Each month MoodyOnTheMarket.com brings you an in-depth analysis of the SW Michigan residential real estate market, prepared by the Southwest Michigan Association of REALTORS. We look at the past month and the year-to-date home sales and pricing data.
At the end of 2020, The housing market in SWMI had celebrated four straight years of peak sales and selling prices. In 2021, the COVID shutdown ended in April. However, homebuyers were not sitting on the sidelines. For the first half of the year, home sales were higher each month than in 2020. Then in July, the shrinking inventory took over, and for the second half of the year sales each month fell below that in 2020.
For most of 2021, sellers saw monthly selling prices rising above prices in 2020. Buyers benefited from lending rates holding fairly steady throughout the year, ranging from 2.73 to 3.18 a Freddie Mac mortgage for a 30-year conventional mortgage.
In December 2021, the number of houses sold was down 19 percent compared to December 2020 (296 vs. 367). Sales in December 2020 at 367 were the highest in the year-over-year comparison dating back to 2006. Year-to-date sales in 2021 came close to the record-setting number of sales in 2020 (3889 vs. 3924).
The average selling price in December in 2021 was $377,156, which was 18 percent higher than the average selling price of $318,807 in December 2020, the previous highest selling price. The $377,156 average selling price was also the highest in the year-over-year comparison for December and all of 2021.
The year-to-date average selling price of $325,972 was up 7 percent over 2020 and set a new record in the year-over-year comparison.
The median selling price for December 2021 was $245,000, soaring 19 percent above the $205,500 median selling price for December 2020. The $245,000 median selling price set a new record in the year-over-year comparison and was the highest in all of 2021.
The year-to-date median selling price of $226,100 was a 5 percent increase over $215,000 in 2020 and set a new record 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.
Additional market highlights include that the number of houses sold each year has stayed above 3000 for the last nine years. Since 2015, the average selling price in SWMI has increased 63 percent.
The yearly total dollar volume in 2021 increased 6 percent ($1,267,707,045 vs. $1,193,213,037).
The dark cloud over the market is the dwindling inventory of houses for sale, which ranged from a 48 percent drop in February to the lowest drop of 20 percent in September. At the end of 2021, there were just 514 houses for sale compared to 717 in 2020. At 514 houses, the market ended the year with just a 2.0-months supply of homes for sale compared to 2.7 in November and 2.8 in December 2020. The 2.0-months supply inventory level was the lowest in the year-over-year comparison. In 2010, there were 3160 houses on the market or a 15.8-months supply. The number of listings for sale includes homes across Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren counties.
There was one bank-owned or foreclosed home as part of all transactions in December, which was less than 1 percent. In January 2021, the rate was 4 percent, the highest rate for the year. The previous lowest percentage in December was 3 percent in 2020, and the highest percentage in December was 45 percent in 2009.
Nationally in December, the Freddie Mac mortgage rate was 3.11, up from 3.1 in November for a 30-year conventional mortgage.
Looking forward to 2022, “The Real estate market should stay strong in 2022. Low inventory and low interest rates will continue to fuel the real estate prices in Southwest Michigan,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
The numbers reported for local sales include residential property in Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren Counties. They should not be used to determine the market value of any individual property. If you want to know the market value of your property, contact your local REALTOR®.