ST. JOSEPH, MI – “In May, the housing market showed no signs of slowing down. Numbers in May 2020, except for the number of houses sold in the month, set record increases in the year-over-year comparison that dates back to 2006. The May 2021 housing market numbers blew past last year’s numbers, and in most cases, numbers increased by percentages in the triple digits,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “In May 2021, the number of houses sold soared to 351 from 142 sold in May 2020, for a 147 percent increase. Yet this is not the highest number of houses sold in May. That record stands at 361 houses sold in May 2019. At the end of May 2021, 1395 houses have been sold, a new sales record. Last year in May, 952 houses had been sold at the end of May. The previous record was 1302 houses in May 2019..”
Selling prices continue to set new record levels each month in 2021. The average selling price in May 2021 was $306,666 compared to $240,374 in May 2020. for a 28 percent increase. Year-to-date selling prices at the end of May also set records in the year-over-year comparison. The year-to-date average selling price in May 2021 rose 38 percent over May 2020 ($310,262 vs. $ 224,160).
The median selling price in May 2021 increased 30 percent to $225,000 from $173,250 in May 2020. Year-to-date, the median selling price climbed 21 percent ($212,400 vs. $175,126). 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 48 percent from a year ago (743 vs. 1420), bringing the inventory of houses for sale down to a 2.5-months supply of inventory available for buyers. The available inventory has not risen above 2.5-months supply this year. At the end of May 2020, the market had a 6.2-months supply of houses for sale. For comparison, in May 2009, there were 3452 houses for sale and 16.4-month’s supply of inventory.
The total dollar volume skyrocketed 216 percent in May 2021 ($107,946,451 vs. $34,133,128). 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 May ($432,816,050 vs. $ 213,401,102). The year-to-date total dollar volume rose 103 percent.
The number of bank-owned or foreclosed homes as a percentage of all transactions dropped to 1 percent in May from 2 percent in April. This was the lowest percentage in 2021. In January, the rate was 4 percent. The previous lowest percentage was 6 percent in May 2020. The highest percentage in May was 34 percent in 2009.
The median selling price in April 2021 increased 12 percent to $242,500 from $186,000 in April 2020. Year-to-date, the median selling price climbed 13 percent ($209,000 vs. $177,000). The median selling price and year-to-date median selling price also set new record prices in the month of April 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 total dollar volume grew 131 percent in April 2021 ($98,499,197 vs. $42,720,427). The monthly, and year-to-date total dollar volume set new records for the dollar volume at the end of April ($324,994,599 vs. $179,142,974).
The number of bank-owned or foreclosed homes as a percentage of all transactions dropped to 2 percent in April from 3 percent in March and February. In January, the rate was 4 percent. The previous lowest percentage was 3 percent in April 2019. The highest percentage in April was 54 percent in 2009.
Locally, the mortgage rate was 3.088, down slightly from 3.114 in April. Last year in May, the rate at 3.244 was slightly higher. Nationally, the Freddie Mac mortgage rate in May was 2.95, down slightly from 2.98 in April for a 30-year conventional mortgage.
Nationally:
According to the National Association of Realtors®, Existing-home sales decreased for a fourth straight month in May, according to the National Association of Realtors®. Only one major U.S. region recorded a month-over-month increase, while the other three regions saw sales decline. However, each of the four areas again registered double-digit year-over-year gains.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, dropped 0.9% from April to a seasonally-adjusted annual rate of 5.80 million in May. Sales in total climbed year-over-year, up 44.6% from a year ago (4.01 million in May 2020).
“Home sales fell moderately in May and are now approaching pre-pandemic activity,” said Lawrence Yun, NAR’s chief economist. “Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.”
“The market’s outlook, however, is encouraging,” Yun continued. “Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes.’
The median existing home price for all housing types in May was $350,300, up 23.6% from May 2020 ($283,500), as every region registered price increases. This is a record high and marks 111 straight months of year-over-year gains since March 2012.
For the second straight month, only the Midwest experienced higher sales from the prior month.
Existing-home sales in the Midwest grew 0.8% to an annual rate of 1,290,000 in April, a 13.2% increase from a year ago. The median price in the Midwest was $259,300, a 13.5% rise from April 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 31% of sales in May, also even with April but down from 34% in May 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 17% of homes in May, even with April and up from 14% in May 2020. All-cash sales accounted for 23% of transactions in May, down from 25% in April and up from 17% in May 2020.
A new study released by NAR last week – the 2021 Vacation Home Counties Report – found that from January to April 2021, the share of vacation home sales to total existing-home sales rose to 6.7%. Vacation home sales jumped 57.2% year-over-year compared to the 20% year-over-year growth in total existing-home sales.
“The appeal of vacation homes has certainly grown during the pandemic, especially among employees permitted to work from home,” Yun said. “As businesses decide new guidelines for remote workers, even allowing permanent remote options in some cases, look for vacation homes to remain a popular option.”
Nationally, the total housing inventory at the end of May amounted to 1.23 million units, up 7.0% from April’s inventory and down 20.6% from one year ago (1.55 million). Unsold inventory sits at a 2.5-month supply at the present sales pace, marginally up from April’s 2.4-month supply but down from 4.6-months in May 2020.
“As outlined in last week’s NAR/Rosen Consulting Group report, we continue to face a dire shortage of available housing in this country,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby’s International Realty. “NAR continues its advocacy efforts to find new, creative, and effective ways to increase housing construction and supply.”
“The right policies will provide huge benefits to our nation’s economy, and our work to close this gap will be particularly impactful for lower-income households, households of color, and first-time buyers.”
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®.
About
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.
###
5/22/2021