“The dwindling inventory of houses for sale continued to raise the selling prices in SWMI to record levels in October 2018 and year-to-date. The year-to-date, total dollar volume also were the highest in the year-over-year comparison since 2006,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
“The number of houses sold in October 2018 was down 8 percent from October 2017 (324 vs. 354). Year-to-date, the number of houses sold was down 4 percent (3,056 vs. 3,167),” said Jeffries.
“The October 2018 average selling price increased 3 percent to $244,403 from $238,088 in October 2017. The year-to-date, average selling price of $232,016 was 7 percent increase over the $217,718 year-to-date average selling price in October 2017,” continued Jeffries.
The median selling price increased 10 percent in October 2018 ($171,000 vs. $156,113). Year-to-date the median selling price was up 5 percent ($162,750 vs. $155,000).
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
With 30 fewer homes sold this October, the total dollar volume dropped 6 percent from October 2017 ($79,186,855 vs. $84,283,224). Year-to-date, total dollar volume was up 3 percent from October 2017 ($709,043,183 vs. $689,513,153).
Inventory of houses for sale decreased 5 percent from a year ago (1737 vs. 1830). At the end of October there was 5.8-months supply of houses for sale; down slightly from 5.9-months supply at the end of October 2017. In October 2010 the inventory of houses for sale was 3385 or 16.6-months supply.
The number of bank-owned or foreclosed homes as a percentage of all transactions in October was 5 percent. The percentage of bank-owned or foreclosed homes has been less than 8 percent since March. The highest percentage in October was 34 percent in 2009.
Locally, the mortgage rate increased to 4.937 from 4.827 in September. Last year in October, the rate was 4.125. Nationally, the Freddie Mac mortgage rate in October was 4.83 up slightly from 4.72 in September for a 30-year conventional mortgage.
According to the National Association of Realtors®, – – Existing-home sales increased in October after six straight months of decreases. Three of four major U.S. regions saw gains in sales activity last month.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.4 percent from September to a seasonally adjusted rate of 5.22 million in October. Sales are now down 5.1 percent from a year ago (5.5 million in October 2017).
Lawrence Yun, NAR chief economist, says increasing housing inventory has brought more buyers to the market. “After six consecutive months of decline, buyers are finally stepping back into the housing market,” he said. “Gains in the Northeast, South and West – a reversal from last month’s steep decline or plateau in all regions – helped overall sales activity rise for the first time since March 2018.”
The median existing-home price for all housing types October was $255,400, up 3.8 percent from October 2017 ($246,000). October’s price increase marks the 80th straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest declined 0.8 percent from last month to an annual rate of 1.27 million in October, down 3.1 percent overall from a year ago. The median price in the Midwest was $197,000, up 2.4 percent from last year.
First-time buyers were responsible for 31 percent of sales in October, down from last month and a year ago (32 percent). NAR's 2018 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 33 percent.
“Rising interest rates and increasing home prices continue to suppress the rate of first-time homebuyers. Home sales could further decline before stabilizing. The Federal Reserve should, therefore, re-evaluate its monetary policy of tightening credit, especially in light of softening inflationary pressures, to help ease the financial burden on potential first-time buyers and assure a slump in the market causes no lasting damage to the economy.” says Yun.
All-cash sales accounted for 23 percent of transactions in October, up from September and a year ago (21 and 20 percent, respectively). Individual investors, who account for many cash sales, purchased 15 percent of homes in October, up from September and a year ago (both 13 percent).
Nationally, the total housing inventory at the end of October decreased from 1.88 million in September to 1.85 million existing homes available for sale, but that represents an increase from 1.80 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, down from 4.4 last month and up from 3.9 months a year ago.
“As more inventory enters the market and we head into the winter season, home price growth has begun to slow more meaningfully,” said Yun. “This allows for much more manageable, less frenzied buying conditions.”
“Despite this much-welcomed month over month gain, sales are still down from a year ago, a large reason for which is affordability challenges from higher interest rates,” said NAR President John Smaby, a second-generation Realtor® from Edina, Minnesota and broker at Edina Realty. “Prospective buyers looking for their dream home in this market should contact a Realtor® as a first step in the buying process to help them navigate this more challenging environment.”
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.