“The housing market across SWMI has run at a record pace for the last five years. January 2022 started with a record low inventory of houses for sale at 514 houses for buyers in Allegan, Berrien, Cass, and the westerly two-thirds 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.”
“January 2022 closed with a 23 percent drop in sales from January 2021 (210 vs. 271),” Jeffries said.
The average selling price increased just 1 percent to $301,017 from $297,517 in January 2021, the highest average selling price in the year-over-year comparison.
The January median selling price set the new record rising 6 percent from January 2021 ($210,000 vs.$198,000). The January 2021 median selling price was 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 $63,213,613 was down 22 percent from the record-setting total dollar volume of $80,627,175 collected in January 2021.
There were no bank-owned or foreclosed homes as a percentage of all transactions in January. The highest percentage in January was 57 percent in 2009.
“At the end of January 2022, there were just 470 houses for sale, down from 665 in January 2021. This is the number of listings for sale across Allegan, Berrien, Cass, and the westerly two-thirds of Van Buren counties. At 470 houses, the market had a 1.9-months supply of homes for sale compared to a 2.5-months supply in January 2021. The 1.9-months supply inventory level set a new low record for houses on the market,” Jeffries reported.
Nationally, in January, the Freddie Mac mortgage rate was 3.55, up from 3.11 in December 2021 for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Existing-home sales rose in January, making a notable move upward following a previous month where sales declined. On a month-over-month basis, each of the four major U.S. regions experienced an increase in sales in January. However, year-over-year, activity was mixed as two regions reported sagging sales, another watched sales increase, and a fourth region remained flat.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, climbed 6.7% from December to a seasonally adjusted annual rate of 6.50 million in January. Year-over-year, sales fell 2.3% (6.65 million in January 2021).
“Buyers were likely anticipating further rate increases and locking-in at the low rates, and investors added to overall demand with all-cash offers,” said Lawrence Yun, NAR’s chief economist. “Consequently, housing prices continue to move solidly higher.”
The median existing-home price for all housing types in January was $350,300, up 15.4% from January 2021 ($303,600), as prices rose in each region. This marks 119 consecutive months of year-over-year increases, the longest-running streak on record.
Regionally, existing-home sales in the Northeast grew 6.8% in January, posting an annual rate of 780,000, an 8.2% decline from January 2021. The median price in the Northeast was $382,800, up 6.0% from one year ago.
Existing-home sales in Midwest rose 4.1% from the prior month to an annual rate of 1,510,000 in January, equal to the level seen from a year ago. The median price in the Midwest was $245,900, a 7.8% rise from January 2021.
First-time buyers were responsible for 27% of sales in January, down from 30% in December and down from 33% in January 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%.
Yun explained that the forthcoming increase in mortgage rates would be problematic for at least two market segments.
“First, some moderate-income buyers who barely qualified for a mortgage when interest rates were lower will now be unable to afford a mortgage,” he said. “Second, consumers in expensive markets, such as California and the New York City metro area, will feel the sting of nearly an additional $500 to $1000 in monthly payments due to rising rates.”
Individual investors or second-home buyers, who account for many cash sales, purchased 22% of homes in January, up from 17% in December and from 15% in January 2021. All-cash sales accounted for 27% of transactions in January, up from 23% in December and from 19% in January 2021.
Nationally, the total housing inventory at the end of January amounted to 860,000 units, down 2.3% from December and down 16.5% from one year ago (1.03 million). Unsold inventory sits at a 1.6-month supply at the current sales pace, down from 1.7 months in December and from 1.9 months in January 2021.
“The inventory of homes on the market remains woefully depleted, and in fact, is currently at an all-time low,” Yun said.
According to Yun, homes priced at $500,000 and below are disappearing, while supply has risen at the higher price range. He noted that such increases would continue to shift the mix of buyers toward high-income consumers.
“There are more listings at the upper end – homes priced above $500,000 – compared to a year ago, which should lead to less hurried decisions by some buyers,” Yun added. “Clearly, more supply is needed at the lower end of the market in order to achieve more equitable distribution of housing wealth.”
“The market is still thriving as an abundance of home sales took place in January,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “We will continue to beat the drum for more inventory, which will give buyers additional options and will also help alleviate increasing costs.”
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.