1st Qtr. SWMI Housing Market –
Sales Down 5% & Average Prices up 8%.
ST. JOSEPH, MI – “At the end of the first quarter of 2020 that included months of economic speculation and the need for social distancing, the number of houses sold only declined by 5 percent from the first quarter in 2019. The housing market inventory of homes for sale also dropped by 4 percent, potentially contributing to the lower number of sales. Selling prices set record levels each month. Year-to-date selling prices at the end of the first quarter also set records in the year-over-year comparison back to 2006.” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “The number of houses sold in March rose to 244 from 234, sold in March 2019 for a 4 percent
increase. Year-to-date, March fell 5 percent over March 2019 (615 vs. 644). Sales peaked at 675 at the end of the first quarter of 2017.”
The average selling price in March 2020 was $221,734 compared to $217,265 in March 2019 up 2 percent. Year-to-date, the average selling price was up 8 percent ($221,825 vs. $205,823). The average selling price and year-to-date average selling price set new record prices in the month of March in the year-over-year comparison.
The median selling price in March 2020 increased 3 percent to $180,000 from $175,000 in March 2019. Year-to-date, the median selling price soared 19 percent ($175,000 vs. $146,500). The median selling price and year-to-date median selling price also set new record prices in the month of March 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 record-setting selling prices, even with fewer houses sold, pushed the total dollar volume up 6 percent in March 2020 ($54,103,134 vs. $50,840,184). The year-to-date total dollar volume was up 3 percent and set the new record for the dollar volume at the end of the first quarter ($136,422,547 vs. $132,550,612).
The inventory of houses for sale dropped 4 percent from March 2019 (1214 vs. 1341). This level gave the market a 4.9-months supply of houses for buyers. For comparison, in March 2009, there were 2969 houses for sale.
The number of bank-owned or foreclosed homes as a percentage of all transactions dropped to 5 percent in March down from 7 percent in January and February. The previous lowest percentage was 7 percent in March 2018. The highest percentage in March was 60 percent in 2009.
Locally, the mortgage rate was 3.635 up from 3.438 in February. Last year in March, the rate was 4.475. Nationally, the Freddie Mac mortgage rate in March was 3.5 up slightly from 3.45 in February for a 30-year conventional mortgage.
Nationally:
According to the National Association of Realtors®, – Home sales increase year-over-year despite expected monthly March sales decline due to the impact of COVID-19. Existing-home sales fell in March following a February that saw significant nationwide gains. Each of the four major regions reported a dip in sales, with the West suffering the largest decrease.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, dropped 8.5% from February to a seasonally-adjusted annual rate of 5.27 million in March. Despite the decline, overall sales increased year-over-year for the ninth straight month, up 0.8% from a year ago (5.23 million in March 2019).
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” said Lawrence Yun, NAR’s chief economist. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
While sales have declined, home prices are still solidly strong. The median existing-home price for all housing types in March was $280,600, up 8.0% from March 2019 ($259,700), as prices increased in every region. March’s national price increase marks 97 straight months of year-over-year gains.
Regionally, compared to the month prior, March sales decreased in every region, while the Midwest and the South experienced increases in year-over-year sales. Median home prices in all regions increased from one year ago, with the Northeast and Midwest regions showing the strongest price gains.
Existing-home sales decreased 3.1% in the Midwest to an annual rate of 1.25 million, up 4.2% from a year ago. The median price in the Midwest was $219,700, a 9.7% increase from March 2019.
First-time buyers were responsible for 34% of sales in March, up from both 32% in February and 33% in March 2019. NAR’s 2019 Profile of Home Buyers and Sellers – released in late 2019 – revealed that the annual share of first-time buyers was 33%.
“Despite the social distancing restrictions, with many Realtors® conducting virtual open home tours and with mortgage rates on the decline, a number of first-time buyers were still able to purchase housing last month,” Yun said.
Individual investors or second-home buyers, who account for many cash sales, purchased 13% of homes in March, down from both 17% in February and 18% in March 2019. All-cash sales accounted for 19% of transactions in March, down from both 20% in February and 21% in March 2019.
Nationally, the total housing inventory at the end of March totaled 1.50 million units, up 2.7% from February, but down 10.2% from one year ago (1.67 million). Unsold inventory sits at a 3.4-month supply at the current sales pace, up from three months in February and down from the 3.8-month figure recorded in March 2019.
“Earlier in the year, we watched inventory gradually tick upward, but with the current quarantine recommendations in place, fewer sellers are listing homes, which will limit buyer choices,” Yun said. “Significantly more listings are needed, and more will come on to the market once the economy steadily reopens.”
NAR’s most recent Flash Survey showed that 93% of sellers changed behavior to help the homebuying transaction move forward with social distancing and necessary precautions.
“It is NAR’s top priority to continue to aid and assist Realtors® during these unpredicted, trying times,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, California. “We have played an instrumental role on Capitol Hill as Congress secured multiple federal relief packages, and we will continue fighting on behalf of our 1.4 million members, American consumers, and the nation’s economy as these conversations persist.”
“We have seen an increase in virtual home tours, e-signings, and other innovative and secure methods that comply with social distancing directives,” Malta continued. “I am confident that Realtors® and brokerages will adapt, evolve, and fight, ensuring the real estate industry will be at the forefront of our nation’s upcoming economic recovery.”
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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