“The fast and furious pace of the SWMI housing market has run out of steam. In January 2022, the market started with a record low inventory of houses for sale at 514 houses, and in January 2023, the housing inventory ticked up to 639 houses. So our housing inventory is at very low level for buyers in Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren counties,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “January usually tends to be the least productive month of any given year. January 2021 was the last time sales in January peaked and ended with setting new all-time records for sales, selling prices, and total dollar volume in the year-over-year comparison that dates back to 2006. Then January 2022 closed with a 23 percent drop in sales from January 2021 (210 vs. 271). Now January 2023 closed with a 28 percent plunge in sales from January 2022 (151 vs. 210). From our last peak in January 2021 to this January of 2023, the market has stepped back 44 percent from its peak.”
The average selling price declined to $299,531 from $301,017 in January 2022, which was less than a 1 percent change.
The January 2023 median selling price tumbled 4 percent ($202,000 vs. $210,000).
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 $45,229,257 was down 28 percent from the $63,213,613 collected in January 2022.
There were three bank-owned or foreclosed homes as a percentage of all transactions in January, or 2 percent of the closed transactions. The highest percentage in January was 57 percent in 2009.
At the end of January 2023, there were just 639 houses for sale, providing the market with a 3.3-month inventory for homebuyers. In 2013, the market had a 9.5-months supply of houses for sale.
Nationally, in January, the Freddie Mac mortgage rate was 6.13, down from 6.42 in December 2022 for a 30-year conventional mortgage. In January 2022, the mortgage rate was 3.55.
According to the National Association of Realtors®, existing-home sales fell for the twelfth straight month in January. Month-over-month sales were mixed among the four major U.S. regions, as the South and West registered increases, while the East and Midwest experienced declines. All regions recorded year-over-year declines.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, slid 0.7% from December 2022 to a seasonally adjusted annual rate of 4.00 million in January. Year-over-year, sales retreated 36.9% (down from 6.34 million in January 2022).
“Home sales are bottoming out,” said NAR Chief Economist Lawrence Yun. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
The median existing-home price for all housing types in January was $359,000, an increase of 1.3% from January 2022 ($354,300), as prices climbed in three out of four U.S. regions while falling in the West. This marks 131 consecutive months of year-over-year increases, the longest-running streak on record.
Existing-home sales in the Northeast retracted 3.8% from December to an annual rate of 500,000 in January, down 35.9% from January 2022. The median price in the Northeast was $383,000, up 0.3% from the previous year.
In the Midwest, existing-home sales slid 5.0% from the previous month to an annual rate of 960,000 in January, declining 33.3% from one year ago. The median price in the Midwest was $252,300, up 2.7% from January 2022.
“Realtors® help consumers realize the American dream of property ownership, both residential and commercial,” said NAR President Kenny Parcell, a Realtor® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah “A Realtor® possesses trusted expertise and a thorough understanding of local market conditions that prove valuable throughout the entire real estate transaction.”
First-time buyers accounted for 31% of sales in January, identical to December but up from 27% in January 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in late 2022 – revealed that the annual share of first-time buyers was 26%.%, the lowest since NAR began tracking the data.
All-cash sales accounted for 29% of transactions in January, up from 28% in December and 27% in January 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in January, unchanged from December but down from 22% in January 2022.
Total housing inventory at the end of January was 980,000 units, up 2.1% from December and 15.3% from one year ago (850,000). Unsold inventory sits at a 2.9-month supply at the current sales pace, unchanged from December but up from 1.6 months in January 2022.
“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun added. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”
The numbers reported for local sales include residential property in Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren Counties. They 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 who are members of the National Association of REALTORS® and ancillary service providers for the real estate industry in Allegan, 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 1.4 million members involved in all aspects of the residential and commercial real estate industries.