Unprecedented inventory levels continue to play havoc with the local housing market in Michigan’s Great Southwest, resulting in the lowest performance level in eight years according to the latest numbers from the Southwestern Michigan Association of Realtors.
Association Executive Alan Jeffries reports that February home sales in the region marked the lowest February sales rate since February of 2014, saying the market is having to adjust “to an extremely low inventory of houses for sale.” He adds, “The number of houses sold in February dropped 16-percent from February of 2021, with 168 homes sold versus 200 in the same month a year ago.” Additionally, the market was 20-percent lower than a month earlier at the end of January 2022 when 210 homes were sold.
As a result, Jeffries notes, “For the first two months of this year, the market was down 20-percent, with sales at 378 compared to 471 in February of 2021 which was the highest year-to-date sales in our year-over-year comparison.”
The market’s low sales rate is precipitated largely by the ongoing fall-off in the inventory of houses for sale. Jeffries reports that inventory fell by another 24-percent to a record low of just 2-months supply at the end of February with 480 properties on the market as compared to the 629 previously available. As the Realtor’s association chief suggests, “This level set an un-welcomed record for buyers searching listings for sale across Allegan, Berrien, Cass, and the westerly two-thirds of Van Buren counties.” By way of comparison, in February of 2009, there were 3,099 houses for sale in the region.
While the inventory continues to languish, prices continue to march upward. The average and median selling price in February of 2022 and the year-to-date selling prices have both soared by double digits to set new record prices in the year-over-year comparison that dates back to 2006.
In February, the average selling price was $324,027 as compared to $265,892 in February of 2021, up 22-percent. Year-to-date, the average selling price has now jumped by 10-percent, averaging $311,243 as compared to $284,092 at the same time last year.
The median selling price in February of 2022 increased 18-percent to $224,450 from $191,000 in February of 2021. Year-to-date, the median selling price also climbed 10-percent to $215,000 as compared to $195,750.
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 increased 2-percent in February 2022 to $54,436,579 as compared to $53,178,553. The year-to-date total dollar volume, however, fell 12-percent to $117,650,192 as compared to $133,807,728, due largely to the dearth of inventory.
The number of bank-owned or foreclosed homes as a percentage of all transactions was 3-percent (3 houses) while the previous low percentage was 6-percent in February of 2019. The highest percentage during a month of February came in February of 2009 at a whopping 75-percent of all transactions.
The Freddie Mac mortgage rate in February was 3.89, up from 3.55 in January for a 30-year conventional mortgage. A year ago, that rate was 2.97.
The monthly data reflects home sales across Allegan, Berrien, Cass, and the westerly two-thirds 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 care encouraged to contact your local Realtor.
Jeffries also offers tips for buying and selling a home:
When Selling a Home…
With the extremely low inventory of houses for sale, you might be wondering if this is a good time to put your house on the market, but you have a lot of questions. What if my house sells before I find a house to buy? How much is my house worth? What happens when someone makes a lousy offer? When considering making this important financial change in your life, you need to seek advice from someone you can trust to look at the whole picture with you. Realtors are professionally trained, have the marketing information to guide decision making, and have the pulse of what buyers’ and sellers’ actions or reactions are in the local market. With the many steps in the selling and buying stages, not to mention the emotions involved, working with a Realtor gives you peace of mind that all your questions will be answered and that the advice you receive will protect your financial investment.
When Buying a Home…
If you’re considering ditching the landlord for a mortgage, there are things you need to know that’ll help you figure out if you’re ready.
Your down payment may not be the biggest hurdle. A healthy credit history is important. Most borrowers will start to qualify for a mortgage with a minimum score of 620. The most competitive interest rates will be offered to those with a score of 700 or above.
You probably will have to compromise. You may start with your dream home in mind, but find that what you can afford may not be in the greatest neighborhood or have that big yard for the kids.
Be emotionally ready for financial surprises. Home-ownership is more hands-on. If the bathroom breaks, you pay to have it fixed or invest in tools to do it yourself.
A mortgage can be cheaper than rent. An added incentive is that your payment will stay the same while a landlord can raise your rent. The real financial advantage is that you are building equity in your home instead of lining your landlord’s pockets.
Meeting with a Realtor can help you gain an unbiased perspective both financially and emotionally before taking this life-changing step.
To view properties that are 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 www.swmar.com.
