September was not a great month by any stretch for the Southwest Michigan housing market as Realtors saw both sales and inventory fall off compared to both the previous month and the same month a year ago. In fact, it was the slowest September in four years.
Alan Jeffries is the Association Executive for the Southwestern Michigan Association of Realtors. He tells us, “Home sales in September dropped 12-percent from August (348 vs. 397), and when compared to September 2018, the number of houses sold slipped 3-percent to 348 from 360 houses.” Jeffries notes, “This was the lowest number of homes sold in the month of September since 2015.”
With fewer houses to sell, it’s not getting any easier, as Jeffries points out, “The inventory of houses for sale dropped 4-percent below that in September 2018 (1,820 vs. 1,886),” adding, “At 1,820 houses, the market had a 7.3-months supply of homes for sale.” By way of comparison, in September of 2010, the market had 17.3-month’s supply with 3,574 houses for sale, nearly twice as many as now.
Year-to-date sales varied by just one house at the end of September 2019 versus September 2018 (2,731 vs. 2,732). Both year-to-date sales fall short of the peak year of sales for September which happened in 2017 when 2,813 had been sold by that time of the year.
The average selling price in September 2019 for houses sold in Southwest Michigan dropped 2-percent to $241,620 from the average of $245,447 recorded in September of 2018. Year-to-date, the average selling price has increased by 3-percent ($237,390 vs. $230,546), making the year-to-date average selling price the highest in any year-over-year comparison since 2006.
The median selling price jumped 13-percent to $193,500 in September 2019 from $172,000 in September 2018. Year-to-date, the median selling price has risen 10-percent ($177,500 vs. $162,000). Both the monthly and year-to-date selling prices have set records 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.
The total dollar volume in September 2019 decreased 5-percent from September 2018 ($84,083,825 vs. $88,361,176). However, year-to-date, the total dollar volume has risen 3-percent over September 2018 at the same time ($648,313,723 vs. $629,853,828).
The number of bank-owned or foreclosed homes as a percentage of all transactions increased slightly to 4-percent in September from 3-percent in August. That was the same percentage as in September of 2018. The highest percentage in any September on record was 37-percent in 2009.
Locally, the mortgage rate increased to 3.786 from 3.692 in August. Last year in September, the rate was 4.827. Nationally, the Freddie Mac mortgage rate in September rose to 3.65 from 3.58 in August for a 30-year conventional mortgage.
Nationally according to the National Association of Realtors, existing-home sales receded in September following two consecutive months of increases. Each of the four major regions witnessed sales drop off last month, with the Midwest absorbing the brunt of those declines.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, fell 2.2-percent from August to a seasonally adjusted annual rate of 5.38 million in September. Despite the decline, overall sales are up 3.9-percent from a year ago (5.18 million in September 2018).
Lawrence Yun, the National Association of Realtors’ Chief Economist says that despite historically low mortgage rates, sales have not commensurately increased, in part due to a low level of new housing options, suggesting, “We must continue to beat the drum for more inventory.” Yun has called for additional home construction for over a year now, and adds, “Home prices are rising too rapidly because of the housing shortage, and this lack of inventory is preventing home sales growth potential.”
The median existing-home price for all housing types in September was $272,100, up 5.9-percent from September 2018 ($256,900), as prices rose in all regions. September’s price increase marks 91 straight months of year-over-year gains.
Regionally, existing-home sales in the Midwest dropped 3.1-percent to an annual rate of 1.27 million, which is nearly equal to August 2018. The median price in the Midwest was $213,500, a 7.2-percent jump from a year ago.
First-time buyers were responsible for 33-percent of sales in September, up from 31-percent in August and 32-percent recorded in September of 2018. The National Association of Realtors 2018 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 33-percent.
As the share of first-time buyers rose, individual investors or second-home buyers, who account for many cash sales, purchased 14-percent of homes in September 2019, unchanged from August but down from 16-percent recorded last September. All-cash sales accounted for 17-percent of transactions in September, down from 19-percent in August and 21-percent in September 2018.
Nationally, the total housing inventory at the end of September sat at 1.83 million, approximately equal to the number of existing homes available for sale in August, but a 2.7-percent decrease from 1.88 million one year ago. Unsold inventory is at a 4.1-month supply at the current sales pace, up from 4.0 months in August and down from the 4.4-month figure recorded in September 2018.
John Smaby, a second generation Realtor from Edina, Minnesota serves as President of the National Association of Realtors. He says, “For families on the sidelines thinking about buying a home, current rates are making the climate extremely favorable in markets across the country,” and adds, “These traditionally low rates make it that much easier to qualify for a mortgage, and they also open up various housing selections to buyers everywhere.”
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 Berrien, Cass and Van Buren Counties. The Association can be contacted at 269-983-6375 or through their website at www.swmar.com.
