The local housing market in Michigan’s Great Southwest is rapidly becoming a broken record, and not the kind wherein records are being broken any longer. Rather, the market’s ongoing fall-off is becoming a broken record of lagging sales month after month throughout all of 2022.
Southwestern Michigan Association of Realtors Executive Alan Jeffries says that the local market’s performance in August, “continued the same story every every month in 2022 has experienced, bringing the peak selling years to a halt.”
Jeffries tells us, “August sales were down from the same month in 2021, while the number of houses available for sale has continued to drop to below 1,000 each month, which is extremely low for nearly a three-county sales area.” Nevertheless, Jeffries notes, “The reduced inventory of houses for sale has brought record selling prices each month this year, with the exception of January and April in our year-over-year comparisons.” Further adding to the battle, Jeffries reports that the mortgage rate is now above 5-percent locally.
In August, the Southwest Michigan housing market saw the number of houses sold fall to 340 from the 363 sold a year ago in August of 2021, marking a 6-percent drop in sales. As a result, year-to-date sales are now down 12-percent from 2021, with 2,185 homes sold so far this year, as compared to 2,495 a year ago at this time.
Despite the reduced number of homes sold, and the ever-wavering inventory levels, both the average and median selling prices in August and the year-to-date selling prices managed once again to set records in the year-over-year comparison, which dates back to 2006.
The average selling price in August rose 16-percent from prices established in August of 2021, with the average price clocking in at $356,179 now, as compared to $307,860 a year ago. Additionally, the year-to-date average selling price of $335,462 trends 5-percent higher than the $319,151 price of a year ago in August of 2021.
Meanwhile, the median selling price increased 8-percent to $248,750 from $230,000 set in August of 2021.
Year-to-date, the median selling price has risen 9-percent to $245,000 as compared to $225,000 a year ago.
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 in August rose by 8-percent to $121,100,896.00 as compared to a total dollar volume of $111,753,405.00 a year ago. However, with fewer houses sold each month, the year-to-date total dollar volume at the end of August 2022 has now fallen by 8-percent to $732,985,567.00 as compared to the same date a year ago when they checked in at $796,283,722.00.
Of ever-increasing concern to the housing industry, the inventory of houses for sale once again dropped by 7-percent last month when compared to August of 2021, with just 884 homes on the market now, versus the 952 a year ago. Despite that drop, with fewer houses selling, the inventory of houses for sale actually increased to a 4.0-months supply of inventory available for buyers, up from the 3.9-months supply a month earlier in July of 2022. By way of comparison, a dozen years ago in August of 2010, there were 3,757 houses for sale and a dramatically larger 17.8-months supply of inventory.
The number of bank-owned or foreclosed homes as a percentage of all transactions stayed at 1-percent in August, the same as in July, June, May, and April. In January, the rate was actually zero-percent, the lowest in all of 2022. The previous lowest percentage in a month of August was 1-percent a year ago in 2021. The highest percentage on record in a month of August was 36-percent back in 2009.
The Freddie Mac mortgage rate in August was 5.5, up from 5.30 in July for a 30-year conventional mortgage. A year ago, that rate was 2.87.
The data reported by Jeffries in his accounting, reflects home sales across Allegan, Berrien, Cass, and the westerly 2/3rds of Van Buren Counties and, as he always cautions, “should not be used to determine the market value of any individual property,” adding, “If you want to know the market value of your property, please contact your local Realtor.”
Jeffries also offers tips for both buyers and sellers in the current market:
When Selling a Home…
This is the time of the year you want to keep your home looking good and add to the curb appeal. Here are some handy tips.
#1 Take Advantage of End-of-Season Sales
When back-to-school season strikes, retailers are ready to move on from summer, and they offer deep discounts to clear out outdoor wares, such as rakes, shovels, fertilizer, and other yard supplies. Save by stocking up for next spring now.
#2 Prepare Lawn for Fall Seeding
If you plan to seed your lawn this fall, get ready by filling in any low spots, removing weeds, and ordering the specific grass seed you need. That’ll commit you to reseed, which you’ll thank yourself for this time next year. Besides killing your curb appeal, those low, bare spots in your lawn tend to create puddles — perfect breeding grounds for mosquitoes.
#3 Install a Patio
If your August is hot and the summer rains have slowed, it’s prime time to install a patio, a terrific value-adding feature. These conditions make it easier to keep pavers level and speed up the drying time for concrete.
When Buying a Home…
Do you qualify for a First-Time Home Buyer Program?
First-time home buyer programs can help you get into a home for far less cash. That way, you can purchase a home sooner and begin building equity. Down payment assistance programs can help offset the fees and mortgage insurance that come with FHA loans. So, you can lower your total costs and, in some cases, your monthly payments. You’ll have a cash cushion if you don’t have to wipe out your savings for the down payment,. That’ll come in handy for inevitable maintenance and repair expenses.
Start by talking to a local mortgage broker. They’re familiar with the programs most likely to benefit you, including less-publicized ones. Here are other sources of information.
Housing counselors, whose services are free(!), can discuss which mortgage options are best for you. The counselors and other resources are available through:
- NeighborWorks America. http://NeighborWorks.org Find housing counselors approved by the U.S. Department of Housing and Urban Development and listed by state. Or contact your state’s housing finance agency.
- Down Payment Resource. http://DownpaymentResource.com Check your eligibility for a host of down payment assistance programs. In addition, you can take a short quiz to help you find out which home buyer programs you may qualify.
- Realtors. These professionals are well connected in the finance area and willing to share what they know and their contacts.
People often turn first to national first-time home buyer programs. Here are some well-known options:
- FHA. http://HUD.GOV Helps first-time buyers — especially those with lower credit scores — buy with down payments as low as 3.5%.
- USDA Rural Development Loans. http://RD.USDA.GOV For low- to middle-income families buying homes in towns with populations of 10,000 or fewer people or that are “rural in character.” Some areas with bigger populations have been grandfathered into the program (zero down payment).
- VA Home Loans. http://Benefits.VA.Gov Helps service members, veterans, and eligible surviving spouses (zero down payment).
- Fannie Mae http://SingleFamily.FannieMae.com and Freddie Mac http://FreddieMac.com are federal entities that set the rules for mortgages nationwide. They offer programs allowing eligible buyers to put down as little as 3% of the purchase price (low down payment).
To view properties for sale in the local area, 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:
