“At the end of the first quarter of 2022, the local housing market has slowed down from the robust new sales records in the year-over-year comparison that looks back to 2006. The average selling price from February 2022 to March 2022 decreased 3 percent from $324,027 to $313,205. The number of houses sold in February was 168, and in March, 244 houses were sold for a 45 percent increase from one month to the next,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “In March, the number of houses sold slipped to 244 from 278 sold in March 2021, for a 12 percent decrease. At the end of the first quarter in 2021, 749 houses were sold, the current sales record, compared to 622 in March 2022 for a 17 percent decline in sales.”
“The inventory of houses for sale dropped 20 percent from a year ago (530 vs. 665), bringing the inventory of houses for sale down to 2.2-months of inventory available for buyers and down from 2.5 months of inventory in March 2021. 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,” Jeffries said.
Selling prices may be starting to adjust. The average selling price in March 2022 was $313,205 compared to $335,662 in March 2021, for a 7 percent decrease. At the end of the first quarter, year-to-date selling prices set records in the year-over-year comparison. The year-to-date average selling price in March 2022 increased 3 percent over March 2021 ($312,013 vs. $303,233 ).
The median selling price in March 2022 increased 10 percent to $223,700 from $202,875 in March 2021. Year-to-date, the median selling price rose 11 percent ($220,000 vs. $198,000). 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.
The record-setting selling prices were not enough to keep the total dollar volume from sinking 18 percent in March 2022 ($76,422,149 vs. $93,314,197). The year-to-date total dollar volume dropped 15 percent at the end of the first quarter ($194,072,341 vs. $227,114,925).
The number of bank-owned or foreclosed homes as a percentage of all transactions was 2 percent, down from 3 percent in February. In January, the rate was 0 percent. The previous lowest percentage was 3 percent in March 2021, and the highest percentage in March was 60 percent in 2009
Nationally, in March, the Freddie Mac mortgage rate was 4.67, up from 3.89 in February for a 30-year conventional mortgage. 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 decreased in March, marking two consecutive months of declines. Month-over-month, sales in March waned in three of the four major U.S. regions while holding steady in the West. Sales were down across each region year-over-year.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, dipped 2.7% from February to a seasonally adjusted annual rate of 5.77 million in March. Year-over-year, sales fell 4.5% (6.04 million in March 2021).
“The housing market is starting to feel the impact of sharply rising mortgage rates and higher inflation taking a hit on purchasing power,” said Lawrence Yun, NAR’s chief economist.
“Still, homes are selling rapidly, and home price gains remain in the double-digits.”
With mortgage rates expected to rise further, Yun predicts transactions to contract by 10% this year, for home prices to readjust, and for gains to grow around 5%.
The median existing-home price for all housing types in March was $375,300, up 15.0% from March 2021 ($326,300), as prices rose in each region. This marks 121 consecutive months of year-over-year increases, the longest-running streak on record.
“Home prices have consistently moved upward as supply remains tight,” Yun said. “However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside.”
Regionally, existing-home sales in the Northeast slid 2.9% in March, recording an annual rate of 670,000, an 11.8% fall from March 2021. The median price in the Northeast was $390,200, up 6.8% from one year ago.
Existing-home sales in Midwest declined 4.5% from the prior month to an annual rate of 1,270,000 in March, a 3.1% drop from March 2021. The median price in the Midwest was $271,000, a 10.4% jump from March 2021.
First-time buyers were responsible for 30% of sales in March, up from 29% in February and down from 32% in March 2021. NAR’s 2021 Profile of Home Buyers and Sellers – released in late 2021 – reported that the annual share of first-time buyers was 34%.
“It appears first-time homebuyers are still looking to lock in at current mortgage rates before they inevitably increase,” Yun said.
Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in March, down from 19% in February but up from 15% in March 2021. All-cash sales accounted for 28% of transactions in March, up from both the 25% recorded in February and from 23% in March 2021.
“With rising mortgage rates, cash sales made up a larger fraction of transactions, climbing to the highest share since 2014,” Yun said.
Nationally, the total housing inventory at the end of March totaled 950,000 units, up 11.8% from February and down 9.5% from one year ago (1.05 million). Unsold inventory sits at a 2.0-month supply at the current sales pace, up from 1.7 months in February and down from 2.1 months in March 202.
Realtor.com®‘s Market Trends Report in March shows that the greatest year-over-year median list price growth occurred in Miami (+37.0%), Las Vegas (+35.2%), and Tampa (+32.0%). Austin posted the highest growth in the share of homes that had their prices reduced compared to last year (+2.9 percentage points), followed by Sacramento and Memphis (+2.3 percentage points).
“Finding the right home in this market – from making an offer to eventually buying – is an intense process,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “The current state of housing is indeed one of the most competitive markets that I have witnessed, but with patience and the assistance of a trusted Realtor®, the outcome can be very rewarding.”
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.