Michigan Home Selling

Michigan's housing market remains relatively affordable compared to its neighbors and the national median. The median sale price in the state stood at approximately $285,000 in September 2025, slightly above neighboring Ohio (around $261,000) and Indiana ( $276,000) but significantly lower than Wisconsin ($337,800). Across the U.S., the median sale price was roughly $435,000 during the same period.

On average, around 11,000 homes are sold each month in Michigan, reflecting an annual increase of around 4%. Homes in Michigan generally sell in around 40 days, considerably faster than the national median of roughly 60 days.

Michigan issues around 2.2 new residential building permits per 1,000 residents, a figure that's on par with neighboring states, but that lags behind national leaders in construction activity. This moderate pace contributes to a housing market with limited inventory and strong buyer competition, particularly in high-demand metro areas.

The average property tax rate in Michigan is 1.28%, ranking it among the more expensive states, but offering some cost-of-ownership appeal relative to Midwestern neighbors like Ohio (1.36%) and Illinois (2.07%).

After a 28% year-over-year increase in foreclosure filings, Michigan's foreclosure rate ( 1 in every 4,220 housing units) in September 2025 was slightly lower than the national rate (1 in 3,997). The jump in foreclosures throughout the state signals that some owners are facing more financial stress, likely due to higher mortgage rates and a tougher labor market.

The Michigan real estate market is dynamic, offering varying returns to investors, developers, and sellers. Some of the factors affecting the degree of returns on real estate investments in the state include the area's historic charm, tourism opportunities, jobs growth, population trends, housing shortages, municipal incentives, and local zoning regulations.

The following areas in Michigan tend to offer above-average returns for property investments:

• Grand Rapids: This city consistently ranks high for return on investment (ROI) due to its booming local economy, strong job market, and growing population. High demand and limited inventory contribute to continued price appreciation.
• Ann Arbor: Home to the University of Michigan, Ann Arbor combines stable rental demand, a strong academic and tech-driven economy, and high property values supported by a limited housing supply.
• Detroit (Downtown and Midtown): While once in decline, Detroit's central neighborhoods are experiencing a revival through urban renewal projects, historic preservation, and rising demand for affordable city living.
• Traverse City: With its scenic beauty, tourism appeal, and thriving short-term rental market, this northern Michigan destination offers seasonal and long-term ROI, particularly for vacation homes and boutique developments.
• East Lansing: Anchored by Michigan State University, the area sees steady rental income opportunities and long-term appreciation thanks to constant student and faculty housing needs.
• Royal Oak: A trendy, walkable Detroit suburb with ample entertainment and nightlife, Royal Oak attracts young professionals and downsizers, driving demand for mid-density residential units.
• Kalamazoo: Known for its affordability and educational institutions, Kalamazoo offers investors a strong return through low entry costs, consistent demand, and revitalization efforts in the downtown area.
• Novi: Located in the Detroit metro area, Novi stands out for its upscale neighborhoods, highly-rated schools, and steady new construction activity supported by favorable zoning and planning policies.
• Ypsilanti: Positioned near Ann Arbor and featuring lower property costs, Ypsilanti has seen growing interest from investors looking for value appreciation tied to spillover demand from its more expensive neighbor.
• Holland: This West Michigan town blends historical charm with a strong manufacturing base and tourism industry. Its waterfront properties and revitalized downtown make it appealing for both buyers and developers.

The pace of home sales in Michigan varies across regions, but overall, homes in the state tend to sell fairly quickly relative to the national median. The median days on market (DOM) statewide is around 40 days, though quicker sales are common in high-demand metros like Grand Rapids and Ann Arbor, where desirable listings often sign offers within just 10 to 20 days of being listed.

While market conditions like mortgage rates and inventory levels affect how quickly homes sell, certain property characteristics consistently contribute to faster closings across Michigan. Buyers respond strongly to homes that balance size, style, and modern features with practical utility and visual appeal.

To maximize ROI in Michigan's residential real estate market, home sellers and developers must familiarize themselves with local zoning laws, permitting processes, and regulatory requirements. These rules may significantly affect a property's current market value, future development potential, and the ability to complete a smooth transaction. Noncompliance with state or local laws may result in delays, penalties, or legal challenges during or after the sale.

One way to help reduce the risk of legal issues is to obtain or provide a zoning compliance letter, especially in cities with more complex regulatory frameworks. Buyers — particularly those who intend to remodel, add units, or use the property as a rental — frequently request this document to confirm the structure and use conform to local zoning codes, and that no open violations exist.

In Michigan, zoning ordinances are handled primarily at the city, township, or county level, meaning requirements and enforcement can vary significantly from one locality to another. Each municipality typically adopts its own zoning map and code, which outlines permitted uses, dimensional standards, and procedures for variances or special use permits.

• Strict Zoning Laws: Some of the most strictly enforced zoning regulations in Michigan exist in cities like Ann Arbor, Royal Oak, Birmingham, and Bloomfield Township, where zoning is used to preserve neighborhood character, protect home values, and regulate density. For example, Ann Arbor's zoning code dictates everything from permitted building height to green space ratios in residential areas.
• Less Bureaucratic Zoning Laws: In contrast, many rural areas and townships, such as parts of Alcona, Oscoda, and Huron counties, have more relaxed or minimal zoning laws. Some of these jurisdictions may allow multiple uses on a single lot or permit development with fewer restrictions, though site plan approval and health permits may still be required.
• Special Permits and Hearings: In most Michigan cities, any deviation from base zoning requirements, such as building a duplex in an area that's zoned single-family or adding an accessory dwelling unit (ADU), requires a special land-use permit or zoning variance, often involving a public hearing and approval from a zoning board of appeals. Cities like Lansing and Grand Rapids routinely process such applications, particularly for infill housing and redevelopment projects.

• Need for a Certificate of Occupancy Before Occupation: Several Michigan cities require a Certificate of Occupancy (CO) before a home can legally be occupied, sold, or rented:

  • Detroit: A CO is mandatory after any construction, renovation, or change in property use.
  • Sterling Heights: A CO is needed following renovations or before reoccupying a property, especially rentals, to confirm code compliance.
  • Southfield: No CO is issued until all final inspections, such as structural, electrical, plumbing, and mechanical, are passed, ensuring the residence is safe and legally approved.
• Need to Obtain Approval From a Historic Commission: For properties located within designated historic districts, such as parts of Detroit, Traverse City, or Marshall, any exterior alterations may need prior approval from a historic district commission. Changes involving windows, siding, roofing materials, or building additions must be reviewed to ensure compatibility with the historic character of the area.

Regulations in Michigan's real estate landscape vary depending on the location. Some jurisdictions are known for being development friendly with pro-growth policies and flexible zoning, while others impose tighter controls, slower approval timelines, and stronger community resistance to change. For home sellers and real estate developers, complying with local regulations is essential for avoiding costly delays, fines, or legal disputes.

Beyond legality, regulatory compliance plays a direct role in a property's marketability and value, especially when it comes to resale, redevelopment, or new construction.

Development-Friendly Areas

Cities and towns in this category tend to offer streamlined permitting processes, greater zoning flexibility, and strong local government support for both residential and mixed-use development.

• Grand Rapids (Kent County): Known for its business-friendly government and ongoing urban revitalization, Grand Rapids actively encourages infill housing, ADUs, and mixed-use zoning through updated master plans and quick permit turnaround times.
• Kalamazoo (Kalamazoo County): Through various incentive programs and a simplified planning process, Kalamazoo supports affordable housing and adaptive reuse projects, particularly downtown and in redevelopment zones.
• Lansing (Ingham County): The city promotes urban housing, especially near transit corridors, and often expedites permit reviews for multiunit developments or downtown renovations.

Moderately Regulated Areas

These jurisdictions enforce zoning codes and development standards with some level of oversight, but remain generally cooperative toward responsible development.

• Novi (Oakland County): While zoning in Novi is detailed, the city works closely with developers and homeowners through pre-application meetings and predictable review schedules. It balances growth with planning consistency.
• East Lansing (Ingham County): Home to Michigan State University, the city has moderate regulatory oversight, especially in student housing zones. However, development is still possible with careful adherence to use restrictions and density caps.
• Portage (Kalamazoo County): Though well organized and moderately strict, Portage maintains transparency in its permitting system and supports residential expansion in alignment with its land-use plan.

Highly Restrictive or Bureaucratic Areas

In these locations, developers and sellers often face extended timelines, strong community opposition to new construction, and tight zoning that limits flexibility.

• Ann Arbor (Washtenaw County): While a desirable market, Ann Arbor enforces strict land use controls and environmental overlays, often limiting high-density or multifamily developments. Public pushback and appeals are common during zoning hearings.
• Birmingham (Oakland County): The city's historic charm is protected by detailed zoning codes, strict architectural standards, and complex site plan requirements, making it difficult for large or modern developments to pass through quickly.
• Bloomfield Township (Oakland County): Bloomfield applies rigorous zoning rules that limit density and impose high setback and lot-size standards. Changes often require multiple board approvals and neighborhood consultations.

Regulatory Climate Factors to Watch

In Michigan, the regulatory climate varies significantly from one municipality to another, and this variation plays a crucial role in determining how easy or otherwise it is to develop, renovate, or flip a property. While some cities embrace flexible land use and streamlined approvals, others impose stricter controls that may delay projects, increase costs, or limit design options.

The following table highlights key regulatory factors, their impact on property development, and examples of where they're commonly encountered within Michigan:

*NIMBYism - Not in My Backyard

With market conditions differing between metro areas like Detroit and Grand Rapids and smaller towns like Traverse City or Monroe, successful flippers often require effective strategies to maximize returns. Some of the most common flipping and resale strategies used to generate a higher ROI in the Michigan housing market include the following:

Pricing a home correctly is one of the most important decisions a seller will make in Michigan's competitive and regionally diverse real estate market. The right pricing strategy can determine how fast a property sells, whether it attracts multiple offers, and how much leverage the seller has during negotiations. To maximize value, sellers should strongly consider working with a licensed local agent or appraiser to analyze comparable sales — including active, pending, and recently sold properties — within the past 90 days.

