January SWMI Housing Market –
Good Start with Lower Prices.
ST. JOSEPH, MI – “The housing market across SWMI in January 2020, started the year off to a good start by bouncing back significantly from January 2019 in sales and by giving buyers a break from the escalating selling prices in the latter half of 2019.” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “January tends to be the least productive month of any given year. For a variety of reasons, buyers and
sellers push to close in December before the year-end. When we compare the number of houses sold and closed in December to January of the next year, there has been a 25 to 37 percent drop in houses sold over the last five years. For example, home sales in January 2020 were 25 percent below sales in December 2019 (190 vs. 254).”
Milder weather last month may have pushed home sales up 9 percent over January 2019 (190 vs. 175). January 2020, home sales returned to the same level as in January 2018. The increase in sales was notable since the inventory of houses for sale dropped 5 percent from January 2019 (1,178 vs. 1,244). Since 2017, the inventory level has been around 4.2 to 4.9-months supply in January. The declining inventory affects buyers living in Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren counties.
The average selling price increased 11 percent $220,881 from $199,131 in January 2019.
The median selling price dropped 23 percent from January 2019 ($168,750 vs. $137,500).
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 at $41,967,468 jumped 21 percent in January 2020 from $34,848,017 in January 2019.
The number of bank-owned or foreclosed homes as a percentage of all transactions was 7 percent in January, reaching the lowest percentage in the year-over-year comparison. In December 2019, the percentage was 4 percent. The highest percentage in January was 57 percent in 2009.
Locally, the mortgage rate decreased to 3.589 from 3.756 in December 2019. Last year in January, the rate was 4.573. Nationally, the Freddie Mac mortgage rate in January was 3.51 versus 3.74 in December for a 30-year conventional mortgage.
Nationally:
According to the National Association of Realtors®, – Existing-home sales declined in January, continuing a fluctuating pattern of monthly increases and declines. Significant declines in the West region dragged down nationwide numbers, with the other three major U.S. regions reporting marginal – or no – changes last month.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, decreased 1.3% from December to a seasonally-adjusted annual rate of 5.46 million in January. However, for the second straight month, overall sales substantially increased year-over-year, up 9.6% from a year ago (4.98 million in January 2019).
Lawrence Yun, NAR’s chief economist, finds the outlook for 2020 home sales promising despite the drop in January. “Existing-home sales are off to a strong start at 5.46 million,” Yun said. “The trend line for housing starts is increasing and showing steady improvement, which should ultimately lead to more home sales.”
The median existing-home price for all housing types in January was $266,300, up 6.8% from January 2019 ($249,400), as prices increased in every region. December’s price increase marks 95 straight months of year-over-year gains. “Mortgage rates have helped with affordability, but it is supply conditions that are driving price growth,” Yun said.
Regionally, compared to last month, January sales only increased in the Midwest, while year-over-year sales are up in each of the four regions. Median home prices in all regions increased from one year ago, with the Northeast region showing the strongest price gain.
Existing-home sales increased 2.4% in the Midwest to an annual rate of 1.29 million, which is up 8.4% from a year ago. The median price in the Midwest was $200,000, a 5.4% increase from last January.
First-time buyers were responsible for 32% of sales in January, up from 31% in December and up from 29% in January 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%.
“It is good to see first-time buyers slowly stepping into the market,” Yun said. “The rise in the homeownership rate among the younger adults, under 35, and minority households means an increasing number of Americans can build wealth by owning real estate. Still, in order to further expand opportunities, significantly more inventory and home construction are needed at the affordable price points.”
Individual investors or second-home buyers, who account for many cash sales, purchased 17% of homes in January, equal to December 2019 and up slightly from 16% in January 2019. All-cash sales accounted for 21% of transactions in January, up from 20% in December but down from 23% in January 2019.
Nationally, the total housing inventory at the end of January totaled 1.42 million units, up 2.2% from December, but down 10.7% from one year ago (1.59 million). The housing inventory level for January is the lowest level since 1999. Unsold inventory sits at a 3.1-month supply at the current sales pace, up from the 3.0-month figure recorded in December and down from the 3.8-month figure recorded in January 2019.
“We are hopeful and also confident that home sales will improve this year,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif. “NAR has and will continue to do its part in the industry, reiterating the social and economic benefits of homeownership and advancing conversations surrounding housing affordability concerns.”
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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