“Southwest Michigan’s housing market is adjusting to an extremely low inventory of houses for sale. The number of houses sold in February dropped 16 percent from February 2021(168 vs. 200) and 20 percent from January 2022 sales of 210. The level of sales in February was the lowest since February 2014,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “So, for the first two months of this year, the market was down 20 percent, with sales at 378 compared to 471 in February 2021which was the highest year-to-date sales in our year-over-year comparison..”
“The inventory of houses for sale fell 24 percent to a record low 2.0-months supply at the end of February (480 vs. 629). This level set an unwelcomed record 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,” Jeffries said.
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 that dates back to 2006.
In February, the average selling price was $324,027 compared to $265,892 in February 2021, up 22 percent. Year-to-date, the average selling price jumped 10 percent ($311,243 vs. $284,092).
The median selling price in February 2022 increased 18 percent to $224,450 from $191,000 in February 2021. Year-to-date, the median selling price also climbed 10 percent ($215,000 vs. $195,750).
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 increased 2 percent in February 2022 ($54.436,579 vs. $53,178,553). The year-to-date total dollar volume fell 12 percent ($117,650,192 vs. $133,807,728).
The number of bank-owned or foreclosed homes as a percentage of all transactions was 2 percent (3 houses), and the previous low percentage was 3 percent in February 2021. The highest percentage in February was 75 percent in 2009.
The Freddie Mac mortgage rate in February was 3.89, up from 3.55 in January for a 30-year conventional mortgage. A year ago, the rate was 2.97.
According to the National Association of Realtors®, – Existing-home sales dipped in February, continuing a seesawing pattern of gains and declines over the last few months. Each of the four major U.S. regions saw sales fall on a month-over-month basis in February. Sales activity year-over-year was also down overall, though the South experienced an increase while the remaining three regions reported drops in transactions.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, sank 7.2% from January to a seasonally adjusted annual rate of 6.02 million in February. Year-over-year, sales decreased 2.4% (6.17 million in February 2021).
“Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” said Lawrence Yun, NAR’s chief economist. “Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate.”
“Monthly payments have risen by 28% from one year ago – which interestingly is not a part of the consumer price index – and the market remains swift with multiple offers still being recorded on most properties.”
The median existing-home price for all housing types in February was $357,300, up 15.0% from February 2021 ($310,600), as prices grew in each region. This marks 120 consecutive months of year-over-year increases, the longest-running streak on record.
Regionally, existing-home sales in the Northeast slipped 11.5% in February, registering an annual rate of 690,000, a 12.7% drop from February 2021. The median price in the Northeast was $383,700, up 7.1% from one year ago.
Existing-home sales in Midwest sagged 11.3% from the prior month to an annual rate of 1,330,000 in February, a 1.5% decrease from February 2021. The median price in the Midwest was $248,900, a 7.5% climb from February 2021.
First-time buyers were responsible for 29% of sales in February, up from 27% in January and down from 31% in February 2021. NAR’s 2020 Profile of Home Buyers and Sellers – released in late 2021 – reported that the annual share of first-time buyers was 34%.
Individual investors or second-home buyers, who make up many cash sales, purchased 19% of homes in February, down from 22% in January but up from 17% in February 2021. All-cash sales accounted for 25% of transactions in February, down from 27% in January and up from 22% in February 2021.
Nationally, the total housing inventory at the end of February totaled 870,000 units, up 2.4% from January and down 15.5% from one year ago (1.03 million). Unsold inventory sits at a 1.7-month supply at the current sales pace, up from the record-low supply in January of 1.6 months and down from 2.0 months in February 2021.
Yun notes that rising rates and escalating prices have prevented many consumers from making a purchase.
“The sharp jump in mortgage rates and increasing inflation is taking a heavy toll on consumers’ savings,” he said. “However, I expect the pace of price appreciation to slow as demand cools and as supply improves somewhat due to more home construction.”
Realtor.com®’s Market Trends Report in February shows that the greatest year-over-year median list price growth occurred in Las Vegas (+39.6%), Miami (+31.6%), and Tampa (+31.5%). Austin posted the highest growth in the share of homes which had their prices reduced compared to last year (+3.3 percentage points), followed by Milwaukee (+2.1 percentage points), Pittsburgh, and Baltimore (+1.4 percentage points each).
“For the past couple of years, buyers have had to contend with a market of high demand, low inventory and a mix of uncertainties with COVID-19 protocols,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “Consumers are presently challenged with higher mortgage rates, so now, more than ever, interested buyers need the trusted expertise of Realtors® in order to navigate this current market.”
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.