“The local housing market in August continued the same story that every month in 2022 experienced, bringing the peak selling years to a halt.
Sales were down from the same month in 2021. The number of houses available for sale dropped to below 1000 each month which is extremely low for nearly a three-county sales area. The reduced inventory of houses for sale brought record selling prices each month this year, with the exception of January and April in the year-over-year comparison. The mortgage rate is now above 5 percent,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “in August, the number of houses sold fell to 340 from 363 in August 2021, for a 6 percent drop in sales. Year-to-date sales were down 12 percent from 2021 (2185 vs. 2495).”
“The average and median selling prices in August and the year-to-date selling prices set records in the year-over-year comparison, which dates back to (2006), Jeffries stated.
The average selling price rose 16 percent from that in August 2021 ($356,179 vs. $307,860). The year-to-date average selling price of $335,462 was 5 percent higher than the $319,151 price in August 2021.
The median selling price increased 8 percent to $248,750 from $230,000 in August 2021.
Year-to-date, the median selling price rose 9 percent ($245,000 vs. $225,000).
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 rose 8 percent in August 2022 ($121,100,896 vs. $111,753,405). The year-to-date total dollar volume at the end of August 2022 fell 8 percent ($732,985,567 vs. $796,283,722).
The inventory of houses for sale dropped 7 percent from August 2021 (884 vs. 952). With fewer houses selling, the inventory of houses for sale increased to a 4.0-months supply of inventory available for buyers, up from the 3.9-months supply in July 2022. For comparison, in August 2010, there were 3757 houses for sale and a 17.8-months supply of inventory.
The number of bank-owned or foreclosed homes as a percentage of all transactions stayed at 1 percent in August, the same as in July, June, May, and April. In January, the rate was 0 percent, the lowest in 2022. The previous lowest percentage in August was 1 percent in 2021. The highest percentage in August was 36 percent in 2009.
Nationally, Freddie Mac mortgage rate in August was 5.5, up from 5.30 in July for a 30-year conventional mortgage. A year ago, the rate was 2.87.
According to the National Association of Realtors®, – Existing home sales experienced a slight dip in August, marking the seventh consecutive month of declines. Month-over-month sales varied across the four major U.S. regions as two regions recorded increases, one was unchanged, and the other posted a drop. On a year-over-year basis, however, sales fell in all regions.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, notched a minor contraction of 0.4% from July to a seasonally adjusted annual rate of 4.80 million in August. Year-over-year, sales faded by 19.9% (5.99 million in August 2021).
“The housing sector is the most sensitive to and experiences the most immediate impacts from the Federal Reserve’s interest rate policy changes,” said NAR Chief Economist Lawrence Yun. “The softness in home sales reflects this year’s escalating mortgage rates. Nonetheless, homeowners are doing well with near nonexistent distressed property sales and home prices still higher than a year ago.”
The median existing-home price for all housing types in August was $389,500, a 7.7% jump from August 2021 ($361,500), as prices ascended in all regions. This marks 126 consecutive months of year-over-year increases, the longest-running streak on record. However, it was the second month in a row that the median sales price retracted after reaching a record high of $413,800 in June, the usual seasonal trend of prices declining after peaking in the early summer.
Existing-home sales in the Northeast grew 1.6% from July to an annual rate of 630,000 in August, down 13.7% from August 2021. The median price in the Northeast was $413,200, an increase of 1.5% from the previous year.
Existing-home sales in the Midwest fell 3.3% from the prior month to an annual rate of 1,160,000 in August, retreating 15.9% from August 2021. The median price in the Midwest was $287,900, up 6.6% from the previous year
First-time buyers were responsible for 29% of sales in August, consistent with July 2022 and August 2021. NAR’s 2021 Profile of Home Buyers and Sellers – released in late 2021 – reported that the annual share of first-time buyers was 34%.
All-cash sales accounted for 24% of transactions in August, the same share as in July, but up from 22% in August 2021.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in August, up from 14% in July and 15% in August 2021.
Nationally, the total housing inventory registered at the end of August was 1,280,000 units, a decrease of 1.5% from July and unchanged from the previous year. Unsold inventory sits at a 3.2-month supply at the current sales pace – identical to July and up from 2.6 months in August 2021.
“Inventory will remain tight in the coming months and even for the next couple of years,” Yun added. “Some homeowners are unwilling to trade up or trade down after locking in historically-low mortgage rates in recent years, increasing the need for more new-home construction to boost supply.”
Realtor.com®‘s Market Trends Report in August shows that the largest year-over-year median list price growth occurred in Miami (+33.4%), Memphis (+25.8%), and Milwaukee (+25.0%). Phoenix reported the highest increase in the share of homes that had their prices reduced compared to last year (+30.9 percentage points), followed by Austin (+24.8 percentage points) and Las Vegas (+24.4 percentage points).
“In a sense, we’re seeing a return to normalcy with the home buying process as it relates to home inspections and appraisal contingencies, as those crazy bidding wars have essentially stopped,” said NAR President Leslie Rouda Smith, a REALTOR® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “In an ever-changing market, REALTORS® help consumers successfully manage the complexities of buying or selling homes.”
The numbers reported for local sales include residential property in Allegan, Berrien, Cass, and the westerly two-thirds 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 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.