3662666

Record Home Sales Again in SWM

3662666

If you run into a Realtor any time soon, you’re likely to see a pretty happy camper so long as he or she is getting some of the record setting action that has now racked up in at least five of the first nine months of the year. 2016 is turning out to be truly one for the record books, and that is certainly pleasing to the soon-to-be-retired head of the local Realtors association.

Gary Walter is Executive Vice President of the Southwestern Michigan Association of Realtors, and he says “September sales and selling prices gave us five months in 2016 of record breaking numbers. When we compare the number of houses sold and selling prices in the month of September back to our peak year in 2006, this September had the highest number of houses sold, total dollar volume and median selling price.” In fact, Walter tells us, “Only the average selling price in September fell short. All of the year-to-date numbers were higher than in any previous year.”

The association chief says that In September, 367 houses were sold which was a 14-percent increase over September 2015 when 323 houses were sold. Year-to-date, there was an 8-percent increase in the number of houses sold (2,681 vs. 2,481).

With the 14-percent increase in the number of houses sold at a16-percent higher average selling price, the total dollar volume in September soared 32-percent ($76,708,296 vs. $58,313,055). Year-to-date, the total dollar volume was up 13-percent over 2015 ($537,080,230 vs. $475,537,836).

ADVERTISEMENT
Your content continues below

In September, the average selling price jumped 16-percent to $209,014 from $180,535 in September 2015. Year-to-date, the average selling price increased 5-percent from a year ago ($200,328 vs. $191,672).

The median selling price in September increased 3-percent to $143,500 from $139,000 in September 2015. Year-to-date, the median selling price was up 3-percent ($140,000 vs. $136,450).

The median price is the price at which 50% of the homes sold were above that price and 50% were below.

At the end of September there were 2,185 houses on the market. At this number the inventory had 7.5-months supply of homes for buyers. In September 2015, there was 9.3-months supply of houses for sale (2,525 total homes on the market).

The number of bank-owned or foreclosed homes as a percentage of all transactions in our market increased slightly to 12-percent from 10-percent in August. Since April the percentage has ranged from 9-12-percent.  The percentage peak this year was 20-percent in March. The highest percentage on record, in February 2009, was 75-percent.

Locally, the mortgage rate was 3.54, down slightly from 3.56 in August. In September 2015, the rate was 4.10. Nationally, the Freddie Mac mortgage rate in September was 3.46 compared to 3.43 in August 2016.

According to the National Association of Realtors existing-home sales rebounded strongly in September and were propelled by sales from first-time buyers reaching a 34-percent share, which is a high not seen in over four years. All major regions saw an increase in closings last month, and distressed sales fell to a new low of 4-percent of the market.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, hiked 3.2-percent to a seasonally adjusted annual rate of 5.47 million in September from a downwardly revised 5.30 million in August. After last month’s gain, sales are at their highest pace since June (5.57 million) and are 0.6-percent above a year ago (5.44 million).

Lawrence Yun is Chief Economist for the National Association of Realtors. He says the two-month slump in existing sales reversed course convincingly in September. As he puts it, “The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of the competition for the minimal amount of homes for sale.”  He adds, “Most families and move-up buyers look to close before the new school year starts. Their diminishing presence from the market towards the end of summer created more opportunities for aspiring first-time homeowners to buy last month.”

The median existing-home price for all housing types in September was $234,200, up 5.6-percent from September 2015 ($221,700). September’s price increase marks the 55th consecutive month of year-over-year gains.

Regionally, existing-home sales in the Midwest sales grew 3.9-percent to an annual rate of 1.32 million in September, and are now 2.3-percent above a year ago. The median price in the Midwest was $184,500, up 5.9-percent from a year ago.

Matching the highest share since July 2012, first-time buyers were 34-percent of sales in September, which is up from 31-percent in August and 29-percent a year ago. First-time buyers represented 30-percent of sales in all of 2015.

Yun says, “There’s hope the leap in sales to first-time buyers can stick through the rest of the year and into next spring. The market fundamentals — primarily consistent job gains and affordable mortgage rates — are there for the steady rise in first-timers needed to finally reverse the decline in the homeownership rate.”

On the topic of first-time buyers, Natiional Association of Realtors President Tom Salomone, who is broker-owner of Real Estate II Inc. in Coral Springs, Florida, said government-sponsored enterprises Fannie Mae and Freddie Mac have a duty to ensure there’s access to mortgage credit for creditworthy borrowers wanting to buy a home.

He says, “Unfortunately, overly burdensome fees at the GSEs are making homeownership difficult for moderate-income buyers. Fannie and Freddie can reduce the cost of borrowing while still protecting taxpayers, and we’re hopeful they’ll take these steps to ensure prospective buyers are able to enter the market.”

All-cash sales were 21-percent of transactions in September, down from 22-percent in August and 24-percent a year ago. Individual investors, who account for many cash sales, purchased 14-percent of homes in September, up from 13-percent both in August and a year ago. Sixty-five percent of investors paid in cash in September.

Nationally, the total housing inventory at the end of September rose 1.5-percent to 2.04 million existing homes available for sale, but is still 6.8-percent lower than a year ago (2.19 million) and has now fallen year-over-year for 16 straight months. Unsold inventory is at a 4.5-month supply at the current sales pace, which is down from 4.6 months in August.

Yun points out that, “Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in.” He concludes, “Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

*