Following months of shutdown and heading into prime selling season, the pent-up demand for the housing market in Michigan’s Great Southwest sent the market soaring, as the number of homes sold more than doubled from May to June according to the latest report from the Southwestern Michigan Association of Realtors.
Finally released to showcase homes in the region, the real estate community and customers alike were euphoric in getting back to business with the market skyrocketing by 124-percent in June as compared to a month earlier in May. In fact, while May had produced only 142 home sales, marking the lowest number of sales in year-over-year comparisons dating back to 2006, in June 318 homes were sold by brokers and sales people across the marketplace.
Despite that huge bounce back, the number of homes sold in June of this year was still a 13-percent decline from the same month a year ago in June of 2019 when 367 homes were sold.
Additionally, the year-to-date performance in the local real estate market of Southwest Michigan lags the first half of 2019 by 24-percent. So far this year, market has produced 1,269 sales through June while a year ago that number was 1,669 homes sold.
Association Executive Alan Jeffries tells us, “The most startling result was the sky-rocketing average and median sales prices that shattered all selling prices in any month in any year going back to 2006.”
Jeffries reports that the average selling price at $300,418 in June was 14-percent higher than the $263,214 average selling price a year ago in June of 2019 and 25-percent higher than the $240,374 price one month earlier in May of 2020. The spike in the June average selling price raised the year-to-date, average selling price by 4-percent to $242,978 as compared to $233,307 last year.
The median selling price rose to $234,950 from $186,001 in June 2019 for a 26-percent increase. From May of 2020 to June, the median selling price increased 36-percent. In May, the median selling price was $173,250. Year-to-date, the median selling price has risen 11-percent to $187,900 versus the $169,000 media price last year at this time.
The median price is the price at which 50% of the homes sold were above that price, and 50% were below.
With fewer houses sold, the total dollar volume dropped by just 1-percent in June ($95,532,984 vs. $96,566,516). The year-to-date total dollar volume, however, has fallen by 21-percent ($308,340,086 vs. $389,389,518).
The inventory of houses for sale also declined 13-percent from June of 2019 (1,500 now vs. 1,721 then). That level gave the market a 6.7-months supply of houses for buyers. In May of 2020, the level was a 6.2-months supply. For comparison, ten years ago in June of 2010, there were 3,679 houses for sale.
The surge in June’s activity caused the number of bank-owned or foreclosed homes as a percentage of all transactions to drop to 1-percent in June. That marks the lowest percentage reached since 2009. In May and April, the level was at 6-percent. The highest percentage previously in the month of June was 36-percent in 2009.
Locally, the mortgage rate was 3.253 up slightly from 3.244 in May. Last year in June, the rate was 4.026. Nationally, the Freddie Mac mortgage rate in June was 3.13 down slightly from 3.15 in May 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 should contact your local Realtor.
Jeffries is also offering advice to both those selling a home and those looking to buy.
When Selling a Home…
If you want to fetch top dollar for your home and walk away with as much money in your pocket as possible, keep in mind that the offer price isn’t the only thing worth considering.
One important consideration when weighing an offer is the size of the earnest money deposit. The higher the amount, the more serious the buyer may be. The standard amount is 1-percent to 3-percent of the cost of the home.
Most offers have contingencies – provisions that must be met for the transaction to go through, or the buyer is entitled to walk away from the deal with their earnest money. Contracts with fewer contingencies are more likely to reach closing and in a timely fashion. Your Realtor can advise you on the many contingencies and how each can affect you.
You should also consider the down payment the buyer is planning to make. The size of the down payment signals the strength of the offer.
The closing date may also have a big influence. Whether you want a slow or quick settlement will depend on your circumstances. If you’ve already purchased your next home, for instance, you probably want to close as soon as possible. Or you may need more time if you still have not purchased a home.
When Buying a Home…
When you embark on the home-buying process, your heart is filled with all the dreams in the world. It’s really easy to get caught up in the game of “I have to have _________, so I’ll cut back somewhere else.”
You should start by making a list of everything you want in your house. If you love it, jot it down. Have your spouse or partner do the same thing in a separate document.
Next, start sorting your wants by order of importance. What’s your No. 1 priority? What are the top 10? Think about things that are important and can not be changed, such as the number of bedrooms should have a higher priority.
Wants that are lower on your list should be cosmetic that can be changed. For example, wood flooring can be added later. You don’t want to pass up a fantastic house because you “can’t see past the orange carpeting.”
Take your list with you when looking at a house to keep you focused. Make notes on the home’s features and compare with your priorities. If one of your top items is not available, ask yourself, would you feel like your house would be incomplete without it?
To view properties that are for sale in the local area, go to www.swmar.com and click on “Property 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 http://www.swmar.com.