Technology has gotten so good that they can risk model much better today because of all the data that’s been gathered from houses across the country. 30 years

During Covid, it was unsafe to go and poke around in

ago, we didn’t have access to these data points. But

people’s homes. Instead, appraisers started conduct-

technology can’t tell if someone has 27 cats, the house

ing “drive-by appraisals,” where appraisers drive past

smells gross, or if there’s a crack in the foundation. So,

the home and inspect the outside rather than going in.

real human appraisers are still needed.

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A PPR A I SE RS M UST K N OW W H AT’S G O I N G O N I N TH E M A R K ET

“With that being said, humans are pattern seekers.

But if you’re looking at the last market change in 2008-2009, that was caused by something completely

In short, they don’t. Blaine explains, “West Michigan

different than what’s happening now. We have lots of

is in its own little bubble… it’s hard to predict. Plus,

factors that many of us have never experienced before

‘market’ is a big word. Markets are local. We’re insulat-

in our lifetimes, like a pandemic, supply chain issues,

ed in West Michigan—not like Boise, Austin, Tucson,

a labor shortage, a potential recession, and war,”

or other boomtowns. And we need to remember, West

Blaine explains.

Michigan is still very cheap compared to New York or LA.”

So, not even the appraisers know what’s going to happen with inventory. Blaine said when he saw his

What Blaine is saying is that it’s all relative. Wages are

first price decrease come across his desk “It was called

good in West Michigan, there’s an inf lux of wealth

a ‘massive price improvement,’” he jokes.

to prop up the markets, and we also have great free education. So, we’re kind of an anomaly.

the new normal an economic viewpoint on the West Michigan real estate market

If you want to know how the economy’s doing, ask an economist, right?

No offense against economists, but it seems more practical to ask people who are doing more than predicting. People like Michael Berkemeier and Aaron Veldheer of Strategies Wealth Advisors in Grand Rapids, who are helping their clients spend and invest their money wisely.

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Aaron Veldheer & Michael Berkemeier Managing Director & Founder Strategies Wealth Advisors

Take a deep breath.

It’s all going to be okay.

Michael, Founder, and Aaron, Managing Director at

“The biggest thing to know,” Michael says, “is

Strategies Wealth Advisors, are two good friends

that people are fear-based right now. How can we

who started a wealth advisory company to help

combat those worries? With good, solid informa-

people build their legacies. Michael and Aaron are

tion.” With inflated news stories and lots of biased

building a legacy right alongside their clients. They

predictions, it’s hard to tell what’s true and what’s

are committed to bettering the lives of their em-

clickbait.

ployees and are growing at a crazy rate because of it. They are true believers in “you can talk about it,

But Michael and Aaron are both so confident in

but you gotta be about it.” They’re so devoted to

the market here in West Michigan, that they have

this, in fact, that they sent each of their employ-

personally invested in it. “We put our money where

ees on a vacation of their choosing to show just

our mouth is,” says Aaron.

how appreciative they are.

They practice what they preach, and don’t advise something they wouldn’t tell their own family. So, we asked Michael and Aaron to give us the inside scoop on what their clients are investing in right

Investing In West Michigan Real Estate Is Going To Pay Off

now, their take on the real estate market, and an

“It’s just a matter of when,” Aaron says. “A house is

economic viewpoint of what’s happening in West

a home, not just another investment. It’s the place

Michigan and the nation.

where you’ll open Christmas presents, bring home

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your new baby, see your kids grow up… You can’t

“Another thing to remember is that banks are

shoot hoops out back with your Apple stock,” he

stable. Houses are going for fair prices. And this

jokes.

inflation that just happened in the residential world was long overdue because supply was so

“Some of our clients are worried about investing in

down,” Michael notes.

real estate because it doesn’t pay you an income,” Michael adds. “But we like to take a holistic view

If you keep saying to yourself, “I’ll just buy when

of the balance sheet and make sure portfolios are

the market cools down,” Michael and Aaron are not

diversified.”

convinced that’s going to happen. They predict that interest rates and equity are going to contin-

Right now, the stock market is unpredictable

ue to rise to hopefully level the market out.

while real estate is holding steady. With a diverse range of investments, it makes even risky financial

“When we think back to rates in the ‘80s, interest

moves feel safer.

was at like 18 or 20%. Comparing that to today’s low rates, we need to look at how the market can

“West Michigan is a safe place to invest in the real

find its middle ground again,” says Aaron.

estate market. People are coming here in droves from big cities,” says Michael.

