Sky-rocketing housing market gains in December have solidified 2020’s place at the top of the heap as the new peak market year, surpassing all others despite pandemic conditions and an ever worrisome decline in available inventory on the open market in Michigan’s Great Southwest. That’s the assessment from Association Executive Alan Jeffries at the Southwestern Michigan Association of Realtors as he recaps the soaring numbers.
Jeffries says, “Since 2015, we started reporting record-setting numbers and prices in our local housing market. We declared 2016 and 2017 to be the new peak years following a slow recovery from the 2008 economic crash. In the year-over-year comparison, 2006 was the previous peak year. The housing market pace continued to climb in in 2018 and 2019. Now, the 2020 Southwest Michigan housing market year has blown out all previous peak years to reign as the new peak market year.”
Previously, the highest number of total houses sold in a year had been 2017’s performance of 3,733 homes sold. Not any longer. In the year just ended, 2020 churned out a remarkable total of 3,924 homes sold, clearing the previous record by fully 5-percent. In 2019, 3,607 houses were sold, which was 9-percent lower than 2020’s new record.
Jeffries says that the average and median selling prices both “blew by” the record prices set in 2019 by double digits. The average selling price for the year was $304,080 as compared to $240,525 in 2019, for a 26-percent increase. The median selling price for the year rose 20-percent to $215,000 as compared to the previous record of $178,000 in 2019.
The year-to-date total dollar volume grew 37-percent above the previous record set in 2019 ($1,193,213,037 vs. $867,817,204).
Additional market highlights show that the number of houses sold each year has stayed above 3,000 for the last eight years running. Since 2015, the average selling price in SWMI has increased 56-percent. With the increasing sales each year, the yearly total dollar volume soared by 85-percent.
Isolating the monthly performance for December of 2020 as compared to the previous December in 2019, the number of homes sold sky-rocketed 44-percent to 367 as compared to 254 a year earlier in the same month.
The average selling price in December increased 26-percent to $318,807 from $252,183 in December of 2019. Even the median selling price rose 15-percent to $202,200 from $176,000 in December of 2019. Both selling prices set new records for December in the year-over-year comparison.
The record sales and selling prices drove the total dollar volume up 83-percent from December of 2019 ($117,002,204 vs. $64,054,495). As a result, the total dollar volume also set a new record.
The median price is the price at which 50% of the homes sold were above that price, and 50% were below.
Jeffries again cautions that, “Unfortunately, there is a downside, in that the inventory of houses for sale has dropped 30-plus percent each month starting in August.” He tells us that at the end of 2020, there were just 717 houses for sale compared to 1,176 a year earlier at the end of 2019. At 717 houses, the market has a 2.8-months supply of homes for sale as compared to 3.7 in November and 4.17 in December of 2019. The 2.8-months supply inventory level marks the lowest in the year-over-year comparison. By way of comparison, ten years ago, in 2010, there were 3,160 houses on the market. The number of listings for sale includes homes across Allegan, Berrien, Cass, and the westerly 2/3rds of Van Buren Counties.
The number of bank-owned or foreclosed homes as a percentage of all transactions increased slightly to 3-percent in December. From June to September, the number of bank-owned or foreclosed homes as a percentage of all transactions held steady at 1-percent. In October and November, the percentage rose to 2-percent. In the early months of the year, January to May, the range was 5- to 7-percent. The highest percentage previously in any December on record was 45-percent set in 2009.
Locally, the mortgage rate decreased slightly to 2.888 from 2.967 in November. Last year in December, the rate was 3.756. Nationally, the Freddie Mac mortgage rate in December also decreased slightly to 2.67 from 2.72 in November for a 30-year conventional mortgage.
The data in Jeffries report reflects home sales across 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.
Jeffries also continues to offer advice to both home sellers and home buyers for the best experience possible.
When Selling a Home…
While you are living through the pandemic with all the added emotional frustrations, keep in mind that putting your house on the market will add more high and low emotions to your current mix. Your Realtor can really give good advice to help you navigate through the ups and downs.
You can expect to move through nine stages of emotion when selling your house.
- Excitement. Hooray! We’re selling our house and moving to our dream home.
- Anxiety. Will anyone want our home? Is it worth our asking price?
- Delight. This is our house? Who knew staging could make it look so great?
- Disappointment NO! This is all someone thinks our house is worth? Will we ever get a decent offer?
- Elation. Hoorah! We accepted an offer! We’re going to move!
- Worry. What if the appraisal is too low? Or the inspection goes bad?
- Relief. Sold! It’s Official! The selling process is finally over.
- Sadness. Our time in our home is over. We’re walking away from so many happy memories.
- Joy. It’s done! We have moved to our new dream home.
When Buying a Home…
A home purchase is typically the largest investment someone will make. For the typical home purchase transaction, the lender usually orders the appraisal to assist in the lender’s decision to provide funds for a mortgage. An appraiser will observe the property, analyze the data, and report their findings to their client.
The appraiser is an independent, impartial, and objective professional in the mortgage transaction. An appraiser develops an appraisal that is a credible, reliable, and supported opinion of value. However, there are other products that appraisers, real estate brokers, or other entities prepare, which vary in levels of analysis, detail, and reliability.
While the lender is technically the owner of the appraisal, as a home buyer, you still have certain rights.
- You have the right to obtain your own appraisal, even if you are paying cash for a property.
- You have the right to know what type of valuation service is being ordered for your loan.
- You have a right to make an appraisal a contingency in your sales agreement.
Protect yourself by getting your investment appraised and/or asking your Realtor for guidance.
To view properties that are for sale in your local area, go to http://www.swmar.com and click on “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 www.swmar.com.