ST. JOSEPH, MI – “The housing market across SWMI had a record year in 2020, even with the pandemic setbacks. The inventory of houses for sale reached record low numbers for buyers in Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren counties,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “January usually tends to be the least productive month of any given year. January 2021 ended with setting new all-time records for sales, selling prices, and total dollar volume in the year-over-year comparison that dates back to 2006.”
“Homebuyers kept the market momentum going in January, closing on 271 houses compared to 190 houses in January 2020 for a 45 percent increase. The previous record for sales in January was 206 in 2006 and 203 in 2017,” Jeffries said.
The average selling price increased 35 percent to $297,517 from $220,881 in January 2020, which was the previous record price.
The median selling price rose 17 percent from January 2020 ($198,000 vs. $168,750). The January 2020 median selling price was also the previous record price.
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 at $80,627,175 sky-rocketed 92 percent over $41,967,468 total dollar volume in January 2020. The highest total dollar volume previously was $43,498,631 in January 2017.
The number of bank-owned or foreclosed homes as a percentage of all transactions was 4 percent in January or ten houses. This was the lowest percentage in the year-over-year comparison. In January 2020, the percentage was 7 percent. The highest percentage in January was 57 percent in 2009.
“The unfortunate side of record sales means there was a record-setting drop in the inventory of houses for sale. At the end of January, there were just 665 houses for sale. This is the number of listings for sale across Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren counties. At 665 houses, the market had a 2.5-months supply of homes for sale compared to 4.7-months supply in January 2020 when there were 1178 houses for sale. The 2.5-months supply inventory level set a new record for the lowest in the year-over-year comparison. In 2010, there were 2733 houses on the market,” Jeffries reported.
Locally, the mortgage rate increased slightly to 2.891 from 2.888 in December 2020. Last year in January, the rate was 3.589. Nationally, the Freddie Mac mortgage rate in January was 2.73 versus 2.67 in December for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Existing-home sales rose in January, marking two consecutive months of growth. From a month-over-month perspective, buying activity varied in the major regions. Year-over-year, all four areas recorded double-digit gains in January.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, increased 0.6% from December to a seasonally-adjusted annual rate of 6.69 million in January. Sales in total climbed year-over-year, up 23.7% from a year ago (5.41 million in January 2020).
“Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market,” said Lawrence Yun, NAR’s chief economist. “Sales easily could have been even 20% higher if there had been more inventory and more choices.”
The median existing-home price for all housing types in January was $303,900, up 14.1% from January 2020 ($266,300), as prices increased in every region. January’s national price jump marks 107 straight months of year-over-year gains.
Regionally, compared to one year prior, median home prices rose at double-digit rates in each of the four major regions.
Existing-home sales in the Midwest inched up 1.9% to an annual rate of 1,570,000 in January, a 22.7% jump from a year ago. The median price in the Midwest was $227,800, a 14.7% increase from January 2020.
Whereas much of the economy has suffered due to COVID-19, the housing sector has been one of the few bright spots, according to Yun. In NAR’s latest quarterly report, released last week, home prices in every tracked U.S. metro area increased during the fourth quarter of 2020.
“Home sales are continuing to play a part in propping up the economy,” Yun said. “With additional stimulus likely to pass and several vaccines now available, the housing outlook looks solid for this year.”
Yun says he expects more jobs to return, which will spur homebuying in the coming months. He predicts existing-home sales will reach at least 6.5 million in 2021, even as he says mortgage rates are likely to inch higher due to the rising budget deficit and higher inflation.
First-time buyers were responsible for 33% of sales in January, up from 31% in December 2020 and from 32% in January 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 sales, purchased 15% of homes in January, up modestly from 14% in December 2020, but down from 17% in January 2020. All-cash sales accounted for 19% of transactions in January, unchanged from December but down from 21% in January 2020.
Nationally, the total housing inventory at the end of January amounted to 1.04 million units, down 1.9% from December and down 25.7% from one year ago (1.40 million). Unsold inventory sits at a 1.9-month supply at the current sales pace, equal to December’s supply and down from the 3.1-month amount recorded in January 2020. NAR first began tracking the single-family home supply in 1982.
“This year, more than ever, we are prepared and eager to help families and neighbors secure housing,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby’s International Realty. “NAR is working to close the racial homeownership gap, secure equal access to housing for all Americans and address housing affordability issues plaguing communities across the country.”
Oppler, citing NAR’’s recent Snapshot of Race and Home Buying in America, which reported wide differences in homeownership rates across racial groups, said more work is needed.
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.