What About The Pending Recession?

This Is The New Normal

“There may be a recession, and it could impact a

“The market isn’t a bubble that’s going to burst.

going to have a lot of impact on housing.”

lot of things,” Michael says. “I just don’t think it’s

We’re not going to hit a cliff like we did in 2008 because this market change isn’t built on shady

“It really depends on the length and depth of the

business practices,” says Aaron. “I don’t believe

recession. But I think we’ll get through smoothly

we’re going to see foreclosures, houses selling for

on housing because this is not like 2008 when the

$10,000, or other crazy things like that. This is just

recession was caused by an issue with mortgages.”

the market normalizing.”

So, what’s the lesson here? We think it’s ‘don’t When we look at the facts, this makes a lot of sense.

believe everything you hear.’ Check the facts.

• Interest rates were at record lows during 2020-2021.

Come to conclusions yourself. Talk to an expert,

• There’s a national housing shortage.

(Econ 101: supply and demand.)

to financially weather any storm.

• Inflation is up, but so are wages.

like Michael or Aaron, who can advise you on how

Take a deep breath. It’s all going to be okay.

• Employment numbers are high.

• Companies are hiring, which means they are doing well.

• Appreciation is healthy.

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SCOT VENEKL ASE

Loan Officer at Treadstone Funding

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Getting The Right Guidance Makes All The Difference ADVICE FROM A LOCAL EXPERT

Scot Veneklase has been in the mortgage industry for just over 21 years. He’s seen it all: the ups, the downs, and everything in-between. With the onset of rising rates, he’s here to offer some smart advice from an industry veteran.

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Scot doesn’t take his job lightly.

a home based on your lifestyle

knowledge of the West Michi-

“Your home is a big deal. And I

and family needs, and not on

gan market and the real estate

feel honored to be part of that

what the market is doing. The

agents who work in it. It’s this

decision.”

interest rates are just part

familiarity that allows them to

of the environment you’re in.

go to bat for you by leveraging

As a family man himself, married

You can always refinance, but

their proven reputation. Second,

to his high school sweetheart

you can’t easily, or affordably,

and this is key, an experienced

with two kids, Scot understands

change your home.”

lender will be able to structure

that for most people, moving

a loan to meet your unique

is not about whether the rate is

“My second piece of advice is

needs and situation. Most peo-

up or down—it’s a life decision.

to always work with an experi-

ple don’t realize that getting

enced local lender.” When you

the right guidance on a loan can

Don’t focus on interest rates

work with a lender who is both

make and save them a lot of

too much. “The market flexes.

experienced and local, you

money.

It’s just how it is and always will

automatically have an advan-

be… My best advice? Purchase

tage. First, they have a keen

“For most people, moving is not about whether the rate is up or down–it’s a life decision.”

That being said, how do you find

So, what does the future of the

waiting until things cool off,

a good lender that can work

West Michigan market look like

sorry, but that’s probably not

with your specific needs? Scot

according to a guy who’s seen

going to happen.”

put together a little checklist

it all? Scot is estimating that

of five important questions to

through the end of 2022 we will

Unlike the 2008 housing crash,

make sure they’re a good fit for

see double digit appreciation

caused by bad lending practices,

you and your family.

values with healthy appreciation

this shift will not impact the

into 2023. “Home values will

housing market. “I don’t see

1. Ask them and your agent

not go down in West Michigan.

foreclosures happening,” Scot

about their reputation

I just can’t see that happening,”

says. “Home values will continue

within the community.

