2020 SWMI Housing Market – Sky-rocketed Sales Catapults to New Peak Year
ST. JOSEPH, MI – “Since 2015, we started reporting record-setting numbers and prices in our local housing market. We declared 2016 and 2017 to be the new peak years following a slow recovery from the 2008 economic crash. In the year-over-year comparison, 2006 was the previous peak year. The housing market pace continued to climb in 2018 and 2019. Now, the 2020 SWMI housing market year has blown out all previous peak years to reign as the new peak market year,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “The highest number of total houses sold in a year previously was 3733 in 2017. In 2020, 3924 houses were sold, clearing the previous record by 5 percent. In 2019, 3607 houses were sold, which was 9 percent lower than in 2020.”
“The average and median selling prices blew by the record prices set in 2019 by double digits. The average selling price for the year was $304,080 compared to $240,525 in 2019, for a 26 percent increase. The median selling price for the year rose 20 percent to $215,000 compared to the previous record of $178,000 in 2019.” said Jeffries.
The year-to-date total dollar volume grew 37 percent above the previous record set in 2019 ($1,193,213,037 vs. $867,817,204).
“Additional market highlights include that the number of houses sold each year has stayed above 3000 for the last eight years. Since 2015, the average selling price in SWMI has increased 56 percent. With the increasing sales each year, the yearly total dollar volume soared 85 percent,” remarked Jeffries.
Looking at just results in December 2020 and comparing it to December 2019, the number of houses sold sky-rocketed 44 percent in December 2020 (367 vs. 254).
The average selling price increased 26 percent to $318,807 from $252,183 in December 2019. The median selling price rose 15 percent to $202,200 from $176,000 in December 2019. Both selling prices set new records for December in the year-over-year comparison.
The record sales and selling prices drove the total dollar volume up 83 percent from December 2019 ($117,002,204 vs. $64,054,495). The total dollar volume also set a new record.
The median price is the price at which 50% of the homes sold were above that price, and 50% were below.
Jeffries added, “Unfortunately, there is a downside to this market. The inventory of houses for sale dropped 30-plus percent each month starting in August. At the end of 2020, there were just 717 houses for sale compared to 1,176 in 2019. At 717 houses, the market had a 2.8-months supply of homes for sale compared to 3.7 in November and 4.17 in December 2019. The 2.8-months supply inventory level was the lowest in the year-over-year comparison. In 2010, there were 3160 houses on the market. The number of listings for sale includes homes across Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren counties.”
The number of bank-owned or foreclosed homes as a percentage of all transactions increased slightly to 3 percent in December. From June to September, the number of bank-owned or foreclosed homes as a percentage of all transactions held steady at 1 percent. In October and November, the percentage was 2 percent. In the early months of the year, January to May, the range was 5 to 7 percent. The highest percentage previously in December was 45 percent in 2009.
Locally, the mortgage rate decreased slightly to 2.888 from 2.967 in November. Last year in December, the rate was 3.756. Nationally, the Freddie Mac mortgage rate in December also decreased slightly to 2.67 from 2.72 in November for a 30-year conventional mortgage.
This data reflects home sales across 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, please contact your local REALTOR®.
Nationally:
According to the National Association of Realtors®, – Existing-home sales rose in December, with home sales in 2020 reaching their highest level since 2006, according to the National Association of Realtors®. Activity in the major regions was mixed on a month-over-month basis, but each of the four areas recorded double-digit year-over-year growth in December.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, increased 0.7% from November to a seasonally-adjusted annual rate of 6.76 million in December. Sales in total rose year-over-year, up 22.2% from a year ago (5.53 million in December 2019).
“Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic,” said Lawrence Yun, NAR’s chief economist. “What’s even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market.”
Yun predicts a continuation of the strong activity that’s currently taking place in the housing market and in the overall economy.
“Although mortgage rates are projected to increase, they will continue to hover near record lows at around 3%,” Yun said. “Moreover, expect economic conditions to improve with additional stimulus forthcoming and vaccine distribution already underway.”
The median existing-home price for all housing types in December was $309,800, up 12.9% from December 2019 ($274,500), as prices increased in every region. December’s national price increase marks 106 straight months of year-over-year gains.
Median home prices increased at double-digit rates in each of the four major regions from one year ago.
Existing-home sales in the Midwest were unchanged, recording an annual rate of 1,590,000 in December, but up 26.2% from a year ago. The median price in the Midwest was $235,700, a 13.7% increase from December 2020.
First-time buyers were responsible for 31% of sales in December, unchanged from the same time in 2019, but down from 32% in November 2020. NAR’s 2020 Profile of Home Buyers and Sellers – released in late 2020 – revealed that the annual share of first-time buyers was 31%.
Individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in December, identical to the share recorded in November 2020 and a small decline from 17% in December 2019. All-cash sales accounted for 19% of transactions in December, down from 20% in both November and December 2019.
Nationally, the total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million). Unsold inventory sits at an all-time low 1.9-month supply at the current sales pace, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019. NAR first began tracking the single-family home supply in 1982.
“To their credit, homebuilders and construction companies have increased efforts to build, with housing starts hitting an annual rate of near 1.7 million in December, with more focus on single-family homes,” Yun said. “However, it will take vigorous new home construction in 2021 and in 2022 to adequately furnish the market to properly meet the demand.”
“NAR will work with the incoming Biden administration in pursuit of policies promoting housing affordability and accessibility,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby’s International Realty. “We were pleased with the homebuyer tax credit President Biden proposed as a candidate, and we look forward to continuing our work with Congress and the White House. We will aim to find common ground, especially related to ways of boosting home supply and working toward solutions that will protect and support homeownership and America’s broader real estate industry.”
The numbers reported for local sales include residential property in 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. If you want to know the market value of your property, please contact your local REALTOR®.
About
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 Allegan, Van Buren, Berrien, Cass, and Van Buren Counties. The Association can be contacted at 269-983-6375 or through their website at www.swmar.com.
The National Association of Realtors®, “That’s Who We R,” is America’s largest trade association, representing more than 1,401,418 million members involved in all aspects of the residential and commercial real estate industries.
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