“In July, the housing market sales dropped 19 percent behind from a year ago while the selling prices increased and set records when compared to previous years. The robust market continued even with a 37 percent drop in inventory of houses for sale,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “In July, at 388, the number of houses sold fell 19 percent below the 479 houses sold in July 2020. Year-to-date, the number of houses sold at the end of July was 2132, up 22 percent over July 2020 (2132 vs.1748). This notched a new sales record in the year-over-year sales records since 2006.”
Selling prices continued to set new record levels each month in 2021. The average selling price in July 2021 was $351,131 compared to $337,697 in July 2020, for a 4 percent increase. Year-to-date selling prices at the end of July also set records in the year-over-year comparison. The year-to-date average selling price in July 2021 rose 19 percent over July 2020 ($321,074 vs. $268,934).
The median selling price in July 2021 increased 5 percent to $240,500 from $230,000 in July 2020. Year-to-date, the median selling price climbed 13 percent ($225,000 vs. $200,000). The median selling price and year-to-date median selling price also set new record prices in the month of July 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 inventory of houses for sale plummeted 37 percent from a year ago (889 vs. 1399), bringing the inventory of houses for sale to a 3.1-months supply of inventory available for buyers. This is the highest inventory level this year. At the end of July 2020, the market had a 6.6-months supply of houses for sale. For comparison, in July 2009, there were 3661 houses for sale and an 18.1-months supply of inventory.
The total dollar volume dropped 16 percent in July 2021 ($136,238,880 vs.161,759,996). Due to the number of sales at higher prices, the year-to-date total dollar volume set new records for the dollar volume at the end of July ($684,530,317 vs.$470,098,082). The year-to-date total dollar volume rose 46 percent.
The number of bank-owned or foreclosed homes as a percentage of all transactions stayed at 1 percent in July, which it was in June and May. This was the lowest percentage in 2021. In January, the rate was 4 percent. The previous lowest percentage in July was 1 percent in 2020. The highest percentage in July was 35 percent in 2009.
We can no longer report the local mortgage due to the difficulty in obtaining rates from lenders. Nationally, the Freddie Mac mortgage rate in July was 2.8, down slightly from 2.98 in June for a 30-year conventional mortgage.
According to the National Association of Realtors®, sales rose in July, marking two consecutive months of increases. Three of the four major U.S. regions recorded modest month-over-month gains, and the fourth remained level. Figures varied from a year-over-year perspective as two regions saw gains, one witnessed a decline, and one was unchanged.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, grew 2.0% from June to a seasonally adjusted annual rate of 5.99 million in July. Sales inched up year-over-year, increasing 1.5% from a year ago (5.90 million in July 2020).
“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” said Lawrence Yun, NAR’s chief economist. “Much of the home sales growth is still occurring in the upper-end markets, while the mid-to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”
The median existing-home price for all housing types in July was $359,900, up 17.8% from July 2020 ($305,600), as each region saw prices climb. This marks 113 straight months of year-over-year gains.
“Although we shouldn’t expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to improve gradually,” said Yun.
“In the meantime, some prospective buyers who are priced out are raising the demand for rental homes and thereby pushing up the rental rates,” he added.
Existing-home sales in the Midwest rose 3.8% to an annual rate of 1,380,000 in July, a 1.4% decline from a year ago. The median price in the Midwest was $275,300, a 13.1% increase from July 2020.
“As more homes come on the market, opportunities for prospective buyers continue to increase in regions across the country,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby’s International Realty. “But even though we are beginning to see some normalcy return, NAR continues to work alongside legislators and policymakers to ensure we are doing everything we can to boost the supply of safe, affordable housing in America.”
First-time buyers accounted for 30% of sales in July, down from 31% in June and down from 34% in July 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 July, up from 14% in June but even with 15% from July 2020. All-cash sales accounted for 23% of transactions in July, even with June, and up from 16% in July 2020.
Nationally, the total housing inventory at the end of July totaled 1.32 million units, up 7.3% from June’s supply and down 12.0% from one year ago (1.50 million). Unsold inventory sits at a 2.6-month supply at the present sales pace, up slightly from the 2.5-month figure recorded in June but down from 3.1 months in July 2020.
The numbers reported for local sales include residential property in Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren Counties. They 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.