Scot says. “Houses are cheaper

to rise, and things will level out

than they are going to be ten

eventually.”

2. How long have they been in the business?

years from now. So, if you’re

3. What’s the flow of their pre-approval process?

4. Do they close on time?

5. Do they work with local appraisers?

“Purchase a home based on your lifestyle and family needs and not on what the market is doing.”

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BUILDING OUR WAY OUT OF A HOUSING SHORTAGE Semi-Custom Builds As An Affordable Alternative To Buying An Existing Home

Mike McGivney VP of Sales at Allen Edwin Homes

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True or false? Buying an existing home is more affordable than building a new one.

Even though Allen Edwin is building 700 houses a year (that’s about 2 a day if you’re not a math guy), they work hard to ensure they’re not overworking their construc-

If you answered true, well, that used to be the case.

tion crews. They know labor is at a premium right now,

But with a wide variety of options for custom and

so they’re combating that by treating their crews right

semi-custom building, a national housing shortage,

and ensuring them reliable, steady work.

and home prices up more than 20% from 2021, building has actually become a more economical option for

Okay, so, you’re probably saying to yourself, “Even if

many home buyers.

it’s not as expensive as I thought, I’m going to have to wait forever to be able to move into the area I want.”

According to Mike McGiveny, V P of Sales at Allen

Sorry, but wrong again. Allen Edwin focuses on build-

Edwin Homes, it’s the builders who are the only ones

ing homes in popular West Michigan suburbs, like

who can “get us out of this housing shortage mess.”

Byron Center, Caledonia, Hudsonville, Kentwood, and

So, he and his team at Allen Edwin Homes have tran-

Lowell. See a house you love in Lowell, but really want

sitioned into building new homes with affordability in

to be closer to Kentwood? No problem. Lots of these

mind, especially for the underserved f irst-time home

semi-custom homes are being built, but then waiting

buyer market. With 75% of their clientele as f irst-time

to be f inished until the right buyer comes along.

home buyers, 1,800-2,000 square-foot homes in the $200K-300K range are the sweet spot.

Another huge benef it to building with guys who have done the same thing multiple times before is that they

Well, what about the construction loan and building

can make it ultra-eff icient. And we’re not just talking

costs? With a semi-custom home builder like Allen

about the speed of the work. But also, the eff iciency of

Edwin, those things are covered. All they need is a

the energy usage in the home. An Allen Edwin home

mortgage. A buyer can get a pre-approved, put down

saves approximately 30-40% on their energy bills,

earnest money, and lock in their rate—which is super

compared to a typical home built to code—which can

important in our current climate.

add up to $300-350 a month in savings. They use all LED lighting that provides lower electrical costs and

Then why does home building have this stigma of

longer, more sustainable lighting. And when they’re

being only for the super wealthy? Custom home builds

working on a site? Well, they only use one dumpster

can be pricey. But with semi-custom builds, the buyer

for every three houses vs. the typical three dumpsters

still gets to pick from a wide range of options, like

per one house.

paint colors, cabinetry, f inishes, f looring, and even things like a loft-style bedroom or f inished basement

So, this semi-custom home building thing? It really can

—but it’s more controlled. Plus, with supply chain

save you money. And if you’re a f irst-time homebuyer

issues, semi-custom builders have more predictability

who’s lost all hope of owning your own little slice of

since they use similar items again and again.

the American dream, maybe it’s not so far off after all.

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“THE BUILDERS ARE THE ONLY ONES WHO CAN GET US OUT OF THIS HOUSING SHORTAGE MESS”

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building dreams Ryan Yearack Owner-Builder of RMY Custom Construction 28

The United States is experiencing a housing shortage. An article published by NPR in March of 2022 states that, “The U.S. is more than 3 million homes short of demand from would-be homebuyers.”

That’s a lot of houses.

The solution to a housing shortage? Build new homes. But as we know in our new post-Covid world, things aren’t that simple anymore.

Once you’re able to find (and afford) land to build on, you’ll be met with a variety of ever-changing issues, including everything from the price of lumber to supply chain delays to worker shortages.

