While individual home prices plummeted in February from the previous month, the local housing market in Michigan's Great Southwest continued to race ahead with double digit gains in the number of home sold for the month, at a near record pace. That's the nutshell recap from the head of the Southwestern Michigan Association of Realtors.
Gary Walter is Executive Vice President of the local Realtors group and he says, “The housing market in February continued the positive pace started in January. The number of houses sold increased by double digits while the average and median selling prices held within 2-percent or less when compared to February 2015." He adds, however, "%u200BHomebuyers in February found average and median selling prices that were significantly lower than in January.”
Walter reports that the number of houses sold in February was up 14-percent over February 2015 (194 vs. 170). Sales in February were just 4 houses shy of the record set in February 2006 (198); which is considered to be the peak year for the local market. He says, "With the robust start in January, year-to-date, the number of houses sold were up 21-percent over 2015 (381 vs. 314).”
The total dollar volume for February increased 15-percent; rising from $26,490,724 in 2015 to $30,451,390 in February 2016. Year-to-date, the total dollar volume was up 19-percent ($67,914,134 vs. $56,885,560). The year-to-date, total dollar volume in February set the record in the year over year comparison back to 2006.
The average selling price plunged from $200,335 in January to $156,965 in February. The average selling price in February 2016 increased just less than 1-percent from February 2015 ($155,828). The year-to-date average selling price in February dropped 2-percent from February 2015 ($178,252 vs. $181,164).
The median selling price of $109,950 in February was up 2-percent over $108,000 set in February 2015. This year in January, the median selling price was $134,000 for an 18-percent month-to-month decrease.
Year-to-date, the median selling price saw a 12-percent increase with $117,500 in 2016 versus $105,000 in 2015. Comparing from 2006 to 2016, this year-to-date median selling price was the highest recorded over time. The second highest was set in 2006 at $110,000.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
Walter tells us, "The continued decline to record lows brought the housing inventory to 6.7-months supply in February; up just a sliver from the 6.6-months supply in January. The inventory at the end of February was 1,868 houses for sale compared to 1,926 in February 2015.”
The number of bank-owned or foreclosed homes as a percentage of all transactions in the market dropped to 14-percent in February from 18-percent in January. The percentage in February is the lowest percentage in the month of February since 2009 when we peaked at 75-percent. In February 2015, the percentage was 22-percent. In 2015, the lowest percentage was 9-percent.
Locally, the mortgage rate declined to 3.76 from 3.99-percent in January. Last year in February, the rate was at 3.84. Nationally, the Freddie Mac mortgage rate in February was 3.66-percent compared to 3.87-percent in January for a 30-year conventional mortgage.
According to the National Association of Realtors, after increasing to the highest annual rate in six months, existing-home sales tumbled in February amidst unshakably low supply levels and steadfast price growth in several sections of the country. Led by the Northeast and Midwest, all four major regions experienced sales declines in February.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 7.1-percent to a seasonally adjusted annual rate of 5.08 million in February from 5.47 million in January. Despite last month's large decline, sales are still 2.2-percent higher than a year ago.
Lawrence Yun is Chief Economist for the National Association of Realtors. He says existing sales disappointed in February and failed to keep pace with what had been a strong start to the year. He says, “Sales took a considerable step back in most of the country last month, and especially in the Northeast and Midwest.” He adds, "The lull in contract signings in January from the large East Coast blizzard, along with the slump in the stock market, may have played a role in February's lack of closings. However, the main issue continues to be a supply and affordability problem. Finding the right property at an affordable price is burdening many potential buyers.”
According to Yun, job growth continues to hum along at a robust pace, but there appears to be some uneasiness among households that the economy is losing some steam. This was evident in NAR's latest quarterly HOME survey – released earlier this month – which revealed that fewer respondents believe the economy is improving, and a smaller share of renters said that now is a good time to buy a home.
Yun says, “The overall demand for buying is still solid entering the busy spring season, but home prices and rents outpacing wages and anxiety about the health of the economy are holding back a segment of would-be buyers.”
The median existing-home price for all housing types in February was $210,800, up 4.4-percent from February 2015 ($201,900). February's price increase marks the 48th consecutive month of year-over-year gains.
Regionally, existing-home sales in the Midwest sank 13.8-percent to an annual rate of 1.12 million in February – unchanged from February 2015. The median price in the Midwest was $162,700, up 6.3-percent from a year ago.
The share of first-time buyers fell to 30-percent in February (matching the lowest share since November 2015) from 32-percent in January, but is up from 29-percent a year ago. First-time buyers in all of 2015 represented an average of 30-percent.
All-cash sales were 25-percent of transactions in February, down from 26-percent both in January and a year ago. Individual investors, who account for many cash sales, purchased 18-percent of homes in February (17-percent in January), matching the highest share since April 2014. Sixty-four-percent of investors paid cash in February.
Nationally, the total housing inventory at the end of February increased 3.3-percent to 1.88 million existing homes available for sale, but is still 1.1-percent lower than a year ago (1.90 million). Unsold inventory is at a 4.4-month supply at the current sales pace, up from 4.0 months in January.
Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida is President of the National Association of Reatlros. He says many Realtors are saying instances of multiple bids and affordable homes going under contract quickly are common in their markets. He reports, “With low supply this spring buying season, it's easy for buyers to get discouraged when their offer is rejected in favor of a higher bid." He notes, "That's why it's important for buyers to stay patient and work with a Realtor to develop a negotiation strategy that ensures success without overstretching their budget.”
The numbers reported for local sales include residential property in Berrien, Cass and the westerly 2/3rds of Van Buren counties and should not be used to determine the market value of any individual property. If you want to know the market value of your property, please contact your local Realtor.