The record setting pace of home sales in Michigan’s Great Southwest roared back into the groove in June, but the really good news for buyers was a brief respite from the rapid rise in prices in recent months.
Alan Jeffries, the Association Exec at the Southwestern Michigan Association of Realtors, Inc. says, “As the housing market rolls into peak season, buyers experienced a small reprieve in selling prices. The average selling price in June increased only ½ percent from May 2017 ($225,091 vs. $224,204).” When comparing June 2017 to June 2016, the average selling price only increased $1,220 or, again, ½ percent ($225,091 vs. $223,871).
Jeffries says the one month slowdown in volume in May ended quickly, noting, “The SWMI housing market in June continued to shatter previous records in the year-over-year comparison that dates back to 2006 in all categories except one. The number of houses sold in June 2017 tied the record set in June 2006 at 388 houses sold.”
Those 388 houses sold in June resulted in an 11-percent increase over the 348 houses sold in June 2016, according to Jeffries, who suggests, “This becomes significant when you consider in June 2016, the inventory of houses for sale stood at 2,386 and in June 2017 the inventory was 1,982. So with a 17-percent drop in inventory, 40 more houses were sold.”
From May to June 2017, the inventory of houses available for sale only grew by 26 houses (1,982 vs 1,956). This robust market was operating with an inventory at just 6.5-months supply of houses in May and June.
The total dollar volume for June increased 12-percent over June 2016 ($87,335,485 vs. $77,907,454). Year-to-date, the total dollar volume is up 15-percent through June ($355,292,735 vs. $310,108,424).
The median selling price of $165,250 in June 2017 increased 6-percent over the $156,000 set in June 2016. Year-to-date the median selling price rose 11-percent to $150,000 from $135,000 in 2016.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
Last month, in May, a new record low was set in the number of bank-owned or foreclosed homes as a percentage of all transactions. That was 6-percent. In June the record was lowered to 5-percent. The previous lowest percentage was 8-percent in October 2016. In June 2009, the percentage was 36-percent.
Locally, the mortgage rate dropped slightly to 4.03 from 4.129 percent in May. Last year in June, the rate was 3.65. Nationally, the Freddie Mac mortgage rate in June was 3.88 compared to 3.94 percent in May for a 30-year conventional mortgage.
According to the National Association of Realtors, existing-home sales slipped in June as low supply kept homes selling at a near record pace but ultimately ended up muting overall activity. Only the Midwest saw an increase in sales last month.
Nationally, total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.8-percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month’s decline, June’s sales pace is 0.7-percent above a year ago, but is the second lowest of 2017 (February, 5.47 million).
Lawrence Yun is chief economist for the National Association of Realtors. He says the previous three-month lull in contract activity translated to a pullback in existing sales in June. He says, “Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget.” He adds, “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”
Yun adds, “The good news is that sales are still running slightly above last year’s pace despite these persistent market challenges.”
The median existing-home price for all housing types in June was $263,800, up 6.5-percent from June 2016 ($247,600). Last month’s median sales price surpasses May as the new peak and is the 64th straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest rose 3.1-percent to an annual rate of 1.32 million in June (unchanged from June 2016). The median price in the Midwest was $213,000, up 7.7-percent from a year ago.
First-time buyers were 32-percent of sales in June, which is down from 33-percent both in May and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 35-percent.
Yun says, “It’s shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs.” He adds, “Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year.”
All-cash sales were 18-percent of transactions in June, down from 22-percent both in May and a year ago, and the lowest since June 2009 (13-percent). Individual investors, who account for many cash sales, purchased 13-percent of homes in June, down from 16-percent in May and unchanged from a year ago. Fifty-six percent of investors paid in cash in June.
Nationally, the total housing inventory at the end of June declined 0.5-percent to 1.96 million existing homes available for sale, and is now 7.1-percent lower than a year ago (2.11 million) and has fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago.
The numbers reported for local sales include residential property in Berrien, Cass and the westerly 2/3 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.
