SWMI Housing Market in 2018 Sales Fell Short of 2017. Prices Set Records.
ST. JOSEPH, MI – “Our housing market has had three remarkable years in a row. At the end of 2016, we set a new peak year for sales, total dollar volume and average and median selling prices. The previous peak year was 2006 in year-over-year comparison. Then the market in 2017 finished by outpacing 2016 even with a shrinking inventory of houses for sale. When 2018 ended, it did not surpass 2017 in the number of houses sold but did set records for total dollar volume and selling prices,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
“Starting in May, the housing market had six months of sales with over
300 houses sold in a month; ranging from 324 to 390. Also notable, in May the average selling price set an all-time record at $256,923 and in November the median selling price reached $178,250,” said Jeffries.
The inventory of houses sold dwindled to 1295 at the end of 2018 compared to 1365 in 2017. So at the end of 2018 there was 5.1-months supply of houses for sale. In 2017 the inventory based on sales reached an all-time low at 4.4-months supply of houses for sale. This inventory of houses for sale stretches over Berrien, Cass and the westerly 2/3 of Van Buren counties. For perspective, the inventory in 2010 was 2733 which provided 12.7-months supply of houses for sale.
The number of houses sold in 2018 was 3591 compared to 3733 in 2017 for a 4 percent decrease. For the month of December, 269 houses were sold versus 272 in December 2017 which was a 1 percent decrease.
The total dollar volume in 2018 increased 3 percent over 2017 ($839,392,514 vs. $811,829, 286). Comparing December 2018 to December 2017, the total dollar volume also was up less than 1 percent ($62,983,647 vs. $62,956,495).
The average selling price in 2018 increased to $233,748 from $217,473 in 2017 for a 7 percent rise. In December 2018, the average selling price grew by 1 percent from December 2017 ($234,139 vs. $231,457).
The 2018, median selling price rose 6 percent to $165,000 from $155,000 in 2017. In December 2018, the median selling price was $163,900 which was a 3 percent increase over the December 2017 median selling price of $160,000.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
In all of 2018, there were 10 months (March – December) when the number of bank-owned or foreclosed homes as a percentage of all transactions in our market ranged from 4-8 percent. In January the percentage was 10.5 and in February peaked at 16 percent.
Locally, the mortgage rate in December dropped to 4.718 from 5.017 in November. In December 2017, the rate was 4.075. Nationally, the Freddie Mac mortgage rate in December dropped to 4.55 from 4.81 in November 2018.
Nationally –
According to the National Association of Realtors®, – After two consecutive months of increases, existing-home sales declined in the month of December. None of the four major U.S. regions saw a gain in sales activity last month.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 6.4 percent from November to a seasonally adjusted rate of 4.99 million in December. Sales are now down 10.3 percent from a year ago (5.56 million in December 2017).
Lawrence Yun, NAR chief economist, says current housing numbers are partly a result of higher interest rates during much of 2018. “The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”
The median existing-home price for all housing types in December was $253,600, up 2.9 percent from December 2017 ($246,500). December’s price increase marks the 82nd straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest fell 11.2 percent from last month to an annual rate of 1.19 million in December, down 10.5 percent overall from a year ago. The median price in the Midwest was $191,300, unchanged from last year.
First-time buyers were responsible for 32 percent of sales in December, down from last month (33 percent. NAR’s 2018 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 33 percent.
All-cash sales accounted for 22 percent of transactions in December, up from November and a year ago (21 and 20 percent, respectively). Individual investors, who account for many cash sales, purchased 13 percent of homes in December, the same as November but down from a year ago (16 percent).
Nationally, the total housing inventory at the end of the end December decreased to 1.55 million, down from 1.74 million existing homes available for sale in November, but represents an increase from 1.46 million a year ago. Unsold inventory is at a 3.7-month supply at the current sales pace, down from 3.9 last month and up from 3.2 months a year ago.
“Several consecutive months of rising inventory is a positive development for consumers and could lead to slower home price appreciation,” says Yun. “But there is still a lack of adequate inventory on the lower-priced points and too many in upper-priced points.”
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, 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 Van Buren, Berrien and Cass Counties. The Association can be contacted at 269-983-6375 or through their website at www.swmar.com
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
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