The declining housing market in Michigan’s Great Southwest resumed it’s downward trend in June, now fully 6-percent lower than at this same time a year ago. The only bright points in the report come from higher prices for those who do sell, and the lowest rate of foreclosures in a long time.
Southwestern Michigan Association of Realtors Executive Alan Jeffries says, “At the halfway point of the year, the number of houses sold dropped 6-percent from a year ago (1,595 vs.1,694). The inventory of houses for sale continued to fall behind each month when compared to the same month in 2017, and at the end of June, the inventory was down 9-percent.” The local market had only 1,798 houses for sale for buyers in Berrien, Cass and the westerly 2/3 of Van Buren counties in June, and Jeffries says, “At this level there was a 5.9-months supply of houses for sale. At the end of May there were 1,704 houses for sale.” Meanwhile, by comparison, in 2010, the inventory was nearly three times that much at 16.9-months supply or 3,679 houses.
The year-to-date average selling price increased 8-percent ($225,547 vs. $209,735), while the year-to-date median selling price climbed 5-percent ($158,000 vs. $150,000).
Increased selling prices kept the year-to-date total dollar volume up 1-percent over 2017 ($359,747,465 vs $355,292,735).
Jeffries adds, “A bright point in our local housing market was that we reached a new low percentage in the number of bank-owned or foreclosed homes as a percentage of all transactions for 2018. In June, the percentage dropped to 6-percent.” By comparison, in February it was at 16-percent, and back in June of 2009 the percentage was 36-percent.
Comparing home sales in June 2018, sales were down 5-percent from June 2017 (367 vs. 388). However, the average selling price at $231,009 was 3-percent higher than the June 2017 average selling price of $225,091. The median selling price rose 4-percent ($172,000 vs. $165,250). Yet, the total dollar volume dropped 3-percent ($84,780,334 vs. $87,335,485).
June average and median selling prices and the year-to-date average and median selling prices were the highest prices in the region’s year-over-year comparison back to 2006. The year-to-date total dollar volume was also the highest in that comparison.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
Locally, the mortgage rate decreased to 4.73 from 4.75 in May. Last year in June, the rate was 4.03. Nationally, the Freddie Mac mortgage rate in June was 4.55 down slightly from 4.56 in May for a 30-year conventional mortgage.
According to the National Association of Realtors existing-home sales decreased for the third straight month in June, as declines in the American South and West exceeded sales gains in the Northeast and Midwest. The ongoing supply and demand imbalance helped push June’s median sales price to a new all-time high on a national scale.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.6-percent to a seasonally adjusted annual rate of 5.38 million in June from a downwardly revised 5.41 million in May. With last month’s decline, sales are now 2.2-percent below a year ago.
Lawrence Yun is Chief Economist for the National Association of Realtors. He says closings inched backwards in June and fell on an annual basis for the fourth straight month, noting, “There continues to be a mismatch since the spring between the growing level of homebuyer demand in most of the country in relation to the actual pace of home sales, which are declining.” Yun adds, “The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation’s housing market. What is for sale in most areas is going under contract very fast and in many cases, has multiple offers. This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales.”
The median existing-home price for all housing types in June was $276,900, surpassing last month as the new all-time high and up 5.2-percent from June 2017 ($263,300). June’s price increase marks the 76th straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest sales edged up 0.8-percent to an annual rate of 1.27 million in June but are 3.1-percent below a year ago. The median price in the Midwest was $218,800, up 3.5-percent from a year ago.
First-time buyers were 31-percent of sales in June, which is unchanged from last month and down from 32-percent year ago. The 2017 Profile of Home Buyers and Sellers for the National Association of Realtors revealed that the annual share of first-time buyers was 34-percent.
Yun contends that “Realtors throughout the country continue to stress that there’s considerable pent-up demand for buying a home among the millennial households in their market,” and adds, “Unfortunately, they’re just not making meaningful ground, and continue to be held back by too few choices in their price range, and thereby missing out on homeownership and wealth gains.”
Elizabeth Mendenhall is President of the National Association of Realtors. She tells us, “The modest uptick in new listings last month is perhaps good news for would-be buyers who are still in the market after a highly competitive spring buying season.” A sixth-generation Realtor from Columbia, Missouri and CEO of RE/MAX Boone Realty, Mendenhall suggests, “As summer winds down, the number of home shoppers begins to decrease. Listings are still scarce – especially for entry-level homes – but patience may yield a positive result for those looking to buy in the months ahead.”
All-cash sales were 22-percent of transactions in June, up from 21-percent in May and 18-percent a year ago. Individual investors, who account for many cash sales, purchased 13-percent of homes in June, down from 15-percent in May and unchanged from a year ago.
Nationally, the total housing inventory at the end of June climbed 4.3 percent to 1.95 million existing homes available for sale and is 0.5-percent above a year ago (1.94 million) – the first year-over-year increase since June 2015. Unsold inventory is at a 4.3-month supply at the current sales pace (4.2 months a year ago).
Yun says, “It’s important to note that despite the modest year-over-year rise in inventory, the current level is far from what’s needed to satisfy demand levels.” He notes, “Furthermore, it remains to be seen if this modest increase will stick, given the fact that the robust economy is bringing more interested buyers into the market, and new home construction is failing to keep up.”
The numbers reported for local sales include residential property in 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. If you want to know the market value of your property, you should contact your local Realtor.
The Southwestern Michigan Association of Realtors, Inc. is a professional trade association for real estate licensees who are members of the National Association of Realtors and ancillary service providers for the real estate industry in Van Buren, Berrien and Cass Counties. The Association can be contacted at 269-983-6375 or through their website at www.swmar.com.
