October Housing Market Sales Decline, Prices Set Records, Rates Starting to Fall
“The housing market sales in SWMI continued to decline and stay below the sales level in October for the last ten years. October was the tenth consecutive month for sales to fall behind in the same month of 2022. Selling prices continued to set records, reaching the highest price in October, comparing back to beyond the peak years to 2006. However, selling prices increased by less than 6 percent,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “The decreasing inventory of houses available for sale is the main contributor, with an 8 percent decrease in the level available from a year ago (802 vs. 873). With the lower sales volume, the months-supply level decreased slightly to 4.9 from 5.0-months supply in September for homebuyers. For comparison, in October 2010, there were 3385 houses for sale for a 16.6-months supply of houses.”
The market is also restrained by the Freddie Mac mortgage rate for a 30-year conventional mortgage, increasing to 7.79 from 7.31 in September. In October 2022, the rate was 7.08, and in 2021, the rate was 3.14.
October house sales dropped 7 percent from October 2022 (273 vs. 294). Year-to-date in October, there were 2393 houses sold, compared to 2818 houses in October 2022, for a 15 percent decline in sales.
The average selling price in October 2023 increased 1 percent to $392,273 compared to $386,894 in October 2022. Year-to-date, in October 2023, the average selling price rose 6 percent to $361,102 from $341,454 in October 2022.
The median selling price in October 2023 at $274,500 rose 6 percent from $260,000 in October 2022. Year-to-date, the median selling price increased 4 percent ($260,000 vs. $249,250).
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 October 2023 dropped 6 percent compared to October 2022 ($106,950,822 vs. $113,747,087). The year-to-date total dollar volume fell 10 percent ($864,405,599 vs. $962,220,066).
The number of bank-owned or foreclosed homes as a percentage of all transactions decreased to 1 percent from 3 percent in September. It was at 3 percent in October 2022. The highest percentage in October previously was 34 percent in 2009.
Nationally:
According to the National Association of Realtors®, existing-home sales dropped in October. Among the four major U.S. regions, sales slid in the Northeast, South, and West but were unchanged in the Midwest. All four regions experienced year-over-year sales declines.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops- fell 4.1% from September to a seasonally adjusted annual rate of 3.79 million in October. Year-over-year, sales tumbled 14.6% (down from 4.44 million in October 2022).
“Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation,” said NAR Chief Economist Lawrence Yun. “Multiple offers, however, are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market.”
The median existing-home price for all housing in October was $391,800, an increase of 3.4% from October 2022 ($378,800). All four U.S. regions registered price increases.
At an annual rate of 930,000 in October, existing-home sales in the Midwest were unchanged from the prior month but down 13.9% from one year ago. The median price in the Midwest was $285,100, up 4.2% from October 2022.
“While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year-over-year, including a new all-time high for the month of October,” Yun said. “In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years,” Yun said.
First-time buyers were responsible for 28% of sales in October, up from 27% in September and identical to October 2022. NAR’s 2023 Profile of Home Buyers and Sellers – released earlier this month – found that the annual share of first-time buyers was 32%.
All-cash sales accounted for 29% of transactions in October, unchanged from September but up from 26% in October 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 15% of homes in October, down from 18% in September and 16% one year ago.
Total housing inventory registered at the end of October was 1.15 million units, up 1.8% from September but down 5.7% from one year ago (1.22 million). Unsold inventory sits at a 3.6-month supply at the current sales pace, up from 3.4 months in September and 3.3 months in October 2022.
“Fortunately, mortgage rates have fallen for the third straight week, stirring up buying interest,” Yun added. “Though limited now, expect housing inventory to improve after this winter and heading into the spring. More inventory will result in more home sales.”
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.
The Housing Market in South Haven 49090 and SWMI
