The Trump administration’s threats to cut higher education funding are creating a ripple effect on for-sale housing in the college town of Ann Arbor, Michigan.
The home of the University of Michigan has experienced a slowdown in real estate activity this year, according to local agents. There have been lulls in high-priced listings and pullbacks on purchasing, as the university and associated hospital workforce remain uncertain about job security, even if positions aren’t necessarily on the chopping block.
“I don’t think there’s any question that the University of Michigan is the gravity well that warps the real estate market here in Ann Arbor,” said agent Todd Waller with @properties Christie’s International Real Estate. “It has such a background churn of staff, graduate students and faculty coming in and out of the area that automatically you have price points in the city of Ann Arbor that tend to be higher, and properties tend to turn over more frequently.”
The University of Michigan is the largest employer in Washtenaw County with about 37,000 employees, according to the city of Ann Arbor.
In August, Washtenaw County saw a nearly 20% annual decline in pending sales, according to the Greater Metropolitan Association of Realtors. Digging deeper into Ann Arbor, home prices dropped by 1% in August, according to Homes.com data, at a median sale price of $495,000 in the past 12 months.
New single-family listings were 22.4% higher in August than one year ago, reaching 339, according to GMAR. The time on market remains steady from August 2024 at 28 days.
According to Homes.com data, there are about 450 listings in Ann Arbor as of Friday, with 311, or 69%, on the market for more than one month.
Buyer’s market conditions
The rising home prices also work against the current buyer pool that consists of fewer high earners from the university, according to agents.
Meanwhile, activity for homes below $500,000 remains hot, said Waller, though that inventory is slim. Homes at higher price points have sat unusually this year after President Donald Trump signed a flurry of executive orders targeting U.S. universities following his second inauguration.
At 2010 Devonshire Road, the $1.9 million home has undergone several price reductions and is now listed for less than in 2021. Agent Stephanie Flood of Howard Hanna previously told Homes.com that the market for homes at that price point is “attached to the university” and “people involved in research are kind of holding off right now.”
Trump's executive orders have targeted diversity, equity and inclusion practices, accreditation systems, admissions transparency and international students. In separate moves, Trump has threatened or revoked funds due to protests on campuses, as was the case for Harvard University that saw its federal research grants suspended until a judge overturned that decision in September. Columbia University and Northwestern University reportedly have had grant funding frozen for their medical research.
In Ann Arbor, agents, as a result, saw faculty moving out of town to chase higher salaries at universities with better-funded programs. Meanwhile, new residents decided not to buy.
“Over the last few years, the interest rates were so low that even if you were going to be here for three to four years for your residency or fellowship, people were leaning toward buying. … This year I’ve seen a trend into renting until they know they’ll stay longer than that residency,” said agent Erin Galinac of Real Broker, who added that anything priced more than $800,000 is sitting “much longer” than anything listed around the median price.
This is acting almost like a stabilization for the market, with both Galinac and Waller noticing a shift toward traditional seasonality and a buyer’s market, something not seen since the onset of the pandemic.
Galinac continues to educate sellers today on expecting fewer showings, realistic pricing and longer time on market.
“The sellers still think it's their market and they want the top price and want it fast, and that’s just not reality,” she said.