Each month MoodyOnTheMarket.com brings you an exclusive “first look” Housing Market Analysis from the Southwestern Michigan Association of Realtors. In July, the number of sales were down, however prices continued to climb as there were fewer homes on the market for buyers to choose from. Those factors combined to continue to set Year To Date records for sales volume and pricing for residential real estate in Michigan’s Great Southwest.
The median selling price in July 2021 increased 5 percent to $240,500 from $230,000 in July 2020. Year-to-date, the median selling price climbed 13 percent ($225,000 vs. $200,000). The median selling price and year-to-date median selling price also set new record prices in the month of July 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.
In July, at 388, the number of houses sold fell 19 percent below the 479 houses sold in July 2020. Year-to-date, the number of houses sold at the end of July was 2132, up 22 percent over July 2020 (2132 vs.1748). This notched a new sales record in the year-over-year sales records since 2006.
The inventory of houses for sale plummeted 37 percent from a year ago (889 vs. 1399), bringing the inventory of houses for sale to a 3.1-months supply of inventory available for buyers. This is the highest inventory level this year. At the end of July 2020, the market had a 6.6-months supply of houses for sale. For comparison, in July 2009, there were 3661 houses for sale and an 18.1-months supply of inventory.
The total dollar volume dropped 16 percent in July 2021 ($136,238,880 vs.161,759,996). Due to the number of sales at higher prices, the year-to-date total dollar volume set new records for the dollar volume at the end of July ($684,530,317 vs.$470,098,082). The year-to-date total dollar volume rose 46 percent.
The number of bank-owned or foreclosed homes as a percentage of all transactions stayed at 1 percent in July, which it was in June and May. This was the lowest percentage in 2021. In January, the rate was 4 percent. The previous lowest percentage in July was 1 percent in 2020. The highest percentage in July was 35 percent in 2009.
The Association is no longer able to report local area mortgage rates “due to difficulty in obtaining the rates from lenders.” Nationally, the Freddie Mac mortgage rate in July was 2.8, down slightly from 2.98 in June for a 30-year conventional mortgage.
This data reflects home sales across Allegan, 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, including your own.
The Southwestern Michigan Association of Realtors has provided the “primer” below to guide home buyers and sellers, especially those experiencing it for the first time:
When Selling a Home…
Home pricing is more of a science than an art, but many homeowners price with their heartstrings instead of cold, hard data. Smart sellers know that crunching the numbers is always the better route to an accurate home price. Here’s how they do it. The number one rule is to avoid overpricing. If you start high, yes, you can always lower your price, but you take a chance at losing potential buyers because it was out of their budget, and your house may remain on the market for months keeping you from moving to a new home or facing the risk of having two mortgages.
The second rule is to work with a REALTOR® who has access to current market data for pricing your home for sale. Do not rely on online tools to determine your home’s market value. Once on the market, you will know that your house price is right or needs to be adjusted based on the number of showings and offers. Your REALTOR® is your best advisor and a good resource for feedback from potential buyers.
When Buying a Home…
Most people have deeply personal reasons for wanting to buy a home. Maybe it’s the bathroom that feels like a dreamy, modern spa. Your lender doesn’t care about what you like in a house. Their only concern is that the house you buy is worth as much as the value of your mortgage. For that reason, a home must be valued at, or above, the agreed-upon purchase price, and this has to happen before you can close on a house.
After you sign a home purchase agreement, the home you’re buying must pass an appraisal — an assessment of the property’s value by an unbiased third party: the appraiser. They don’t represent you or the seller; instead, this person is a contractor chosen by your lender through an appraisal management company. The home buyer is responsible for paying for the appraisal, and the fee is typically wrapped into your closing costs and ranges from $300-$400. When the appraisal is finished, the appraiser issues a written report with their opinion of the value of the home. Whatever the outcome of the appraisal, your REALTOR® will be there to offer recommendations about how to proceed.
