“The housing market race is still on, and the only sign of a bump in the road is the 49 percent drop in the number of houses for sale at the end of June. The record-setting for selling prices and total dollar volume continued, with June 2021 becoming the highest in the year-over-year comparison that dates back to 2006,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “In June, at 349, the number of houses soared past the 318 houses sold in June 2020 by 10 percent. However, the record number of houses sold in June in the year-over-year reached 388 in June 2017 and 2006, both peak years. At the end of June, 1744 houses have sold, which was a new sales record. In June 2020, 1269, houses were sold, which was 37 percent less than this year.”
With the race on, selling prices continue to set new record levels each month in 2021. The average selling price in June 2021 was $330,887 compared to $ 300,418 in June 2020, for a 10 percent increase. Year-to-date selling prices at the end of June also set records in the year-over-year comparison. The year-to-date average selling price in June 2021 rose 29 percent over June 2020 ($314,387 vs. $242,978).
The median selling price in June 2021 increased 2 percent to $240,000 from $234,250 in June 2020. Year-to-date, the median selling price climbed 70 percent ($319,900 vs. $187,900). The median selling price and year-to-date median selling price also set new record prices in the month of May 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 49 percent from a year ago (812 vs. 1500), bringing the inventory of houses for sale to a 2.8-months supply of inventory available for buyers. This is the first time the available inventory has risen above 2.5-months supply this year. At the end of June 2020, the market had a 6.7-months supply of houses for sale. For comparison, in May 2009, there were 3679 houses for sale and a 16.9-months supply of inventory.
The total dollar volume rose 21 percent in June 2021 ($115,479,891vs. $95,532,984). Due to the number of sales at higher prices, the monthly and year-to-date total dollar volume set new records for the dollar volume at the end of June ($548,290,941vs.$308,340,086). The year-to-date total dollar volume rose 73 percent.
The number of bank-owned or foreclosed homes as a percentage of all transactions dropped to 1 percent in May and remained at 1 percent in June. This was the lowest percentage in 2021. In January, the rate was 4 percent. The previous lowest percentage was 1 percent in June 2020. The highest percentage in June was 17 percent in 2013.
Locally, the mortgage rate was 3.083, down slightly from 3.088 in May. Last year in June, the rate was 3.253. Nationally, the Freddie Mac mortgage rate in June was 2.98, up slightly from 2.95 in May for a 30-year conventional mortgage.
According to the National Association of Realtors®, existing-home sales increased in June, snapping four consecutive months of declines. Three of the four major U.S. regions registered small month-over-month gains, while the fourth remained flat. However, all four areas notched double-digit year-over-year gains.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, grew 1.4% from May to a seasonally adjusted annual rate of 5.86 million in June. Sales climbed year-over-year, up 22.9% from a year ago (4.77 million in June 2020).
“Supply has modestly improved in recent months due to more housing starts and existing homeowners listing their homes, all of which has resulted in an uptick in sales,” said Lawrence Yun, NAR’s chief economist. “Home sales continue to run at a pace above the rate seen before the pandemic.”
The median existing-home price for all housing types in June was $363,300, up 23.4% from June 2020 ($294,400), as every region recorded price jumps. This marks 112 straight months of year-over-year gains.
“At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year,” Yun said. “Ideally, the costs for a home would rise roughly in line with income growth, which is likely to happen in 2022 as more listings and new construction become available.”
Existing-home sales in the Midwest rose 3.1% to an annual rate of 1,330,000 in June, an 18.8% increase from a year ago. The median price in the Midwest was $278,700, an 18.5% increase from June 2020.
“NAR continues our conversations with policymakers and leaders from across the industry in an effort to boost housing inventory and increase access to safe, affordable housing for all Americans,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby’s International Realty. “As the nation’s economy continues to recover from COVID-19, securing policies that are in the best interest of U.S. consumers and homeowners remains NAR’s priority.”
First-time buyers were responsible for 31% of sales in June, also even with May but down from 35% in June 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 14% of homes in June, down from 17% in May, and up from 9% in June 2020. All-cash sales accounted for 23% of transactions in June, even with May and up from 16% in June 2020.
“Huge wealth gains from both housing equity and the stock market have nudged up all-cash transactions, but first-time buyers who need mortgage financing are being uniquely challenged with record-high home prices and low inventory,” Yun explained. “Although rates are favorably low, these hurdles have been overwhelming to some potential buyers.”
Nationally, the total housing inventory at the end of June amounted to 1.25 million units, up 3.3% from May’s inventory and down 18.8% from one year ago (1.54 million). Unsold inventory sits at a 2.6-month supply at the current sales pace, modestly up from May’s 2.5-month supply but down from 3.9 months in June 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.