Everybody loves the summer selling season in the real estate industry, and even Southwest Michigan jumped back into the act to turn around the recent slowdown that had overtaken the market driven largely by inventory constraints.
In fact, Alan Jeffries, Association Executive for the Southwestern Michigan Association of Realtors says, “July became a record selling month for 2018 in our year-over-year comparison for all the numbers we report except for number of units sold year-to-date.” Jeffries says that due to slower months on many occasions so far this year, “The number of year-to-date houses sold at 1,985 fell 2-percent behind sales in July 2017 and 2006 for 3rd place.” He notes, however, that, “After two peak years in row (2016 and 2017), the market has stayed robust for sellers with the low inventory for buyers.”
The number of houses sold last month, in July 2018, jumped fully 18-percent over July of 2017 (390 vs. 330).
There was little change in the average and median selling prices from July 2017 to July 2018. The average selling price at $228,965 last month (July 2018) was 2-percent higher than $224,705 in July a year ago (2017). The median selling price grew less than 1-percent in that comparison period ($165,750 vs. $164,819).
When you advance the numbers to the full year-to-date, rather than just a single month’s measure, the average selling price increased 7-percent ($226,218 vs. $212,176) and the median selling price increased 5-percent locally ($160,000 vs. $152,225).
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
The increase in the number of houses sold in July 2018 pushed the total dollar volume up 20-percent over July 2017 ($89,296,357 vs. $74,152,768), while the year-to-date total dollar volume figure increased a more modest 5-percent ($449,043,822 vs. $429,445,503).
On a bright blip, the inventory of houses for sale increased slightly to 6.29-months supply from 5.9-months supply in June. The inventory at the end of July was 1,892 compared to 1,798 houses at the end of June. In July 2017, the inventory was 2,019 houses for sale, which was a 6-percent drop in inventory from last year to July 2018. In July 2010 the inventory of houses for sale was 3,821.
The number of bank-owned or foreclosed homes as a percentage of all transactions in July dropped to 4-percent; the lowest percentage of the year. The percentage was 6-percent in June. The lowest percentage in 2017 was also 4-percent in July and August. The highest percentage in July was 35-percent, nine years ago in 2009.
Locally, the mortgage rate decreased to 4.681 from 4.73 in June. Last year in July, the rate was 4.063. Nationally, the Freddie Mac mortgage rate in July was 4.54 down slightly from 4.55 in June for a 30-year conventional mortgage.
Nationally, according to the National Association of Realtors, existing-home sales subsided for the fourth straight month in July to their slowest pace in more than two years. The West was the only major region with an increase in sales last month.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.7-percent to a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. With last month’s decline, sales are now 1.5-percent below a year ago and have fallen on an annual basis for five straight months.
Lawrence Yun, who is Chief Economist for the National Association of Realtors, says the continuous solid gains in home prices have now steadily reduced demand. He suggests, “Led by a notable decrease in closings in the Northeast, existing home sales trailed off again last month, sliding to their slowest pace since February 2016 at 5.21 million.” He adds, “Too many would-be buyers are either being priced out or are deciding to postpone their search until more homes in their price range come onto the market.”
The median existing-home price for all housing types in July was $269,600, up 4.5-percent from July 2017 ($258,100). July’s price increase marks the 77th straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest declined 1.6-percent to an annual rate of 1.25 million in July and are 0.8-percent below a year ago. The median price in the Midwest was $210,500, up 2.5-percent from a year ago.
First-time buyers were 32-percent of sales in July, which is up from 31-percent last month but down from 33-percent a year ago. The national organization’s 2017 Profile of Home Buyers and Sellers reveals that the annual share of first-time buyers was 34-percent.
Elizabeth Mendenhall, a 6-generation Realtor from Columbia, Missouri and CEO of RE/MAX Boone Realty, serves as President of the National Association of Realtors. She reports that, “Despite first-time buyers struggling to achieve homeownership, Realtors in most areas say demand is still the strongest at the entry-level segment of the market.” She adds, “For prospective first-timers looking to begin their home search this fall, it is expected that competition will remain swift. That is why it’s important to be fully prepared with a pre-approval from a lender, and to begin conversations with a Realtor early about what you’re looking for and where.”
All-cash sales were 20-percent of transactions in July, down from 22-percent in June but up from 19-percent a year ago. Individual investors, who account for many cash sales, purchased 13-percent of homes in July (unchanged from last month and a year ago).
Nationally, the total housing inventory at the end of July decreased 0.5-percent to 1.92 million existing homes available for sale (unchanged from a year ago). Unsold inventory is at a 4.3-month supply at the current sales pace (also unchanged from 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.
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.
