ST. JOSEPH, MI ? ?The housing market in November held almost even in the number of houses sold last year, but selling prices sizzled. In November 2015, 222 houses were sold compared to 224 in November 2014. The average selling price for the month was up 27 percent and the median selling price was up 18 percent raising the total dollar volume for the month up 26 percent over November 2014,? stated Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS?, Inc.
?The total number of houses sold so far in 2015 surpasses all houses sold in 2014. In 2014, 3005 houses were sold. At the end of November this year, 3050 houses have sold which was the highest number sold year-to-date by November for the last 10 years. This number puts the market 10 percent ahead of the houses sold by the end of November 2014 when 2775 houses had sold,? said Walter.
The total dollar volume in November at $41,290,231was 26 percent higher than the total dollar volume set in November 2014 at $32,741,588. Year-to-date, the total dollar volume was up 13 percent over last year ($591,168,380 vs. $520, 890,605).
The average selling price in November increased 27 percent from November 2014 ($185, 992 vs. $146, 168). However, in October 2015 the average selling price was $214, 237 bringing in a 13 percent decrease in average selling prices. Year-to-date, the average selling price is up 3 percent ($193, 566 in 2015 vs. $187, 708 in 2014).
The median selling price in November 2015 jumped 18 percent from November 2014 ($120, 000 vs. $101, 750). Year-to-date, the median selling price was up 3 percent over this time in 2014 ($134, 000 vs. $130, 000). The year-to-date median selling price was the highest set over the last 10 years.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
?The number of bank-owned or foreclosed homes as a part of all closed transactions increased to 18 percent from 9 percent set in October. The 9 percent reached in July and October this year was the lowest reached since 2009. In February 2009, 75 percent of all transactions were bank-owned or foreclosed homes,? stated Walter.
Locally, the mortgage rate increased from 3.95 in October to 4.10 in November. Nationally, the Freddie Mac mortgage rate in November was 3.94 compared to 3.8 in October for a 30-year conventional mortgage. A year ago, the average commitment rate was 4.00 percent.
According to the National Association of Realtors?, existing-home sales dropped off considerably in November to the slowest pace in 19 months, but some of the decrease was likely because of an apparent rise in closing timeframes that may have pushed some transactions into December. All four major regions saw sales declines in November.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 10.5 percent to a seasonally adjusted annual rate of 4.76 million in November (lowest since April 2014 at 4.75 million) from a downwardly revised 5.32 million in October. After last month's decline (largest since July 2010 at 22.5 percent), sales are now 3.8 percent below a year ago ? the first year-over-year decrease since September 2014.
Lawrence Yun, NAR chief economist, says multiple factors led to November's sales decline, but the primary reason could be an anomaly as the industry adjusts to the new Know Before You Owe rule. ?Sparse inventory and affordability issues continue to impede a large pool of buyers' ability to buy, which is holding back sales,? he said. ?However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it's highly possible the stark sales decline wasn't because of sudden, withering demand.?
According to Yun, although Realtors? are adjusting accordingly to the Know Before You Owe initiative, the main takeaway so far has been the need for longer closing times. According to NAR's Realtors? Confidence Index, 47 percent of respondents in November reported that they are experiencing a longer time to close compared to a year ago, up from 37 percent in October.
?It's possible the longer timeframes pushed a latter portion of would-be November transactions into December,? says Yun. ?As long as closing timeframes don't rise even further, it's likely more sales will register to this month's total, and November's large dip will be more of an outlier.?
?The Federal Reserve's decision this month to raise short-term rates is the first of many increases over the next couple of years,? says Yun. ?Although this first move will likely have minimal impact on mortgage rates, additional hikes will push borrowing costs to around 4.50 percent by the end of next year. With home prices expected to continue rising, wages and new home construction need to start increasing substantially to preserve affordability.?
The median existing-home price for all housing types in November was $220,300, which is 6.3 percent above November 2014 ($207,200). November's price increase marks the 45th consecutive month of year-over-year gains.
Regionally, existing-home sales in the Midwest sales descended 15.4 percent to an annual rate of 1.10 million in November, and are now 2.7 percent below November 2014. The median price in the Midwest was $169,300, up 5.3 percent from a year ago.
The percent share of first-time buyers was at 30 percent in November, down from 31 percent both in October and a year ago. Despite first-time buyers' continued absence from the market, NAR's inaugural quarterly Housing Opportunities and Market Experience survey ? released earlier this month ? found that an overwhelming majority of current renters who are 34 years of age or younger want to own a home in the future (94 percent). The top reason given by renters for not currently owning was the inability to afford to buy.
Matching the highest share since January, all-cash sales rose to 27 percent of transactions in November (24 percent in October) and are also up from 25 percent a year ago. Individual investors, who account for many cash sales, purchased 16 percent of homes in November (also the highest since January), up both from 13 percent in October and 15 percent a year ago. Sixty-four percent of investors paid cash in November.
Nationally, the total housing inventory at the end of November decreased 3.3 percent to 2.04 million existing homes available for sale, and is now 1.9 percent lower than a year ago (2.08 million). Unsold inventory is at a 5.1-month supply at the current sales pace, up from 4.8 months in October.
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?.
The Southwestern Michigan Association of REALTORS?, Inc. is a professional trade association for real estate licensees and ancillary service providers for the real estate industry in Van Buren, Berrien and Cass counties. The Association is located at 3123 Lake Shore Drive St. Joseph, MI 49085. The Association phone number is (269) 983.6375. They can also be contacted through their web site, www.swmar.com.
The National Association of Realtors?, ?The Voice for Real Estate,? is America?s largest trade association, representing more than 1.1 million members involved in all aspects of the residential and commercial real estate industries.