ST. JOSEPH, MI – “After a record-breaking start in January, the Southwest Michigan’s housing market slowed down in February with fewer houses sold and lower selling prices. However, comparing February 2021 to February 2020, market numbers were 5 percent to 63 percent higher. So, for the first two months of this year, the market has outpaced 2020, which we proclaimed to be the new peak year in our year-over-year comparison,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “The number of houses sold in February increased 10 percent to 200 from 181 sold in February 2020. The number of houses sold did not set a record in the year-over-year comparison. The previous highest number of houses sold was 235 in February 2019.
Year-to-date, February sales did set a record at 471 houses sold and was a 27 percent increase over February 2020 (471 vs. 371).”
The average selling price in February 2021 was $265,892 compared to $222,938 in February 2020, up 19 percent. Year-to-date, the average selling price jumped 28 percent ($284,092 vs. $221,885). The average selling price and year-to-date average selling price set new record prices in the month of February in the year-over-year comparison.
The median selling price in February 2021 increased 5 percent to $191,000 from $182,500 in February 2020. Year-to-date, the median selling price climbed 13 percent ($195,750 vs. $173,000). The median selling price and year-to-date median selling price also set new record prices in the month of February 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 total dollar volume rose 32 percent in February 2021 ($53,178,553 vs. $40,351,946). The year-to-date total dollar volume soared 63 percent ($133,807,728 vs. $82,319,414). Both the monthly and year-to-date dollar volumes set new records in the year-over-year comparison.
The inventory of houses for sale fell 48 percent to a record low 2.4-months supply at the end of February (629 vs. 1201). This level set an unwelcomed record for buyers. For comparison, in February 2009, there were 3099 houses for sale.
The number of bank-owned or foreclosed homes as a percentage of all transactions was 3 percent. The previous low percentage was 6 percent in February 2019. The highest percentage in February was 75 percent in 2009.
Locally, the mortgage rate was 2.958 in February, up from 2.891 in January. Last year in February, the rate was 3.438. Nationally, the Freddie Mac mortgage rate in February was 2.97up from 2.73 in January for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Existing-home sales declined in February, following two prior months of gains. Month-over-month, only one major region saw an increase in February, but all four U.S. regions recorded year-over-year gains.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, decreased 6.6% from January to a seasonally-adjusted annual rate of 6.22 million in February. Sales in total climbed year-over-year, up 9.1% from a year ago (5.70 million in February 2020).
“Despite the drop in home sales for February – which I would attribute to historically-low inventory – the market is still outperforming pre-pandemic levels,” said Lawrence Yun, NAR’s chief economist.
He cautioned of a possible slowdown in growth in the coming months as higher prices and rising mortgage rates will cut into home affordability.
“I still expect this year’s sales to be ahead of last year’s, and with more COVID-19 vaccinations being distributed and available to larger shares of the population, the nation is on the cusp of returning to a sense of normalcy,” Yun said. “Many Americans have been saving money and there’s a strong possibility that once the country fully reopens, those reserves will be unleashed on the economy.”
The median existing-home price for all housing types in February was $313,000, up 15.8% from February 2020 ($270,400), as prices rose in every region. February’s national price jump marks 108 straight months of year-over-year gains.
“Home affordability is weakening,” Yun said. “Various stimulus packages are expected, and they will indeed help, but an increase in inventory is the best way to address surging home costs.”
Regionally, compared to one year ago, median home prices increased in each of the four major regions.
Existing-home sales in the Midwest dropped 14.4% to an annual rate of 1,310,000 in February, a 2.3% rise from a year ago. The median price in the Midwest was $231,800, a 14.2% climb from February 2020.
First-time buyers were responsible for 31% of sales February, down from 33% in January and from 32% in February 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%.
Individual investors or second-home buyers, who account for many cash sales17% of homes in February, up from 15% in January and equal to the percentage from February 2020. All-cash sales accounted for 22% of transactions in February, up from both 19% in January and from 20% in February 2020.
Nationally, the total housing inventory at the end of February amounted to 1.03 million units, equal to January’s inventory and down 29.5% from one year ago (1.46 million). Unsold inventory sits at a 2.0-month supply at the current sales pace, slightly up from January’s 1.9-month supply and down from the 3.1-month amount recorded in February 2020. NAR first began tracking the single-family home supply in 1982.
“This year, we’ve seen fair housing protections extended, recognized Realtors® remarkable volunteerism, and are collaborating with policymakers to increase revitalization endeavors in numerous neighborhoods,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby’s International Realty. “We have made an incredible amount of notable progress thus far in 2021, and NAR is committed and encouraged to continue those efforts.”
The numbers reported for local sales include residential property in Allegan, 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 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.