ST. JOSEPH, MI – “Homebuyers in the SWMI housing market unleashed their pent-up demand again in July with astonishing increases in the number of houses sold from June to July and year-to-date. Last month the selling prices were startling and record-setting. In July, the selling prices again set records in the year-over-year comparison that dates back to 2006,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “A key factor besides demand was that buyers experienced an inventory that was down 24 percent from July 2019 during the prime selling season. There were 1399 homes for sale at the end of July versus 1840 in July 2019. The number of listings for sale includes homes for sale across Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren counties.”
With only 1399 homes for sale, the market had a 6.6-months supply of houses for buyers. In June 2020, the level was 6.7-months supply with 1500 houses for sale. For comparison, in July 2010, there were 3821 houses for sale.
The number of houses sold increased 51 percent from June 2020 (479 vs. 318) and increased 51 percent from July 2019 (479 vs. 317). At 479 houses, July 2020 set a staggering record in the year-over-year comparison. The second best year was July 2018, with 390 homes sold.
Year-to-date, the number of houses sold was down 12 percent to 1748 from 1986 sold in July 2019.
The average selling price at $337,697 was 12 percent higher than the $300,418 average selling price in June 2020 and 34 percent higher than the $251,423 price in July 2019. The July average selling price raised the year-to-date, average selling price 14 percent ($268,934 vs. $236,199).
The median selling price rose to $230,000 from $200,000 in July 2019 for a 15 percent increase. From June 2020 to July, the median selling price decreased by 2 percent. In June, the median selling price was $234,950. Year-to-date, the median selling price rose 14 percent ($200,000 vs. $174,700).
The median price is the price at which 50% of the homes sold were above that price, and 50% were below.
With the record-setting number of houses sold, the total dollar volume sky-rocketed 103 percent in July ($161,756,996 vs. $79,701,398). The year-to-date total dollar differed by less than a percent ($470,098,082 vs. $469,092,976).
July’s boost caused the number of bank-owned or foreclosed homes as a percentage of all transactions to remain at 1 percent in July, the same as in June. This was the lowest percentage reached since 2009. The highest percentage in previously in July was 35 percent in 2009.
Locally, the mortgage rate was 3.108 down slightly from 3.253 in June. Last year in July, the rate was 3.961. Nationally, the Freddie Mac mortgage rate in July was 2.99 down from 3.13 in June for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Existing-home sales continued on a strong, upward trajectory in July, marking two consecutive months of significant sales gains, Each of the four major regions attained double-digit, month-over-month increases, while the Northeast was the only region to show a year-over-year decline.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, jumped 24.7% from June to a seasonally-adjusted annual rate of 5.86 million in July. The previous record monthly increase in sales was 20.7% in June of this year. Sales as a whole rose year-over-year, up 8.7% from a year ago (5.39 million in July 2019).
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist. “With the sizable shift in remote work, current homeowners are looking for larger homes, and this will lead to a secondary level of demand even into 2021.”
The median existing-home price for all housing types in July was $304,100, up 8.5% from July 2019 ($280,400), as prices rose in every region. July’s national price increase marks 101 straight months of year-over-year gains. For the first time ever, national median home prices breached the $300,000 level.
For the second consecutive month, sales for July increased in every region, and median home prices grew in each of the four major regions from one year ago.
Existing-home sales jumped 27.5% in the Midwest to an annual rate of 1,390,000 in July, up 10.3% from a year ago. The median price in the Midwest was $244,500, an 8.0% increase from July 2019.
“Luxury homes in the suburbs are attracting buyers after having lagged the broader market for the past couple of years,” Yun said. “Single-family homes are continuing to outperform condominium units, suggesting a preference shift for a larger home, including an extra room for a home office.”
First-time buyers were responsible for 34% of sales in July, down from 35% in June 2020 and up from 32% in July 2019. NAR’s 2019 Profile of Home Buyers and Sellers – released in late 2019 – revealed that the annual share of first-time buyers was 33%.
Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in July, up from both 9% in June 2020 and from 11% in July 2019. All-cash sales accounted for 16% of transactions in July, equal to the percentage in June 2020 and down from 19% in July 2019.
Nationally, the total housing inventory at the end of July totaled 1.50 million units, down from both 2.6% in June and 21.1% from one year ago (1.90 million). Unsold inventory sits at a 3.1-month supply at the current sales pace, down from 3.9 months in June and down from the 4.2-month figure recorded in July 2019.
Yun notes these dire inventory totals have a substantial effect on sales.
“The number of new listings is increasing, but they are quickly taken out of the market from heavy buyer competition,” he said. “More homes need to be built.”
“Homebuyers’ eagerness to secure housing has helped rejuvenate our nation’s economy despite incredibly difficult circumstances,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif. “Admittedly, we have a way to go toward full recovery, but I have faith in our communities, the real estate industry, and in NAR’s 1.4 million members, and I know collectively we will continue to mount an impressive recovery.”
The numbers reported for local sales include residential property in Allegan, Berrien, Cass, and the westerly 2/3 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, Van Buren, 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 1,401,418 million members involved in all aspects of the residential and commercial real estate industries.