Softer home sales in February firmed up significantly in March as the housing market in Michigan’s Great Southwest established another record-setting quarter on multiple fronts. That’s the snapshot emerging today as George Lucas, President of the Southwestern Michigan Association of Realtors rolls out the monthly sales report today.
Lucas tells us, “The housing market in March, rallied following the restrained results in February. Compared to a year ago, the market was up double digits for number of houses sold, total dollar volume and average selling price.” Lucas goes on to say that, “The first quarter ended setting record numbers for year-to-date, total dollar volume and both year-to-date, average and median selling prices in our year-over-year comparison since 2006.” He calls that “significant, since 2016 surpassed previous housing market results and became the new peak year.”
So what led the market to another surge in March? Lucas says, “Fueling part of the housing market’s rise is the very low inventory of houses for sale. At the end of March there were just 1,646 houses for sale compared to 1,991 houses in March 2016. This was a 17-percent drop in one year. At the end of March we had 5.4-months supply of houses for sale going into the peak selling season. Last year at the end of the quarter there was a 7.1-months supply. To give a perspective of how far the market inventory has fallen, in March 2010 there was 14.7-months supply of houses for sale.”
The number of houses sold in March 2017 increased 17-percent from March 2016 (285 vs. 243). Year-to-date, the number of houses sold was up by 8-percent over March 2016 (675 vs. 624).
The average time a home was on the market before it sold in March was 118 days compared to 115 days in March 2016. At the end of the first quarter, the average time on the market was up slightly from a year ago but just by 3-percent.
The higher number of houses sold sent the total dollar volume for March soaring 35-percent past March 2016 ($54,780,625 vs. $40,717,803). Year-to-date, the total dollar volume was up 19-percent ($129,413,512 vs. $108,631,937). The year-to-date, total dollar volume for the first quarter was the highest in our year-over-year comparison.
The average selling price in March 2017 increased 15-percent from March 2016 ($192, 212 vs. $167,562). The year-to-date, average selling price was up 10-percent ($191,723 vs. $174,089). The year-to-date, average selling price also was a record breaker.
The median selling price of $129,900 in March 2017 was up 3-percent over the $125,900 set in March 2016. At the end of the quarter, the median selling price increased 7-percent to $130,000 from $121,000 in 2016. The median price is the price at which 50% of the homes sold were above that price and 50% were below.
On the foreclosure front, the number of bank-owned or foreclosed homes as a percentage of all transactions in the market in March was 13-percent, the same as in February. In January the percentage was 11-percent. The percentage in March was the lowest percentage in the month of March since 2009 when the bank-owned or foreclosed homes as a percentage was 60-percent.
Locally, the mortgage rate bumped up slightly to 4.365 from 4.314 percent in February. Last year in March, the rate was at 3.84. Nationally, the Freddie Mac mortgage rate in March was 4.14 compared to 4.16 percent in February for a 30-year conventional mortgage.
According to the National Association of Realtors, existing-home sales took off in March to their highest pace in over 10 years, and severe supply shortages resulted in the typical home coming off the market significantly faster than in February and a year ago. Only the West saw a decline in sales activity in March.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, ascended 4.4-percent to a seasonally adjusted annual rate of 5.71 million in March from a downwardly revised 5.47 million in February. March’s sales pace is 5.9-percent above a year ago and surpasses January as the strongest month of sales since February 2007 (5.79 million).
Lawrence Yun if Chief Economist of the National Association of Realtors. He says existing sales roared back in March and were led by hefty gains in the Northeast and Midwest. He reports, “The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month.” He adds, “Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does.”
The median existing-home price for all housing types in March was $236,400, up 6.8-percent from March 2016 ($221,400). March’s price increase marks the 61st consecutive month of year-over-year gains.
Regionally, existing-home sales in the Midwest jumped 9.2-percent to an annual rate of 1.31 million in March, and are now 3.1-percent above a year ago. The median price in the Midwest was $183,000, up 6.2-percent from a year ago.
First-time buyers were 32-percent of sales in March, which is unchanged from February and up from 30-percent a year ago.. NAR’s 2016 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 35-percent.
NAR President William E. Brown, a Realtor from Alamo, California, says patience is a virtue for prospective first-time buyers this spring. He says, “Realtors in most markets are saying interest from first-timers is up this year, but competition is stiff for listings in their price range.” He suggests, “The best advice is to lean on the guidance of a Realtor throughout the home search and be careful about stretching the budget too far. Don’t get frustrated by losing out on a home and know the right one will eventually come along in due time.”
All-cash sales were 23-percent of transactions in March, down from 27-percent in February and 25-percent a year ago. Individual investors, who account for many cash sales, purchased 15-percent of homes in March, down from 17-percent in February but up from 14-percent a year ago. Sixty-three percent of investors paid in cash in March.
Nationally, the total housing inventory at the end of March increased 5.8-percent to 1.83 million existing homes available for sale, but is still 6.6-percent lower than a year ago (1.96 million) and has fallen year-over-year for 22 straight months. Unsold inventory is at a 3.8-month supply at the current sales pace (unchanged from February).
The NAR’s Yun says, “Last month’s swift price gains and the remarkably short time a home was on the market are directly the result of the home-building industry’s struggle to meet the dire need for more new homes.” He notes, “A growing pool of all types of buyers is competing for the lackluster amount of existing homes on the market. Until we see significant and sustained multi-month increases in housing starts, prices will continue to far outpace incomes and put pressure on those trying to buy.”
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 a local Realtor.
