Realtors who were smiling over the local market performance in January were left shaking their heads once February had wrapped up, after the bloom came off the rose for the New Year gains, and immediately turned south.
While the housing market in Michigan’s Great Southwest in January brought a nice change of pace to the marketplace, February of 2024 wiped out all of those sales gains, and closed with 6-percent lower sales compared to February of 2023 while January of 2024 had just posted an identical 6-percent gain in sales. If there was a silver lining to the report just released in our exclusive early preview of the housing market, it comes in the form of selling prices which rose to record levels for prices in a February time frame.
Southwestern Michigan Association of Realtors Executive Alan Jeffries tells us, “The number of houses sold in February dropped by 6-percent from February of 2023, with a total of 148 homes sold as compared to the 158 sold a year earlier,” and adds, “The level of sales in February of 2024 was the lowest since February of 2011.”
Jeffries reports that for the first two months of this year, the market — with the gain in January sales — held to within one house from 2023, with 308 sold as compared to 309 a year ago. The highest number of sales in any recent February was 471 homes sold back in 2021.
To exacerbate the matter, Jeffries says, “The inventory of houses for sale decreased by 4-percent, providing a 3.7-month supply at the end of February. That represents 590 homes in current inventory as compared to 613 at this time last year.” Jeffries adds, “This level still needs to be higher for buyers searching listings for sale across Allegan, Berrien, Cass, and the westerly two-thirds of Van Buren Counties.” By way of comparison, in February of 2010, there were 2,969 houses for sale.
Last month, (February of 2024), the average selling price was $340,148 as compared to $267,416 in February of 2023, a 27-percent surge. Year-to-date, the average selling price increased 16-percent for an average of $327,911 as compared to $283,109 a year ago.
Overall, the median selling price in February of 2024 increased by $1,100 to $236,000 from the median of $225,000 logged in February of 2023. Year-to-date, the median selling price has now risen by 14-percent to $244,500 from the level of $215,000 witnessed in February of 2023. The median price is the price at which 50-percent of the homes sold were above that price and 50-percent were below.
The combination of lower sales but higher selling volume raised the total dollar volume by 19-percent in February of 2024 to $50,341,911 as compared to last year’s February figure of $42,251,729. The year-to-date total dollar volume grew by 15-percent to $100,996,656 as compared to the total of $87,480,386 established a year ago.
The number of bank-owned or foreclosed homes as a percentage of all transactions was 6-percent last month (9 houses), which matches the January percentage. The previous low percentage was 2-percent in February of 2023, and the highest percentage in a month of February was the whopping 75-percent mark set in 2009.
The Freddie Mac mortgage rate in February was 6.94, up from 6.63 in January for a 30-year conventional mortgage. A year ago, that rate was 6.50.
Jeffries reports that this data reflects home sales across Allegan, Berrien, Cass, and the westerly two-thirds of Van Buren Counties and should not be used to determine the market value of any individual property. He says, “If you want to know the market value of your property, please contact your local Realtor.”
As is his custom, Jeffries also provides advice to those buying or selling a home, as follows:
When Selling Your House…
If you are considering a remodeling project take a minute to discuss your plan with a Realtor to know if the project might cause a problem when you are ready to sell your home. A project that might appeal to you, like a swimming pool, may be a turn-off to potential buyers. Your Realtor may also have advice on which types of renovation projects would add value to your home in terms of resale. You should also look at the National Association of Realtor’s Remodeling Impact Report to see what the average cost of a particular project is, and compare those costs to bids from contractors. The goal of a remodeling project should be to make the home more enjoyable for you and appealing to potential buyers.
When Buying a Home…
It’s tax time, and you should know that one of the key benefits of home ownership is being able to deduct some of the costs of owning a home. One of the major costs is the mortgage interest you pay each month. In the early years of your mortgage, the interest amount can be the largest portion of your mortgage payment. Deducting the total interest amount for the year may make a huge difference in the amount you pay in taxes. If you just bought a house, you could also deduct the points you paid to get the mortgage, helping to reduce your tax bill even more. Property taxes are deductible on a primary residence and a vacation home. Also deductible is the interest you paid on a home equity loan. Call your Realtor to get details about how purchasing a home now can save you money on next year’s tax bill and other benefits of home ownership.
To view properties that are for sale in the local area, you are invited to go to www.swmar.com and click on “Search.” The Southwestern Michigan Association of Realtors, Inc. is a professional trade association for real estate professionals who are members of the National Association of Realtors and ancillary service providers for the real estate industry in Allegan, Berrien, Cass, and Van Buren Counties. The Association can be contacted at 269-983-6375 or through their website at this link: http://www.swmar.com.
