“Southwest Michigan’s housing market in February 2023 closed with lower sales and selling prices compared to February 2022, when sales were slightly higher, but selling prices set the record in the year-over-year market comparison that dates back to 2006,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “The number of houses sold in February dropped 6 percent from February 2022 (158 vs. 168). The level of sales in February 2023 was the lowest since February 2014.
For the first two months of this year, the market was down 18 percent, with sales at 309 compared to 378 in February 2022. The highest number of sales in February was 471 in 2021.”
The inventory of houses for sale increased 27 percent, providing a 3.2-months supply at the end of February (613 vs. 480). This level still needs to be higher for buyers searching listings for sale across Allegan, Berrien, Cass, and the westerly two-thirds of Van Buren counties. For comparison, in February 2009, there were 3099 houses for sale.
The average and median selling price in February 2022 and year-to-date selling prices soared double-digits to set new record prices in the year-over-year comparison.
In February 2023, the average selling price was $267,416 compared to $324,027 in February 2022, a 17 percent drop. Year-to-date, the average selling price fell 9 percent ($283,109 vs. $311,243).
The median selling price in February 2023 increased by$550 to $225,000 from $224,450 in February 2022. Year-to-date, the median selling price stayed the same at $215,000.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
With lower sales, the total dollar volume decreased 22 percent in February 2023 ($42,251,729 vs. $54.436,579). The year-to-date total dollar volume dropped 26 percent ($87,480,386 vs. $117,650,192).
The number of bank-owned or foreclosed homes as a percentage of all transactions was 2 percent (4 houses), the same as in January. The previous low percentage was 3 percent in February 2021, and the highest percentage in February was 75 percent in 2009.
Nationally, in February the Freddie Mac rate was 6.50, up from 6.13 in January for a 30-year conventional mortgage. A year ago, the rate was 3.89.
According to the National Association of Realtors®, existing-home sales reversed a 12-month slide in February, registering the largest monthly percentage increase since July 2020. Month-over-month sales rose in all four major U.S. regions. All regions posted year-over-year declines.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, vaulted 14.5% from January to a seasonally adjusted annual rate of 4.58 million in February. Year-over-year, sales fell 22.6% (down from 5.92 million in February 2022).
“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” said NAR Chief Economist Lawrence Yun. “Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.”
The median existing-home price for all housing types in February was $363,000, a decline of 0.2% from February 2022 ($363,700), as prices climbed in the Midwest and South yet waned in the Northeast and West. This ends a streak of 131 consecutive months of year-over-year increases, the longest on record.
In the Midwest, existing-home sales grew 13.5% from the previous month to an annual rate of 1.09 million in February, declining 18.7% from one year ago. The median price in the Midwest was $261,200, up 5.0% from February 2022.
“Owning a home provides a path to long-term financial security and is a vehicle by which to transfer wealth to future generations,” said NAR President Kenny Parcell, a REALTOR® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “REALTORS® deliver expert guidance, objectivity, and professionalism to consumers during the complex process of purchasing a home.”
First-time buyers accounted for 27% of sales in February, down from 31% in January and 29% in February 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 28% of transactions in February, down from 29% in January but up from 25% in February 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in February, up from 16% in January but down from 19% in February 2022.
Total housing inventory at the end of February was 980,000 units, identical to January and up 15.3% from one year ago (850,000). Unsold inventory sits at a 2.6-month supply at the current sales pace, down 10.3% from January but up from 1.7 months in February 2022.
“Inventory levels are still at historic lows,” Yun added. “Consequently, multiple offers are returning on a good number of properties.”
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.