There's good news on the housing front in Michigan's Great Southwest as the local real estate community has stepped off peak selling season in a strong fashion. Tradition in the housing market is for peak season to launch as soon as schools let out for the year, and that peak season is "off to a good start," according to the man at the helm.
Alan Jeffries is Association Executive for the Southwestern Michigan Association of Realtors headquartered on Lakeshore Drive in St. Joseph. He tells us, “The peak season for the housing market is off to a good start. In April, we saw a 27-percent increase over March in the number of houses sold and in May we had a 22-percent increase over April."
Jeffries says, "The total dollar volume in May and for year-to-date, and the average and median selling prices in May and for year-to-date all set new records in the year-over-year comparison from 2006." In fact, he tells us, The number of homes sold in May set a new record, but the year-to-date number of houses sold fell short by just four houses from the record 1,306 sold in 2017.”
Comparing May 2019 to May 2018, the number of houses sold increased 10-percent (361 vs. 328). Year-to-date, the number of houses sold was up 6-percent (1,302 vs. 1,228).
Jeffries adds, “The average selling price in May 2019 increased 21-percent from April ($264,171 vs. $218,607). In May 2018, the average selling price at $256,923, was 3-percent lower than the May 2019 average selling price. Year-to-date, the average selling price changed less than 1-percent ($224,902 vs. $223,910).”
The median selling price jumped 12-percent to $182,000 in May 2019 from $163,000 in May 2018. Year-to-date, the median selling price at $165,000 was up 7-percent from May 2018 ($154,250).
The median price is the price at which 50% of the homes sold were above that price, and 50% were below.
The increased number of home sales raised the total dollar volume in May to a new record of $95,366,067 and brought the total dollar volume up 13-percent over May 2018 ($84,270,858). Year-to-date, the total dollar volume was up 6-percent ($292,823,002 vs. $274,962,131).
The inventory of houses for sale dropped 2-percent below that of a year ago in May 2018 (1,666 vs. 1,704). Jeffries notes that this was the first time in two years that the inventory didn’t drop by double digits when comparing year-to-year in May. At 1,666 houses, the market had a 6.5-months supply of homes for sale. In May 2010, the market had 16.4-month’s supply.
The number of bank-owned or foreclosed homes as a percentage of all transactions rose to 6-percent from 3-percent in April. For the year, the percentage has been below double digits with the highest at 9-percent in January. The previous lowest percentage in May was also 6-percent two years ago in 2017. The highest percentage of foreclosure sales during the month of May was 34-percent in both 2009 and 2011.
Locally, the mortgage rate decreased to 4.255 from 4.320-percent in April. Last year in May, the rate was 4.75. Nationally, the Freddie Mac mortgage rate in May dropped to 3.99 from 4.20 in April for a 30-year conventional mortgage.
According to the National Association of Realtors existing-home sales rebounded in May, recording an increase in sales for the first time in two months. Each of the four major U.S. regions saw a growth in sales, with the Northeast experiencing the biggest surge last month.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums, and co-ops, jumped 2.5-percent from April to a seasonally adjusted annual rate of 5.34 million in May. Total sales, however, are down 1.1-percent from a year ago (5.40 million in May 2018).
Lawrence Yun is Chief Economist for the National Association of Realtors. He says the 2.5-percent jump shows that consumers are eager to take advantage of the favorable conditions, noting, “The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding.”
The median existing-home price for all housing types in May was $277,700, up 4.8-percent from May 2018 ($265,100). May’s price increase marks the 87th straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest jumped 3.4-percent to an annual rate of 1.22 million, which is 3.9-percent below May 2018 levels. The median price in the Midwest was $220,500, an increase of 5.6-percent from a year ago.
First-time buyers were responsible for 32-percent of sales in May, unchanged from the 32-percent figure the month prior and up from the 31-percent recorded in May 2018. The National Association of Realtor's 2019 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 33-percent.
All-cash sales accounted for 19-percent of transactions in May, down from April and a year ago (20-percent and 21-percent, respectively). Individual investors, who account for many cash sales, purchased 13-percent of homes in May, down from 16-percent in April and from 14-percent a year ago.
Nationally, the total housing inventory at the end of May increased to 1.92 million, up from 1.83 million existing homes available for sale in April and a 2.7-percent increase from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, up from both the 4.2 month supply in April and from 4.2 months in May 2018.
Though inventory is up, the months’ supply numbers remain near historic lows, which has a direct effect on price, according to Yun, who suggests, “Solid demand along with an inadequate inventory of affordable homes, have pushed the median home price to a new record high.”
John Smaby, a second-generation Realtor from Edina, Minnesota and Broker at Edina Realty serves as President of the National Association of Realtors. He says, “The month of May ushered in the home sales upswing that we had been expecting,” and adds, “Sales are strengthening in all regions while we see price appreciation for recent buyers.”
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 are encouraged to 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.