In any ordinary year in Michigan’s Great Southwest, May is the door opener on peak selling season for the regional real estate market. But, we all know that this is anything other than an ordinary year, turned upside down by the coronavirus pandemic. Especially in light of the fact that Realtors were not legally allowed to sell or show homes during the governor’s mandated shutdown. The result is that the housing market in Southwest Michigan suffered its worst record since the economic lockdown began in March, affecting both numbers of homes sold and recently soaring prices.
The Southwestern Michigan Association of Realtors has posted on its Facebook page today that home sales last month, May of 2020, “fell to the lowest level since 2006.” The post adds, “Selling prices also dropped.”
Despite the dismal report, the Realtors group is holding out hope saying, “Since our market has been robust for the last three years, we are expecting this to be a temporary disruption of home sales.”
The report indicates that the number of houses sold in May dropped to 142, which makes it the lowest number of houses sold in the month of May in their year-over-year comparison back 14 years to 2006. Compared to the same month a year ago in May of 2019, it reflects a 61-percent decline (142 vs. 361), and from a month earlier in April of this year, it was a 27-percent decrease.
Year-to-date, the number of houses sold has now fallen 27-percent to 952 from the 1,302 homes sold in May of 2019. Realtors say, “The last time sales had dropped to this level was in May of 2011, when 825 homes were sold.”
Perhaps more telling is the dip in the year over year trend of soaring prices. The average selling price for homes in the region in May was $240,374 compared to $264,171 in May of 2019, representing a 9-percent reduction. Nevertheless, the average selling price was the highest for the year so far. Year-to-date, the average selling price was within $742 ($224,160 vs. $224,902).
The median selling price in May decreased 5-percent to $173,250 from $182,000 in May of 2019. Year-to-date, the median selling price rose 6-percent ($175,126 vs. $165,000). The year-to-date median selling price became the highest median selling price in the year-over-year comparison.
The median price is the price at which 50% of the homes sold were above that price, and 50% were below.
Comparing May to April, the number of houses sold fell 27-percent (142 vs. 194). The average selling price jumped 9-percent ($240,374 vs. $220,208), while the median selling price dropped 7-percent ($173,250 vs.$186,000) in that month-over-month comparison this year.
With fewer houses sold, the total dollar volume fell 64-percent in May ($34,133,128 vs. $95,366,067). The year-to-date total dollar volume was down 27-percent ($213,401,102 vs. $292,823,002).
The already concerning inventory of houses for sale declined 15-percent from May of 2019 to this May (1,420 now vs. 1,666 then). That level gave the market a 6.2-months supply of houses for buyers. In April of 2020, the level was 4.5-months supply. By way of comparison, in May 2010, there were 3,602 houses for sale.
The number of bank-owned or foreclosed homes as a percentage of all transactions was 6-percent in May, the same as in April. Six percent is the lowest percentage reached in May and was achieved in May of both 2019 and 2017. The highest percentage in May was 34-percent back in 2009.
Locally, the mortgage rate was 3.244 up slightly from 3.213 in April. Last year in May, the rate was 4.255. Nationally, the Freddie Mac mortgage rate in May was 3.15 down slightly from 3.23 in April for a 30-year conventional mortgage.
This data reflects home sales across Allegan, 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 are encouraged to contact your local Realtor.