Across Michigan, sellers and investors adopt various pricing techniques depending on the property type, local trends, and buyer expectations. Below are the most commonly used pricing strategies in key markets across the state:

As a guide toward the most effective approach to attract buyers, sellers should consider the following strategies based on prevailing market conditions in the local market:

Certain factors play a critical role in shaping the trends of Michigan's real estate market, especially at the local level, where conditions for demand and supply may differ widely across cities, towns, and regions. These factors not only influence the overall direction of the housing market in the state but also define the unique characteristics of local property markets throughout Michigan.

Economic Factors

Michigan's economy continues to experience modest growth driven by increases in wages and personal income across various employment sectors. A growing number of households are gaining buying power, which has supported home prices, especially in mid-sized metros. Construction activity remains relatively stable, though demand continues to outpace new housing development in many areas. As a result, inventory remains tight in cities with job concentration and population pressure, such as Ann Arbor and Grand Rapids. Housing starts are expected to steadily rise, contributing to gradual supply relief.

Demographic and Social Factors

Population trends in Michigan are mixed. While the total population remains stable, slow out-migration continues to strain growth. There is a growing imbalance between supply and demand, with a statewide housing shortage estimated at 190,000 units by Michigan State Housing Development Authority (MSHDA). In response, an aging demographic, particularly in rural and mid-sized towns, drives demand for more age-in-place and accessible homes. Additionally, rising preferences for suburban walkability, short-term rental use — such as in Onekama — and other cultural shifts are influencing local housing trends.

Regulatory and Legal Framework

Zoning and land-use policies are diverse.With Michigan's statewide ban on local rent control laws, landlords can raise rents at their discretion (with a minimum 30 days' notice). Meanwhile, Redevelopment Ready Communities likeBenzonia are streamlining zoning to encourage growth through flexible ADUs, tiny homes, and multifamily units. However, wetlands overlay zones and historic district controls often limit buildable land and impact property modifications. Additionally, Act 425 agreements between cities and townships shape revenue sharing and development incentives across municipal borders.

Taxation and Fiscal Policy

Local property taxes play a critical role in shaping real estate behavior across Michigan. In cities like Detroit, high millage rates have prompted renewed policy debates and reform proposals aimed at easing the tax burden for homeowners. Meanwhile, state-level tax policies that reduce income and retirement tax liabilities have increased household disposable income and home purchasing capacity. Programs such as tax credits and exemptions for first-time buyers and developers further encourage homeownership and investment in underbuilt areas.

Housing Policy and Government Programs

Michigan is facing a housing shortfall, and government initiatives are responding. The MSHDA state housing plan aims to close the 190,000-unit gap, focusing on affordable rental and senior housing. Local efforts, such as in Manistee County, are also developing master plans to increase affordable housing, infill, and protections for wetlands and shorelines.

Infrastructure and Development Trends

Significant infrastructure investments, such as Governor Whitmer's "rebuild" programs for roads and bridges, enhance regional connectivity and make commuting more feasible, increasing suburban and exurban appeal. In Detroit, brownfield redevelopments, utility upgrades, and neighborhood revitalization efforts are supporting new residential and mixed-use development.

Market Sentiment and Investor Behavior

Investor sentiment remains cautiously optimistic. Growth in rental demand and the shortage in housing supply have attracted flippers and long-term investors who are pursuing strategies like BRRRR, condo conversions, and wholetailing. Meanwhile, efforts to introduce rent control and increased investor scrutiny indicate shifting policy priorities and market pressures.

Michigan's real estate market presents strong opportunities for sellers and investors, especially in cities like Grand Rapids, Ann Arbor, Detroit, and Traverse City. These areas typically offer high returns due to factors such as jobs growth, housing shortages, and revitalization projects. Note that mid-sized homes with three to four bedrooms and modern upgrades tend to sell the fastest, particularly in suburban markets near major metros.

To succeed in the Michigan property market, sellers must understand local zoning laws, permit requirements, and regulatory conditions. Development-friendly cities like Grand Rapids and Kalamazoo offer streamlined processes, while areas like Ann Arbor and Bloomfield Township enforce stricter rules. Navigating these differences is crucial for maximizing property value and avoiding delays.

Investors in Michigan's housing market often employ strategies such as targeting distressed homes, applying the 70% Rule, wholetailing, and BRRRR method in local markets with strong rental demand. Effective pricing methods, like just-below-threshold pricing or appraisal-backed pricing, can help attract more buyers and close deals faster. As always, it's important to recognize the role of broader trends, such as the economy, demographic shifts, and housing policy initiatives, which continue to shape Michigan's market at both local and state levels.