“For the second month, sales in the SWMI housing market sales dropped 19 to 20 percent compared to sales from last year. Selling prices made moderate increases year-to-date. Selling prices in August did not set any records except for the year-to-date selling prices when compared to previous years. The market manages to continue to do well even with a 26 percent drop in inventory of houses for sale,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “In August, at 363, the number of houses sold fell 20 percent below the 455 houses sold in August 2020. Year-to-date, the number of houses sold at the end of August was 2495, up 13 percent over August 2020 (2495 vs.2203). This scored a new sales record in the year-over-year sales records since 2006. For the last six months, the year-to-date sales have set records over previous years.”
Selling prices declined slightly for the first time in 2021, and August selling prices did not surpass prices in 2021. The average selling price in August 2021 was $307,860 compared to $324,302 in August 2020, for a 5 percent decrease. In July 2021, the average selling price was $351,131, or 13 percent higher than the selling price in August. Year-to-date selling prices at the end of August did set records in the year-over-year comparison. The year-to-date average selling price in August 2021 rose 14 percent over August 2020 ($319,151 vs. $280,370).
The median selling price in August 2021 slipped 2 percent to $230,000 from $235,000 in August 2020. Year-to-date, the median selling price climbed 9 percent ($225,000 vs. $206,000). The year-to-date median selling price also set a new record price in the month of August 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 inventory of houses for sale fell 26 percent from a year ago (952 vs. 1285), bringing the inventory of houses for sale to a 3.4-months supply of inventory available for buyers. This is the highest inventory level this year. At the end of August 2020, the market had a 5.9-months supply of houses for sale. For comparison, in August 2009, there were 3821 houses for sale and a 17.8-months supply of inventory.
The total dollar volume plummeted 24 percent in August 2021 ($111,753,405, vs.147,557,780). With the number of sales at higher prices, the year-to-date total dollar volume set a new record for the dollar volume at the end of August ($796,283,722 vs.$ 617,655,862). The year-to-date total dollar volume rose 29 percent.
There were no bank-owned or foreclosed homes as a percentage of all transactions in August. This was the lowest percentage in 2021 and for the last five years. In January, the rate was 4 percent. The previous lowest percentage in August was 1 percent in 2020. The highest percentage in August was 36 percent in 2009.
Nationally, the Freddie Mac mortgage rate in August was 2.7, down slightly from 2.88 in July for a 30-year conventional mortgage.
According to the National Association of Realtors®, existing-home sales retreated in August, breaking two straight months of increases. Each of the four major U.S. regions experienced declines on both a month-over-month and a year-over-year perspective.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, fell 2.0% from July to a seasonally adjusted annual rate of 5.88 million in August. Year-over-year, sales dropped 1.5% from a year ago (5.97 million in August 2020).
“Sales slipped a bit in August as prices rose nationwide,” said Lawrence Yun, NAR’s chief economist. “Although there was a decline in home purchases, potential buyers are out and about searching, but much more measured about their financial limits, and simply waiting for more inventory.”
The median existing-home price for all housing types in August was $356,700, up 14.9% from August 2020 ($310,400), as prices increased in each region. This marks 114 straight months of year-over-year gains.
“High home prices make for an unbalanced market, but prices would normalize with more supply,” said Yun.
Existing-home sales in the Midwest fell 1.4% to an annual rate of 1,370,000 in August, a 2.1% decline from a year ago. The median price in the Midwest was $272,200, a 10.5% jump from August 2020.
“We will continue working with federal policymakers and stakeholders from across the industry in an effort to increase housing supply and ensure the American Dream of homeownership remains accessible to as many people as possible,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby’s International Realty.”
First-time buyers accounted for 29% of sales in August, down from 30% in July and 33% August 2020. NAR’s 2020 Profile of Home Buyers and Sellers – released in late 2020 – revealed that the annual share of first-time buyers was 31%.
“Securing a home is still a major challenge for many prospective buyers,” said Yun. “A number of potential buyers have merely paused their search, but their desire and need for a home remain.”
Moreover, a recent study from NAR found that student loan debt is preventing the majority of non-owner millennials and those making over $100,000 from buying a home.
Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in August, even with July but up from 14% in August 2020. All-cash sales accounted for 22% of transactions in August, down from 23% in July and up from 18% in August 2020.
Nationally, the total housing inventory at the end of August totaled 1.29 million units, down 1.5% from July’s supply and down 13.4% from one year ago (1.49 million). Unsold inventory sits at a 2.6-month supply at the current sales pace, unchanged from July but down from 3.0 months in August 2020.
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.