So, how can you, a potential future home builder, make sure that your project is going to go smoothly?

Well, we sat down with Ryan Yearack, Owner-Builder of Custom RMY Construction, to chat about the new era of home building. As a custom home builder of 20+ years, Yearack has great insight into what it takes to make sure your build gets done right— despite the challenges.

7 Questions to Ask Your Custom Home Builder in 2022

1

What kind of experience do you have?

This question is kind of a “duh,” but it’s an important one, nevertheless. With the ever-changing landscape

As with anyone you hire for any job, it’s important to

of home building, Yearack recommends that you use

thoroughly interview them. Yearack provided seven

a custom home builder who has years of experience

important questions to ask your custom home

under their belt. “It’s a great idea to see a portfolio

builder to make sure you don’t run into any major

or samples of their work, too,” Yearack says.

delays or challenges once you’ve broken ground.

Why is experience important? For starters, a seasoned builder will have a wealth of knowledge to draw from, including valuable connections that can possibly help them overcome labor shortages and even some supply chain issues. According to Ryan, “An experienced builder is not going to be bothered by problems. They’ve seen it all. They know what they’re doing. And they know how to work through any unexpected problem that might arise.” And if watching HGTV has taught us anything, it’s that there is always going to be some type of unexpected issue that comes up. (The drama!)

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2

How often does the Owner-Builder show up to the work site?

4

What happens if the price of a product increases or decreases?

In the custom home building industry, it’s common

It’s the hottest word of the year: inflation. Pricing

practice to have the Owner-Builder run the project

is unpredictable. Although the price of lumber has

but not actually show up to the work site, or as you

dropped dramatically since it skyrocketed in 2021,

know it: your future home. But what if something

other things are now becoming more expensive.

goes wrong? Or a subcontractor isn’t meeting the

Ryan explains, “A typical industry standard for a

Owner-Builder’s standards? If your Owner-Builder

builder’s markup to the customer is about 15%. This

isn’t at the site, they would never know. And there

hasn’t changed since 2020.”

could be a mistake made before it’s too late.

“But in this current climate, I’m going to be honest: people who are doing full custom builds need to have

3

Do you have strong, long-lasting relationships with your subcontractors?

deep pockets. I’ve seen material costs skyrocket to $40,000 more than what we planned for at the beginning of the project. And, unfortunately, that’s not something a builder can predict, no matter how experienced they are.”

This question addresses the labor shortage headon. AKA, will there be people to put in the plumbing and electrical? Yearack says to “seek out home builders who have long-standing relationships with their subcontractors. These companies will likely not be as affected by the labor shortages.”

5

What has been your biggest challenge over the pandemic?

“Right now, it’s so important for me to keep my

Whether it’s rising costs, the six-week shutdown,

guys happy and busy. If I’m always giving my con-

labor shortages, or something else entirely, it’s

tractors a reliable schedule with new projects, they

good to know what you’re up against. As inflation

won’t need to go anywhere else for work. It’s as

rates continue rise, it’s ultra-important to under-

simple as that, really.”

stand how your builder handles price increases and unexpected roadblocks.

Yearack says, “There was never a time requests

“An experienced builder is not going to be bothered by problems. They’ve seen it all.

They know what they’re doing.”

30

slowed down for me during Covid. People are still wanting to build houses. In fact, I’ve had to turn down work.

“It’s really the prices and the shortage of materials that’s messed with my work. When stuff doesn’t show up, it screws up everyone’s schedule.”

How does Yearack handle that? “Lead time is now determining building timelines… And I hate to say it, but custom home building is a very tough industry to be in right now.”

No matter how on top of it your builder is, just be prepared for some delays. And remember that they are trying everything they can to make things move quickly for you.

7

Do you maintain a relationship with past clients?

Yearack’s secret to his success? “I truly care,” he says. “It’s good to make money, but I want people to like me after the project’s done.”

