2023 SWMI & National Housing Market –
“The housing market in March picked up steam compared to the first two months of the year. However, at the close of the first quarter of 2023, the numbers show that the market’s previous sales frenzy and across-the-board record-setting sales and selling prices have settled to pre-peak years activity.,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “In March 2023, the number of houses sold fell to 236 from 244 sold in March 2022, for a 3 percent decrease. At the end of the first quarter in 2023, 545 houses were sold, compared to 622 in March 2022, for a 12 percent decline in sales.”
The inventory of houses for sale gained 15 percent from a year ago (612 vs. 530), bringing the inventory of houses for sale up to 3.2-months of inventory available for buyers compared to 2.2 months of inventory in March 2022. The current inventory is low for the market area. Looking back at previous years, the market had a 4.9-months supply of houses for sale in March 2020, and going back further in the year-over-year comparison, in March 2010, there were 2969 houses for sale for a 14.7-months supply of houses for buyers.
The average selling price in March 2023 was $321,345 compared to $313,205 in March 2022, for a 3 percent increase. At the end of the first quarter, the average selling price in March 2023 slipped 4 percent from March 2022 ($299,667 vs. $312,013).
The median selling price in March 2023 at $233,500 set the only record as the highest price in the year-over-year comparison that dates back 2006. Year-to-date, the median selling price decreased by $1,000 ($219,000 vs. $220,000).
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
The drop in sales lowered the total dollar volume by just 1 percent in March 2023 ($75,837,608 vs. $76,422,149). The year-to-date total dollar volume dropped 16 percent at the end of the first quarter ($163,318,594 vs. $194,072,341).
The number of bank-owned or foreclosed homes as a percentage of all transactions was 3 percent, up from 2 percent in February and the same as in January 2023. The previous lowest percentage was 3 percent in March 2021, and the highest percentage in March was 60 percent in 2009.
The Freddie Mac mortgage rate in March was 6.32, down from 6.50 in February for a 30-year conventional mortgage. A year ago, the rate was 4.67.
According to the National Association of Realtors®, existing-home sales edged lower in March. Month-over-month sales declined in three out of four major U.S. regions, while sales in the Northeast remained steady. All regions posted year-over-year decreases.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, fell 2.4% from February to a seasonally adjusted annual rate of 4.44 million in March. Year-over-year, sales waned 22.0% (down from 5.69 million in March 2022).
“Home sales are trying to recover and are highly sensitive to changes in mortgage rates,” said NAR Chief Economist Lawrence Yun. “Yet, at the same time, multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand. It’s a unique housing market.”
The median existing-home price for all housing types in March was $375,700, a decline of 0.9% from March 2022 ($379,300). Prices climbed slightly in three regions but dropped in the West.
In the Midwest, existing-home sales retracted 5.5% from one month ago to an annual rate of 1.03 million in March, falling 17.6% from the previous year. The median price in the Midwest was $273,400, up 1.7% from March 2022.
“As documented in NAR’s recent report about housing wealth gains by homeowners over the last decade, homeownership offers a road to financial security and wealth development,” said NAR President Kenny Parcell, a Realtor® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “Rely on a Realtor® to provide sound advice while purchasing your first home or next home.”
First-time buyers accounted for 28% of sales in March, up from 27% in February but down from 30% in March 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 27% of transactions in March, down from 28% in February and one year ago.
Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in March, down from 18% in February and the previous year.
The total housing inventory registered at the end of March was 980,000 units, up 1.0% from February and 5.4% from one year ago (930,000). Unsold inventory sits at a 2.6-month supply at the current sales pace, unchanged from February but up from 2.0 months in March 2022.
“Home prices continue to rise in regions where jobs are being added, and housing is relatively affordable,” Yun noted. “However, the more expensive areas of the country are adjusting to lower prices.”
“With overall consumer price inflation calming and rents expected to decelerate from robust apartment construction, the Federal Reserve’s monetary policy will surely shift from tightening to neutral to possibly loosening over the next 12 months,” Yun added. “Therefore, home sales will steadily rebound despite several months of fluctuations.”
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.