After a brief rise in February, the local housing market in Michigan's Great Southwest returned to a more recent trend of fewer houses sold, but at higher prices overall. That's the snapshot provided in the latest update from the Southwestern Michigan Association of Realtors, Inc.
Association Executive Alan Jeffries says, “From February to March this year the number of houses sold differed by one house with 235 in February and 234 in March." However, he makes note of the fact that, "The real difference was that the average selling price increased 9-percent to $217,265 vs. the previous month's average of $199,433 and a median selling price increase of 25-percent to $175,000 vs. the previous median of $140,000.”
Jeffries says, “Comparing year-over-year sales, March 2019 was down 6-percent from March 2018 (234 vs. 248 houses sold)." However, thanks to strong sales in February, at the end of the first quarter of 2019 the number of houses sold was up by 4-percent (644 vs. 622).
The low inventory of houses for sale continues to exacerbate the market's tightness across the Tri-County area of Berrien, Cass and the westerly 2/3 of Van Buren counties. If there's a bright spot in that story, the inventory at the end of March 2019 dropped just 4-percent from a year ago (1,341 vs. 1,391). By comparison, the decline in houses for sale from March 2016 to March 2018 dropped double digits each year bringing the inventory down from 1991 houses in March 2016 to 1,391 in March 2018. In March of 2010, there were 3,218 houses for sale. At the end of March 2019, there was 5.2-months supply of houses for sale; up from 4.5 a year ago.
Looking at year-over-year prices, the average selling price in March 2019 at $217,265 was down 2-percent from the average selling price, $221,065, a year earlier in March 2018. Year-to-date, the average selling price also was down 2-percent ($205,823 vs. $210,965).
The median selling price in March 2019 jumped 11-percent to $175,000 from $157,725 in March 2018. Year-to-date, the median selling price varied by just $500 ($146,500 vs. $146,000). Both the monthly and year-to-date median selling prices were the highest when compared to results in March in the year-over-year comparison back to 2006.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
The total dollar volume was pushed down 7-percent by fewer home sales in March 2019 compared to March 2018 ($50,840,184 vs. $54,824,314). There was a 1-percent difference in the year-to-date total dollar volume ($132,550,612 vs. 131,220,518). The year-to-date total dollar volume set a record to become the highest set in the year-over-year comparison.
The number of bank-owned or foreclosed homes as a percentage of all transactions increased from 6-percent in February to 8-percent in March. The previous lowest percentage in March was 7-percent just last year. The highest percentage in March was 60-percent a decade ago in 2009.
Locally, the mortgage rate decreased slightly to 4.475 from 4.573-percent in February. Last year in March, the rate was 4.577. Nationally, the Freddie Mac mortgage rate in March was 4.06 down from 4.35 in February for a 30-year conventional mortgage.
According to the National Association of Realtors existing-home sales retreated in March on a national scale, following February’s surge of sales. Each of the four major U.S. regions saw a drop-off in sales, with the Midwest enduring the largest decline last month.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums, and co-ops, fell 4.9-percent from February to a seasonally adjusted annual rate of 5.21 million in March. Sales as a whole are down 5.4-percent from a year ago (5.51 million in March 2018).
Lawrence Yun is Chief Economist for the National Association of Realtors. He anticipated waning in the numbers for March, saying, “It is not surprising to see a retreat after a powerful surge in sales in the prior month. Still, current sales activity is under-performing in relation to the strength in the job markets. The impact of lower mortgage rates has not yet been fully realized.”
The median existing-home price for all housing types in March was $259,400, up 3.8-percent from March 2018 ($249,800). March’s price increase marks the 85th straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest declined 7.9-percent from last month to an annual rate of 1.17 million, 8.6-percent below March 2018 levels. The median price in the Midwest was $200,500, which is up 4.6-percent from last year.
First-time buyers were 33-percent of sales in March, up from last month and a year ago (32-percent and 30-percent). The National Association of Realtors 2018 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 33-percent.
All-cash sales accounted for 21-percent of transactions in March, down from February’s 23-percent, but up from a year ago (20-percent). Individual investors, who account for many cash sales, purchased 18-percent of homes in March, up from February’s 16-percent, and up from a year ago (16-percent).
Nationally, the total housing inventory at the end of March increased to 1.68 million, up from 1.63 million existing homes available for sale in February and a 2.4-percent increase from 1.64 million a year ago. Unsold inventory is at a 3.9-month supply at the current sales pace, up from 3.6 months in February and up from 3.6 months in March 2018.
Yun suggests, “Further increases in inventory are highly desirable to keep home prices in check,” adding, “The sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth.”
Yun says tax policy changes will likely add further complications to the housing sector, noting, “The lower-end market is hot while the upper-end market is not. The expensive home market will experience challenges due to the curtailment of tax deductions of mortgage interest payments and property taxes.”
John Smaby, a second-generation Realtor from Edina, Minnesota and Broker at Edina Realty serves a President of the National Association of Realtors. He says, “We had been calling for additional inventory, so I am pleased to see that there has been a modest increase on that front,” and adds, “We’re also seeing very favorable mortgage rates, so now would be a great time for those buyers who may have been waiting to make a purchase.”
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, you should contact your local Realtor.
The Southwestern Michigan Association of Realtors, Inc. is a professional trade association for real estate licensees who are members of the National Association of Realtors and ancillary service providers for the real estate industry in Berrien, Cass and Van Buren Counties. The Association can be contacted at 269-983-6375 or through their website at www.swmar.com.