ST. JOSEPH, MI – “The SWMI housing market sales dropped 23 percent in October. This makes four consecutive months that sales have fallen more than 19 percent below sales from last year. Selling prices in October were down from October 2020 record selling prices. However, the year-to-date selling prices did set records. The overall market was sustainable even with the inventory of houses for sale dropping over 20 percent per month since June.,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “In October, 367 houses were sold, down from the 398 sold in September and down 23 percent compared to 477 houses sold in October 2020”.
Year-to-date, the number of houses sold at the end of October was 3259, up 2 percent over October 2020 (3259 vs. 3198). At 3259 houses, October set a new sales record in the year-over-year sales records since 2006. For the last ten months, the year-to-date sales have set records over previous years.
The average selling price in October dropped 6 percent from the record-setting average selling price in October 2020 ($337,096 vs. $358,144). The year-to-date average selling price in October 2021 set a new record rising 8 percent over October 2020 ($321,711, vs. $297,786).
The median selling price in October 2021 slipped 4 percent to $235,000 from $245,660 in October 2020. Year-to-date, the median selling price increased 5 percent ($225,000 vs. $215,000). The year-to-date median selling price set a new record price in the month of October 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 fell 21 percent from a year ago (818 vs. 1034), bringing the inventory of houses for sale to a 3.2-months supply of inventory available for buyers. For comparison, in October 2010, there were 3385 houses for sale and a 16.6-months supply of inventory. Throughout 2021, the inventory level at the end of each month has fallen 20 percent to 48 percent.
The total dollar volume plummeted 28 percent in October 2021 ($123,714,421 vs. $170,834,881). With the number of sales at higher prices, the year-to-date total dollar volume set a new record for the dollar volume at the end of October ($1,048,456,410 vs. $952,320,913). The year-to-date total dollar volume rose 10 percent.
There were four bank-owned or foreclosed homes as part of all transactions in October, which was just 1 percent. In January, the rate was 4 percent, the highest rate for the year. The previous lowest percentage in October was 2 percent in 2020 and 2019. The highest percentage in October was 34 percent in 2009.
Nationally, the Freddie Mac mortgage rate in October was 3.14, up slightly from 3.01 in September for a 30-year conventional mortgage.
According to the National Association of Realtors®, existing-home increased in October, marking two straight months of growth. Two of the four major U.S. regions saw month-over-month sales climb; one region reported a drop, and the fourth area held steady in October. On a year-over-year basis, each region witnessed sales decrease.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, rose 0.8% from September to a seasonally adjusted annual rate of 6.34 million in October. Sales fell 5.8% from a year ago (6.73 million in October 2020).
“Home sales remain resilient, despite low inventory and increasing affordability challenges,” said Lawrence Yun, NAR’s chief economist. “Inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”.
The median existing-home price for all housing types in October was $353,900, up 13.1% from October 2020 ($313,000), as prices climbed in each region. This marks 116 straight months of year-over-year increases, the longest-running streak on record.
“Among some of the workforce, there is an ongoing trend of flexibility to work anywhere, and this has contributed to an increase in sales in some parts of the country,” said Yun. “Record-high stock markets and all-time high home prices have worked to significantly raise total consumer wealth and when coupled with extended remote work flexibility, elevated housing demand in vacation regions.”
Existing-home sales in the Northeast fell 2.6% in October, registering an annual rate of 750,000, a 13.8% decline from October 2020. The median price in the Northeast was $379,100, up 6.4% from one year ago.
Existing-home sales in the Midwest rose 4.2% to an annual rate of 1,500,000 in October, a 6.3% decrease from a year ago. The median price in the Midwest was $259,800, a 7.8% jump from October 2020.
“At a time when mortgage rates are still low, buying and securing a home is a wise investment,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “NAR will strive to make homeownership obtainable for all who want to pursue one of the key components of the American Dream.”
First-time buyers accounted for 29% of sales in October, up from 28% in September and down from 32% in October 2020. NAR’s 2020 Profile of Home Buyers and Sellers – released in late 2020 – revealed that the annual share of first-time buyers was 34%.
Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in October, up from both 13% in September and from 14% in October 2020. All-cash sales accounted for 24% of transactions in October, up from both 23% in September and from 19% in October 2020.
Nationally, at the end of October amounted to 1.25 million units, down 0.8% from September and down 12.0% from one year ago (1.42 million). Unsold inventory sits at a 2.4-month supply at the current sales pace, equal to September’s supply, and down from 2.5 months in October 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.