“Since March, the momentum in number of houses sold has picked up while the increase in the housing inventory has been very marginal. The low inventory has kept the number of houses sold down 6 percent year-to-date. After two years of breaking records in the number of home sales, this year sales have fallen to fourth place in the year-over-year comparison back to 2006. In just the month of May 2018, the number of houses sold fell 4 percent below May 2017 (328 vs. 341),” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
“Selling prices have continued to climb. From April to May this year, the average selling price increased 20 percent ($256,923 vs. $213,923) and the median selling price increased 44 percent ($163,000 vs. $154.950),” continued Jeffries.
Comparing to May 2017, the average selling price was up 15 percent in May 2018 ($256,923 vs. $224,204). Year-to-date, the average selling price was up 9 percent ($223,910 vs. $205,177). Both the May and year-to-date average selling price set records for the highest average selling prices in the year-over-year comparison since 2006.
There was only $2,000 difference in the median selling price in May 2018 from May 2017 ($163,000 vs. $165,000). The year-to-date median selling price at $154,250 was up 6 percent from May 2017 ($145,000) and set a record 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 higher selling prices pushed the total dollar volume up 10 percent in May 2018 when compared to May 2017 ($84,270,858 vs. $76,453,730). Year-to-date, total dollar volume increased 3 percent ($274,962,131 vs. $267,962,250). The May and year-to-date total dollar volume became the highest volume numbers set since 2006.
Inventory of houses for sale increased slightly to 5.6-months supply from 4.9-months supply in April. The inventory at the end of May was 1704 compared to 1501 houses at the end of April. In May 2017, the inventory was 1956 houses for sale. Which was a 13 percent drop in inventory from last year to May 2018. In May 2010 the inventory of houses for sale was 3602.
The number of bank-owned or foreclosed homes as a percentage of all transactions in May dropped back to 7 percent from 8 percent in April. The percentage was 7 percent also in March. The previous lowest percentage in May was 6 percent in 2017. The highest percentage in May was 34 percent in 2009 and 2011.
Locally, the mortgage rate increased to 4.75 from 4.602 in April. Last year in May, the rate was 4.129. Nationally, the Freddie Mac mortgage rate in May was 4.56 down slightly from 4.58 in April for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Existing-home sales fell back for the second straight month in May, as only the Northeast region saw an uptick in activity.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.4 percent to a seasonally adjusted annual rate of 5.43 million in May from downwardly revised 5.45 million in April. With last month’s decline, sales are now 3.0 percent below a year ago and have fallen year-over-year for three straight months.
Lawrence Yun, NAR chief economist, says a solid economy and job market should be generating a much stronger sales pace than what has been seen so far this year. “Closings were down in a majority of the country last month and declined on an annual basis in each major region,” he said. “Incredibly low supply continues to be the primary impediment to more sales, but there’s no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers, and ultimately keeping some from reaching the market.”
The median existing-home price for all housing types in May was $264,800, an all-time high and up 4.9 percent from May 2017 ($252,500). May’s price increase marks the 75th straight month of year-over-year gains.
“Inventory coming onto the market during this year’s spring buying season – as evidenced again by last month’s weak reading – was not even close to being enough to satisfy demand,” added Yun. “That is why home prices keep outpacing incomes and listings are going under contract in less than a month – and much faster – in many parts of the country.”
Regionally, existing-home sales in the Midwest sales declined 2.3 percent to an annual rate of 1.26 million in May and are now 2.3 percent below a year ago. The median price in the Midwest was $209,900, up 4.2 percent from a year ago.
First-time buyers were 31 percent of sales in May), which is down from 33 percent both last month and a year ago. NAR's 2017 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 34 percent.
“Realtors® in many parts of the country say their seller clients are dealing with a seesaw of emotions when deciding to put their home on the market,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “While they’re thrilled that they will immediately find multiple buyers interested in their listing, many fear they’ll have extreme difficulty finding another home to buy. Some have even decided to hold off until inventory conditions start improving, which is actually only exacerbating supply shortages.”
All-cash sales were 21 percent of transactions in May, which is unchanged from April and down from 22 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in May, unchanged from last month and down from 16 percent a year ago.
Nationally, the total housing inventory at the end of May climbed 2.8 percent to 1.85 million existing homes available for sale but is still 6.1 percent lower than a year ago (1.97 million) and has fallen year-over-year for 36 consecutive months. Unsold inventory is at a 4.1-month supply at the current sales pace (4.2 months a year ago).
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.