Characterizing the housing market in Michigan’s Great Southwest over the past ten months as a “frenzy” that has slowed now for ten consecutive months in 2022, Southwestern Michigan Association of Realtors Executive Alan Jeffries says potential homebuyers face an uphill climb.
Scanning the October marketplace numbers — and their attendant realities — Jeffries reports, “Potential homebuyers have faced significant increases in selling prices for the limited availability of homes for sale,” and adds, “If successful in contracting a home, they will find mortgage rates nearly double what they were at the beginning of 2022.”
One small glimmer of hope in this holiday season is that the housing inventory available for sale across the region — which includes Allegan, Berrien, Cass, and the westerly 2/3rds of Van Buren Counties — reached 873 at the end of October. Jeffries reports, “Last year the inventory was at 818 houses, so the gain was 7-percent.” He tells us, “This small gain raised the availability level to 4.1-months supply from 3.2-months supply in October of 2021,” and adds, “For comparison purposes, in October of 2010, there were 3,385 houses for sale and a 16.6-months supply of inventory.”
Looking at financing costs, Jeffries reports that the Freddie Mac mortgage rate climbed to 7.08 from 6.70 in September for a 30-year conventional mortgage, whereas a year ago, that rate was 3.14.
In October, the number of houses sold fell to 294 from 367 in the same month a year ago (October 2021), for a 20-percent drop in sales. Year-to-date sales are down 14-percent from 2021 (2,818 homes sold in 2022 vs. 3,259 a year ago at this time).
The average and median selling prices in October and the year-to-date selling prices continued to set records in the year-over-year comparison, which dates back to 2006, with the average selling price rising 15-percent from that in October of 2021 ($386,894 vs. $337,096). The year-to-date average selling price of $341,454 was 6-percent higher than the $321,711 price in October 2021.
The median selling price increased 11-percent to $260,000 from $235,000 in October of 2021. Year-to-date, the median selling price has risen 11-percent ($249,250 vs. $225,000). The median price is the price at which 50% of the homes sold were above that price, and 50% were below.
The total dollar volume fell 8-percent in October of 2022 ($113,747,087 vs. $123,714,421). Year-to-date total dollar volume at the end of October of 2022 dropped 8-percent ($962,220,066 vs. $1,048,456,410).
Nine houses that were bank-owned or foreclosed were included as a percentage of all transactions. That increase raised the percentage to 3-percent of all transactions. For six months the percentage was at 1-percent. In the beginning of the year, January, the rate was 0-percent. The previous lowest percentage in October was the 1-percent tally reported last year, in 2021. The highest percentage in a month of October was the 34-percent tally set back in 2009.
The housing report 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. Jeffries cautions, “If you want to know the market value of your property, please contact your local Realtor.”
Jeffries also offers advice to both home sellers and home buyers in the current market. Here’s what he has to say:
When Selling a Home…
If you are thinking of taking your Realtor’s suggested selling price and inflating it because you might get more – think again. Buyers have more resources to be better educated about selling prices and will quickly see through a higher price. The potential buyers will walk away, and your house will spend more time on the market. Then you will not be able to move on to your new home, or you will need to take on two mortgages.
Your Realtor has researched comparable properties to your house that have sold and the current listed prices of houses for sale in your market. The suggested price is based on facts, not sentimental value or the cost of renovations. And the suggested price is not based on estimated prices generated by some website calculators that cannot give true comparable analysis. The listing price might be lower than you thought it would be, but listing your home at the right price will save you time and money. Your Realtor is a trained professional with the right resources to market your home and has first-hand experience with buyers to know how they will perceive your house. Contact a Realtor, and selling your house will be a lot less stressful.
When Buying a Home…
Hey Renters! Think you’re not ready to unlock home ownership yet because interest rates have jumped? Discuss with your Realtor about some of the many options available to you.
A low-interest rate is important, but there are factors to consider. When shopping for a loan, check the annual percentage rate. It includes all loan costs, such as origination and processing fees, which can vary widely from lender to lender, and the interest rate.
One loan may have a lower interest rate, but the up-front fees cost more than you’d save in interest. The APR lets you compare apples to apples. Your lender should give you a loan estimate, a line-by-line estimate of fees. You’ll find the APR there, and use that rate to compare the loans you’re considering.
Don’t have a 20-percent down payment? There are programs and options out there that may require as little as zero down.
Your credit score is less than stellar? FHA loans are available to help you. First, check your credit report.
Whatever your roadblock is to home ownership, your Realtor has faced it before with other buyers. So let them be your coach and get in the game of finding your affordable dream home.
To view properties for sale in the local area, go to 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 this click: www.swmar.com