November SWMI Housing Market – Solid Sales & Record-Setting Prices.

November SWMI Housing Market – Solid Sales & Record-Setting Prices.

ST. JOSEPH, MI – “We found that the chilly winds and the looming holiday season did not dampen the November housing market in Southwest Michigan. Year-to-date, total dollar volume, and both average and median selling prices in November set records in the year-over-year comparison since 2006, surpassing those set in 2018. The number of houses sold in November, 277, ended the six months of continued monthly sales above 300 houses.” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS^®, Inc.

Jeffries added, “Home sales in November were up 4 percent from November 2018 (277 vs. 266). Year-to-date sales were within 1 percent from 2018 (3353 vs. 3322). The year-to-date sales in October 2017 still hold the record at 3167 houses sold.”

The average selling price in November 2019 for houses sold in SWMI fell 8 percent to $232,817 from $253,290 in November 2018. Year-to-date, the average selling price set a new record, increased 3 percent ($239,617 vs. $233,720).

The November median selling price was $174,500 compared to $178,250 in November 2018. Also, setting a new record, the year-to-date, the median selling price at $179,210 increased 9 percent over the median selling price of $165,000 in 2018.

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 November 2019 dropped 4 percent from November 2018 ($64,490,436 vs. $67,375,183). Year-to-date, the total dollar volume, setting a new record, rose 3 percent over November 2018 ($803,437,746 vs. $776,417,966).

The inventory of houses for sale dropped 6 percent below that in November 2018 (1451 vs. 1539). At 1451 houses, the market had a 5-months supply of homes for sale compared to 6.7 in October.  In November 2010, the market had a 15.8-months supply with 3158 houses for sale.

The number of bank-owned or foreclosed homes as a percentage of all transactions increased slightly to 3 percent in November. The highest percentage in November was 36 percent in 2010.

Locally, the mortgage rate decreased slightly to 3.808 from 3.871 in October. Last year in November, the rate was 5.017.  Nationally, the Freddie Mac mortgage rate in November also decreased slightly to 3.68 from 3.78 for a 30-year conventional mortgage.

Nationally:

According to the National Association of Realtors^®, – Existing-home sales fell in November, taking a small step back after October’s gains.  The Northeast and Midwest both reported growth last month, while the South and West saw sales decline.

Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, decreased 1.7% from October to a seasonally-adjusted annual rate of 5.35 million in November. However, sales are up 2.7% from a year ago (5.21 million in November 2018). Lawrence Yun, NAR’s chief economist, said the decline in sales for November is not a cause for worry. “Sales will be choppy when inventory levels are low, but the economy is otherwise performing very well with more than 2 million job gains in the past year,” said Yun.

The median existing-home price for all housing types in November was $271,300, up 5.4% from November 2018 ($257,400), as prices rose in all regions. November’s price increase marks 93 straight months of year-over-year gains.

Regionally, existing-home sales increased at the strongest pace in the Midwest at 2.3% to an annual rate of 1.32 million, up 1.5% from a year ago. The median price in the Midwest was $209,700, a 5.9% jump from last November.

Compared to one year ago, fewer homes were sold below $250,000, with a 16% decline for homes priced below $100,000 and a 4% reduction for homes priced from $100,000 to below $250,000.

First-time buyers were responsible for 32 percent of sales in November, essentially hovering at the 31 percent seen in October and 33 percent in November 2018. NAR’s 2019 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 33 percent.

Individual investors or second-home buyers, who account for many cash sales, purchased 16% of homes in November 2019, up from both 14% in October and from 13% in November 2018. All-cash sales accounted for 20% of transactions in November, about even with 19% in October and 21% in November 2018.

Nationally, the total housing inventory at the end of November totaled 1.64 million units, down approximately 7.3% from October and 5.7% from one year ago (1.74 million). Unsold inventory sits at a 3.7-month supply at the current sales pace, down from 3.9 months in October and from the 4.0-month figure recorded in November 2018. Unsold inventory totals have declined for five consecutive months, constraining home sales.

“The new home construction seems to be coming to the market, but we are still not seeing the amount of construction needed to solve the housing shortage,” Yun said. “It is time for builders to be innovative and creative, possibly incorporating more factory-made modules to make houses affordable rather than building homes all on-site.”

Yun cited last week’s NAR Real Estate Forecast Summit, in which 14 leading housing and financial industry economists predicted that the U.S. will likely avoid a recession in 2020 while projecting the economy to grow 2% in the coming year.

“The consensus was that mortgage rates may rise, but only incrementally,” Yun said. “I expect to see home price affordability improvements, too. This year we witnessed housing costs grow faster than income, but the expectation is for prices to settle at a more reasonable level in the coming year in line with average hourly wage growth of 3% on a year-over-year basis.”

Additionally, the majority of the economists – 69% – did not anticipate an increase in the federal funds rate, while 31% expect the Federal Open Market Committee will lower the rate next year. The group predicted an average annual 30-year fixed mortgage rate of 3.8% and home prices (existing and new homes) to increase at a slower rate of 3.6%.

“I would encourage would-be buyers to take advantage of historically-low mortgage rates, which make a home purchase more affordable, particularly when home prices are rising,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, California.

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 1,401,418 million members involved in all aspects of the residential and commercial real estate industries.

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12/19/2019