SWMI Housing Market –
Sales up 124% From May At Record Shattering Selling Prices
ST. JOSEPH, MI – “After months of shut down, the pent-up demand lifted the SWMI housing market back up by 124 percent in June compared to May. In May, only 142 houses were sold, setting the lowest number of sales in the year-over-year comparison that dates back to 2006. In June, 318
houses were sold,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “The number of houses sold in June was down 13 percent from June 2019 (318 vs. 367). Year-to-date, the number of houses sold fell 24 percent to 1269 from 1669 sold in June 2019.”
“The most startling result was the sky-rocketing average and median sales prices that shattered all selling prices in any month in any year going back to 2006,” stated Jeffries.
The average selling price at $300,418 was 14 percent higher than the $263,124 average selling price in June 2019 and 25 percent higher than the $240,374 price in May 2020. The spike in the June average selling price raised the year-to-date, average selling price by 4 percent ($242,978 vs. $233,307).
The median selling price rose to $234,950 from $186,001 in June 2019 for a 26 percent increase. From May 2020 to June, the median selling price increased 36 percent. In May, the median selling price was $173,250. Year-to-date, the median selling price rose 11 percent ($187,900 vs. $169,000).
The median price is the price at which 50% of the homes sold were above that price, and 50% were below.
With fewer houses sold, the total dollar volume dropped only 1 percent in June ($95,532,984 vs. $96,566,516). The year-to-date total dollar volume fell 21 percent ($308,340,086 vs. $389,389,518).
The inventory of houses for sale declined 13 percent from June 2019 (1500 vs. 1721). This level gave the market a 6.7-months supply of houses for buyers. In May 2020, the level was 6.2-months supply. For comparison, in June 2010, there were 3679 houses for sale.
The surge in June’s activity caused the number of bank-owned or foreclosed homes as a percentage of all transactions to drop to 1 percent in June. This was the lowest percentage reached since 2009. In May and April, the level was at 6 percent. The highest percentage in previously in June was 36 percent in 2009.
Locally, the mortgage rate was 3.253 up slightly from 3.244 in May. Last year in June, the rate was 4.026. Nationally, the Freddie Mac mortgage rate in June was 3.13 down slightly from 3.15 in May for a 30-year conventional mortgage.
Nationally:
According to the National Association of Realtors®, – Existing-home sales rebounded at a record pace in June, showing strong signs of a market turnaround after three straight months of sales declines caused by the ongoing pandemic. Each of the four major regions achieved month-over-month growth, with the West experiencing the greatest sales recovery.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, jumped 20.7% from May to a seasonally-adjusted annual rate of 4.72 million in June. Sales overall, however, dipped year-over-year, down 11.3% from a year ago (5.32 million in June 2019).
“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, NAR’s chief economist. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
The median existing-home price for all housing types in June was $295,300, up 3.5% from June 2019 ($285,400), as prices rose in every region. June’s national price increase marks 100 straight months of year-over-year gains.
In a complete reversal of the month prior, regional sales for June increased in every region. Median home prices grew in each of the four major regions from one year ago.
Existing-home sales increased 11.1% in the Midwest to an annual rate of 1,100,000 in June, down 13.4% from a year ago. The median price in the Midwest was $236,900, a 3.2% increase from June 2019.
First-time buyers were responsible for 35% of sales in June, up from 34% in May 2020 and about equal to 35% in June 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%.
Individual investors or second-home buyers, who account for many cash sales, purchased 9% of homes in June, down from 14% in May 2020, and 10% in June 2019. All-cash sales accounted for 16% of transactions in June, down from 17% in May 2020 and about equal to 16% in June 2019.
Nationally, the total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.
Yun explains that significantly low inventory was a problem even before the pandemic and says such circumstances can lead to inflated costs. “Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”
Yun’s concerns are underscored in NAR’s recently released 2020 Member Profile, in which Realtors® point to low inventory as one of the top hindrances for potential buyers.
“It’s inspiring to see Realtors® absorb the shock and unprecedented challenges of the virus-induced shutdowns and bounce back in this manner,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif. “NAR and our 1.4 million members will continue to tirelessly work to facilitate our nation’s economic recovery as we all adjust to this new normal.”
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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