“We have a warranty on all our builds for a year. If something breaks, we’ll come and fix it—no questions asked. But I consider myself on the hook

6

What is your lead time on projects, and what is holding you back?

with my clients forever, even after the warranty expires.” It’s that kind of pride of workmanship and dedication that’s going to get you the best build possible.

“A lot of times, it’s not the builder that’s the issue.

It’s ordering things like lumber, windows, or appliances,” Ryan says. With the microchip shortage, appliances are taking much longer to get to the customer. “Depending on the brand, you can wait anywhere from six months to a year-and-a-half for a fridge to come. Needless to say, that really messes with the build schedule.” Building basics are a huge issue, too. “There’s no alternative to wood…

If we don’t have lumber, we can’t build.”

“If something breaks, we’ ll come fix it—no questions asked... I consider myself on the hook with my clients forever.”

“Things are slowly getting better,” Ryan says, “but, right now, timing and cost are still unpredictable.”

Interested in working with Ryan on a project?

Send him an email at ryan@rmycustom.com 31

west michigan:

the hidden gem of the midwest

K AT I E K A R C Z E W S K I

Owner and President of Katie K Realty Team

What’s so great about West Michigan?

Well, if you ask long-time West Michigan Realtor, Katie K, just about everything.

We sat down with Katie Karczewski, Owner and President of Katie K Realty Team, to chat about why she’s still investing in the West Michigan real estate market after 35 years, and why she thinks you should be too.

When she was just starting out in the real estate business in the late ‘80s, Katie recalls heading into downtown Grand Rapids on a Tuesday night for a cocktail with a friend. “You could have shot a cannon off in the street, and no one would have heard it,” she jokes. “Things have changed a lot since then.”

“We have everything you could want from a big city, but it’s just a lot easier—less traffic, less hassle, and less cost. It’s like Chicago, but on a smaller, more manageable scale.”

So, what is it that put the “Grand” in Grand Rapids?

“We have everything you could want from a big city, but it’s just a lot easier—less traffic, less hassle, and less cost.”

33

We Prioritize Arts & Culture Grand Rapids has made a huge effort to bolster the

up for revitalization with plans for a $64 million

art scene. Of course, there’s the obvious: ArtPrize,

expansion. We can’t forget about John Ball Zoo,

an independent international art competition that

Frederik Meijer Gardens & Sculpture Park, and a

has fills the city with art (and art lovers) every year.

massive number of local parks, playgrounds, and

Downtown cafés, museums, and even churches hold

other amazing places to discover.

expositions of art in all mediums made by artists from around the globe, and viewers can vote for

If you’re in the mood for a show, there are so many

their favorite piece.

options to choose from. Katie is a huge fan and a Board member of Broadway GR, which brings in eight

There are amazing restaurants and bars through-

Broadway shows annually to the DeVos Performance

out the city, with every kind of cuisine imaginable.

Hall. Right down the street, Van Andel Arena brings

The stream of new restaurants and bars seems

in international acts. And then there’s GLC Live at

constant, with delicious new choices popping up

20 Monroe, a smaller concert venue that hosts indie

almost weekly. And the Fulton Street Farmer’s

artists, mid-size acts, and dance parties. There’s

Market, a hot spot for Saturday morning shopping

also the Civic Theatre, Opera Grand Rapids, Grand

in the summer, if you’re more of the home-cook type.

Rapids Ballet, Grand Rapids Symphony, comedy clubs, state-of-the-art and historic movie theatres,

Grand Rapids is home to the first LEED-certified art

concert venues, and clubs. Whew!

museum, the GRAM, which brings in brilliant traveling shows and has a gasp-worthy collection of its

“So, if you’re bored in Grand Rapids, it’s your own

own. The Grand Rapids Public Museum is ramping

fault,” Katie laughs.

34

Our Public Schools are Top-Notch “The thing families request most when they’re looking for a home is, ‘I just want a really good school district.’ And, luckily, it’s so easy for me to deliver on! It is actually kind of hard to find an area in Grand Rapids with a poor school district,” Katie says.

