Anybody with a home for sale in the mid-market range in Michigan’s Great Southwest in the last couple of months could have predicted this. Not only is the American dream of owning your own home happening here, the local housing market broke all records last month for houses sold, total dollar volume and both average and median selling prices for any comparable month all the way back to 2006. Equally great news for the real estate market is that the year-to-date numbers have also shattered previous records.
The April housing market performance in the region is especially significant since 2016 had just become the new peak year for the marketplace outpacing all previous marks since 2006. That’s the assessment today from new Association Executive Alan Jeffries who heads up the Southwestern Michigan Association of Realtors, Inc.
Even though April 2016 had become the new benchmark for that month, this April’s market was 6 to 26-percent above a year ago. Jeffries says, “In addition, the April average and median selling prices jumped 11 and 30-percent respectively, over March selling prices.”
The 16-percent drop in the number of houses for sale continues to fuel the record setting pace that the market saw in April. At the end of April there were 1,794 houses for sale compared to 2,134 houses in April 2016. This left just a 5.9-months supply of houses for sale going into the peak selling season with a very tiny increase over the inventory in March of 1,646 which was a 5.4-months supply. In April 2010, the inventory was at 3,452 houses for sale and at 15.6-months supply.
The number of houses sold in April 2017 increased to 290 from 266 in April 2016 for a 9-percent increase. Year-to-date, the number of houses sold was up by 8-percent over April 2016 (965 vs. 890).
The average time a home was on the market before it sold decreased 16-percent in April from 135 days in April 2016 to 114 days. Year-to-date, the number of days on the market has dropped 3-percent (121 days in 2017 vs. 125 days in 2017).
With the record number of houses sold in April, the total dollar volume for April soared 26-percent over April 2016 ($62,096,508 vs. $49,450,607). Year-to-date, the total dollar volume was up 21-percent ($191,510,020 vs. $158,082,544).
The average selling price in April 2017 increased 15-percent from April 2016 ($214, 125 vs. $186,172). The year-to-date, average selling price was up 12-percent ($198,455 vs. $177,620).
The median selling price of $169,000 in April 2017 climbed 21-percent over the $140,000 set in April 2016. Year-to-date the median selling price rose 6-percent to $135,900 from $128,500 in 2016.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
The number of bank-owned or foreclosed homes as a percentage of all transactions in our market in April was 10-percent, down from 13-percent in February and March. That was the lowest percentage for the year and the lowest percentage in April going back to 2009. In April 2009 the percentage was 54-percent.
Locally, the mortgage rate dipped slightly to 4.243 from 4.365 percent in March. Last year in April, the rate was at 3.73. Nationally, the Freddie Mac mortgage rate in April was 4.03 compared to 4.14 percent in March for a 30-year conventional mortgage.
According to the National Association of Realtors, low supply levels held down existing-home sales in April and also pushed the median number of days a home was on the market to a new low of 29 days.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 2.3-percent to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.70 million in March. Despite last month’s decline, sales are still 1.6-percent above a year ago and at the fourth highest pace over the past year.
Lawrence Yun, is Chief Economist for the National Association of Realtors. He says every major region except for the Midwest saw a retreat in existing sales in April, noting, “Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2-percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market.” He adds, “Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase.”
The median existing-home price for all housing types in April was $244,800, up 6.0-percent from April 2016 ($230,900). April’s price increase marks the 62nd straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest sales increased 3.8-percent to an annual rate of 1.36 million in April, but are 0.7-percent below a year ago. The median price in the Midwest was $194,500, up 7.8-percent from a year ago.
Matching the highest percentage since last September, first-time buyers were 34-percent of sales in April, which is up from 32-percent both in March and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 35-percent.
Yun points out that, “Mortgage rates have been stuck in a holding pattern in recent months, which is a relief for spring homebuyers.” He adds, “With price growth showing little sign of slowing, prospective first-time buyers will be the most sensitive to any sudden uptick in rates in the months ahead.”
All-cash sales were 21-percent of transactions in April, down from 23-percent in March and 24-percent a year ago. Individual investors, who account for many cash sales, purchased 15-percent of homes in April, unchanged from March but up from 13-percent a year ago. Fifty-seven percent of investors paid in cash in April.
Nationally, the total housing inventory at the end of April climbed 7.2-percent to 1.93 million existing homes available for sale, but is still 9.0-percent lower than a year ago (2.12 million) and has fallen year-over-year for 23 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.6 months a year ago.
Yun argues that, “Realtors continue to voice the frustration their clients are experiencing because of the insufficient number of homes for sale.”He reminds everyone that, “Homes in the lower- and mid-market price range are hard to find in most markets, and when one is listed for sale, interest is immediate and multiple offers are nudging the eventual sales prices higher.”
The numbers reported for local sales include residential property in Berrien, Cass and the westerly 2/3 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.
