“At the end of the first quarter of 2021, the local housing market continues to keep its robust pace while selling prices increased monthly and setting new records in the year-over-year comparison that looks back to 2006. The average selling price from February 2021 to March 2021 increased 26 percent from $265,892 to $335,662. The number of houses sold in February was 200, and in March, 278 houses were sold for a 39 percent increase from one month to the next month,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “In March, the number of houses sold slipped to 278 from 285 sold in March 2020, for a 3 percent decrease. At the end of the first quarter in 2021, 749 houses have been sold, a new sales record. The previous record was 675 houses occurred at the end of the first quarter of 2017.”
The inventory of houses for sale dropped 45 percent from a year ago(665 vs. 1214), bringing the inventory of houses for sale down to 2.5-months of inventory available for buyers. At the end of the first quarter in 2020, the Market had a 4.9-months supply of houses for sale. For comparison, in March 2009, there were 2969 houses for sale.
Selling prices have set new record levels each month in 2021. The average selling price in March 2021 was $335,662 compared to $221,734 in March 2020. for a 51 percent increase. Year-to-date selling prices at the end of the first quarter also set records in the year-over-year comparison. The year-to-date average selling price in March 2021 increased 37 percent over March 2020 ($303,233 vs. $221,825).
The median selling price in March 2021 increased 13 percent to $202,875 from $180,000 in March 2020. Year-to-date, the median selling price soared 13 percent ($198,000 vs. $175,000). The median selling price and year-to-date median selling price also set new record prices in the month of March 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.
Even with fewer houses sold, the record-setting selling prices pushed the total dollar volume up 72 percent in March 2021 ($93,314,197 vs. $54,103,134). The monthly and year-to-date total dollar volume set new records for the dollar volume at the end of the first quarter ($227,114,925 vs. $136,422,547).
The number of bank-owned or foreclosed homes as a percentage of all transactions was 3 percent in February and stayed the same in March. In January, the rate was 4 percent. The previous lowest percentage was 7 percent in March 2018. The highest percentage in March was 60 percent in 2009.
Locally, the mortgage rate 3.146, was down from 3.18 in February. Last year in March, the rate was 3.635. Nationally, the Freddie Mac mortgage rate in March was 3.18, up slightly from 2.97 in February for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Existing-home sales fell in March, marking two consecutive months of declines. The month of March saw record-high home prices and gains. While each of the four major U.S. regions experienced month-over-month drops, all four areas welcomed year-over-year gains in home sales.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, decreased 3.7% from February to a seasonally-adjusted annual rate of 6.01 million in March. Sales overall climbed year-over-year, up 12.3% from a year ago (5.35 million in March 2020).
“Consumers are facing much higher home prices, rising mortgage rates, and falling affordability; however, buyers are still active in the market,” said Lawrence Yun, NAR’s chief economist.
“The sales for March would have been measurably higher had there been more inventory,” he added. “Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”
Yun said although mortgage rates have risen a tick, they are still at a favorable level, and the economic outlook is promising.
“At least half of the adult population has received a COVID-19 vaccination, according to reports, and recent housing starts and job creation data show encouraging dynamics of more supply and strong demand in the housing sector.”
The median existing-home price for all housing types in March was $329,100, up 17.2% from March 2020 ($280,700), as prices increased in every region. March’s national price jump marks 109 straight months of year-over-year gains.
In comparison to one year ago, median home prices rose in each of the four major regions.
Existing-home sales in the Midwest declined 2.3% to an annual rate of 1,280,000 in March, a 0.8% rise from a year ago. The median price in the Midwest was $248,200, a 13.5% increase from March 2020.
“NAR has made it a priority to be at the forefront of the anticipated economic revival,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby’s International Realty. “We will continue pushing for an increase in housing construction and inventory, with the goal of helping qualified buyers and countless families achieve the American Dream of homeownership.”
First-time buyers were responsible for 32% of sales in March, up from 31% in February and down from 34% in March 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 purchases purchased 15% of homes in March, down from 17% in February and up from 13% in March 2020. All-cash sales accounted for 23% of transactions in March, up from both 22% in February and from 19% in March 2020.
Nationally, the total housing inventory at the end of March amounted to 1.07 million units, up 3.9% from February’s inventory and down 28.2% from one year ago (1.49 million). Unsold inventory sits at a 2.1-month supply at the current sales pace, marginally up from February’s 2.0-month supply and down from the 3.3-month supply recorded in March 2020. Inventory numbers continue to represent near-historic lows; NAR first began tracking the single-family home supply in 1982.
“Without an increase in supply, the society wealth division will widen with homeowners enjoying sizable equity gains while renters will struggle to become homeowners,” Yun said.
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.