City High Middle School, part of the Grand Rapids Public School System, was recently recognized as a National Blue Ribbon School and is currently ranked as the #18 school in the nation. (Yes, the nation!)

City also offers a comprehensive International Baccalaureate (IB) program to its students at no additional cost.

East Grand Rapids High School in the EGR Public School District has the most students that go on to obtain a master’s degree or higher.

Plus, Forest Hills, Black River, Byron Center, Spring Lake, Hudsonville, Jenison, Grandville, and Rockford all rank among the top #15 for public school districts in West Michigan, according to U.S. News.

And that doesn’t even begin to scratch the surface.

West Michigan also has amazing private schools, like Grand Rapids Christian and Catholic Central,

No Shortage of Natural Resources

charter schools, and unique educational opportuni-

With droughts out west and flooding down south,

grade nature program, and the Grand Rapids Public

climate change is becoming a factor in choosing

Museum High School.

ties, like the Aviation Academy, the Blandford 6th

a place to call home. And if you passed 4th-grade geography, you know that Michigan is surrounded

Grand Rapids can really be thought of as a “college

by four of the five Great Lakes. So, freshwater? Yup,

town” because, well, we’re surrounded by colleges

we’ve got plenty of that. Plus, we truly experience

and universities, including Aquinas, Calvin, Corner-

all four seasons—and the fun sports and outdoor

stone, Grand Valley, Hope, Kendall College of Art &

activities that go along with them.

Design, and GRCC. Most of the major state schools, like the University of Michigan, Michigan State, Western, and Ferris, have campuses in downtown Grand Rapids as well.

35

Each Area is Unique Maybe you’re not so much of a city dweller and would rather live in a more rural or suburban setting. Well,

GR AND R APIDS TOWNSHIP: There’s so much

more to Grand Rapids than just the downtown area.

West Michigan offers that, too. And each “town”

“Something people may not know is that Grand

has its own unique flair and flavor, so there’s a place

Rapids Township taxes really get you a ton of perks.

that feels like home for everyone. Here’s a list of

They do so much for their citizens,” Katie says.

some of Katie’s favorites:

ADA: With a brand-new downtown full of boutiques,

THE L AKESHORE: Grand Rapids is also an easy

drive to-and-from the lakeshore. Beachy towns like

salons, and restaurants, and a hotel that’s going up,

Holland, Saugatuck, and Grand Haven are typically

there’s a lot of investment being made in Ada.

less than an hour away.

E AST GR AND R APIDS: A great school system,

beautiful homes, and a lovely little downtown that’s just full of amazing opportunities. Nestled next to the beautiful Reeds Lake, what’s not to love?

DOWNTOWN ADA (ABOVE)

EAST GR AND R APIDS (RIGHT)

36

We’re Givers Did you know that Grand Rapids is ranked 13th in the nation for philanthropy? “It’s the quiet money and people who give from their heart that makes West Michigan what it is today,” Katie notes. “These generous donors have a true vision of what they want their legacy to be. They have truly made Grand Rapids great.”

Even in the names of the buildings, like Fry, Van Andel, DeVos, and Meijer, you’ll see giving on display.

We also have a booming medical community bringing in some of the brightest minds in medicine, including the new BAMF Center for mental health research, founded by Doug Meijer.

Even with rising interest rates, Katie believes it’s a good time to buy in West Michigan. “My advice?”

“My advice? I’d get my

igan real estate as possible.”

hands on as much

“It’s all about perspective,” Katie says. “When I

West Michigan real

Katie asks, “I’d get my hands on as much West Mich-

started selling homes in the ‘80s, interest rates were 20% or higher. Construction loans were astronomical. I never thought I’d see anything lower than double digits in my career.”

estate as possible.”

“There’s no bubble like there was in 2008. Nothing’s going to burst. The market is just shifting… And that’s what markets do. If you’re going to buy high, you’ll sell high. But if you’re going buy low, you’re going to sell low. It’s all about your mindset.”

“But I can’t imagine living anywhere else,” Katie says with a big smile. “I love it here.”

37

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our mortgage specialists Wade Monsma

39

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