“In August, the SWMI housing sales reached the highest point for the year, which is a good note for the end of the summer’s peak selling season. However, this sales level was below the sales level in August for the last ten years. Year-to-date sales followed the same story,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “The number one factor remains the extremely low inventory of houses available for sale. At the end of August, there were 848 houses for sale across Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren Counties. According to 2021 census data, there were 77,308 households in Berrien County alone. In August 2022 there were 884 houses for sale.”
The inventory of houses for sale fell 4 percent below the level available a year ago (848 vs. 884). With the lower sales volume, the months-supply level increased slightly to 4.9 from 4.0-months supply from a year ago for homebuyers. For comparison, in August 2010, there were 3,757 houses for sale for a 17.8-months supply of houses.
The second factor slowing down the market has been the increasing interest rate. The Freddie Mac mortgage rate in August was 7.18, up from 6.81 in July for a 30-year conventional mortgage. In August 2022, the rate was 5.55; in August 2021, the rate was 2.87.
The third crushing factor for homebuyers is that home selling prices increased and reached peak levels every month since May.
August house sales were down 8 percent from August 2022 (315 vs. 340). Year-to-date in August 1860 houses were sold, compared to 2185 houses in August 2022, for a 15 percent decline in sales.
The average selling price in August 2023 increased 11 percent to $396,933 compared to $356,179 in August 2022. Year-to-date, in August 2023, the average selling price rose 6 percent to $356,101 from $335,462 in August 2022.
The median selling price in August 2023 at $281,000 rose 13 percent from $248,750 in August 2022. Year-to-date, the median selling price increased by $10,000 ($255,000 vs. $245,000).
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 in August 2023 dropped 3 percent compared to August 2022
($121,100,896 vs.$124,889,612). The year-to-date total dollar volume fell 10 percent ($662,266,254 vs. $ 732,985,567).
According to the National Association of Realtors®, existing-home sales moved lower in August. Among the four major U.S. regions, sales improved in the Midwest, were unchanged in the Northeast, and slipped in the South and West. All four regions recorded year-over-year sales declines.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops- slid 0.7% from July to a seasonally adjusted annual rate of 4.04 million in August. Year-over-year, sales fell 15.3% (down from 4.77 million in August 2022).
“Home sales have been stable for several months, neither rising nor falling in any meaningful way,” said NAR Chief Economist Lawrence Yun. “Mortgage rate changes will have a big impact over the short run, while job gains will have a steady, positive impact over the long run. The South had a lighter decline in sales from a year ago due to greater regional job growth since coming out of the pandemic lockdown.”
The median existing-home price for all housing types in August was $407,100, an increase of 3.9% from August 2022 ($391,700). All four U.S. regions posted price increases.
In the Midwest, existing-home sales increased by 1.0% from the previous month to an annual rate of $970,000 in August, down 16.4% from the prior year. The median price in the Midwest was $305,300, up 6.8% from August 2022.
“Home prices continue to march higher despite lower home sales,” Yun said. “Supply needs to essentially double to moderate home price gains”.
First-time buyers were responsible for 29% of sales in August, down from 30% in July and identical to August 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 August, up from 26% in July and 24% in August 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in August, the same share as in July and one year ago.
Total housing inventory registered at the end of August was 1.1 million units, down 0.9% from July and 14.1% from one year ago (1.28 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, identical to July and up from 3.2 months in August 2022.
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.