October 2022 SWMI Housing Market
“The frenzy of the Southwest Michigan local housing market has slowed for ten consecutive months in 2022. Potential homebuyers have faced significant increases in selling prices for the limited availability of homes for sale. If successful in contracting a home, they will find mortgage rates nearly double what they were at the first of 2022,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries continued, “The housing inventory available for sale across Allegan, Berrien, Cass, and the westerly 2/3 of Van Buren Counties reached 873 at the end of October. Last year the inventory was at 818 houses, so the gain was 7 percent. This small gain raised the availability level to 4.1-months supply from 3.2-months supply in October 2021. For comparison, in October 2010, there were 3385 houses for sale and a 16.6-months supply of inventory.”
“The Freddie Mac mortgage rate climbed to 7.08 from 6.70 in September for a 30-year conventional mortgage. A year ago, the rate was 3.14,” Jeffries stated.
In October, the number of houses sold fell to 294 from 367 in October 2021, for a 20 percent drop in sales. Year-to-date sales were down 14 percent from 2021 (2818 vs. 3259).
The average and median selling prices in October and the year-to-date selling prices set records in the year-over-year comparison, which dates back to 2006.
The average selling price rose 15 percent from that in October 2021 ($386,894 vs. $337,096). The year-to-date average selling price of $341,454 was 6 percent higher than the $321,711 price in October 2021.
The median selling price increased 11 percent to $260,000 from $235,000 in October 2021. Year-to-date, the median selling price rose 11 percent ($249,250 vs. $225,000).
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 fell 8 percent in October 2022 ($113,747,087 vs. $123,714,421). Year-to-date total dollar volume at the end of October 2022 dropped 8 percent ($962,220,066 vs. $1,048,456,410).
Nine houses that were bank-owned or foreclosed were included as a percentage of all transactions. This increase raised the percentage to 3 percent of all transactions. For six months, the percentage was at 1 percent. In January, the rate was 0 percent. The previous lowest percentage in October was 1 percent in 2021. The highest percentage in October was 34 percent in 2009.
According to the National Association of Realtors®, – Existing home sales retreated for the ninth straight month in October. All four major U.S. regions registered month-over-month and year-over-year declines.
Total existing-home sales, which were completed transactions that include single-family homes, townhomes, condominiums, and co-ops, decreased 5.9% from September to a seasonally adjusted annual rate of 4.43 million in October. Year-over-year, sales dropped by 28.4% (down from 6.19 million in October 2021).
“More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher,” said NAR Chief Economist Lawrence Yun. “The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years.”
The median existing-home price for all housing types in October was $379,100, a gain of 6.6% from October 2021 ($355,700), as prices rose in all regions. This marks 128 consecutive months of year-over-year increases, the longest-running streak on record.
Existing-home sales in the Northeast trailed off 6.6% from September to an annual rate of 570,000 in October, a decline of 23.0% from October 2021. The median price in the Northeast was $408,700, an increase of 8.0% from the previous year.
Existing-home sales in the Midwest retracted 5.3% from the previous month to an annual rate of 1,080,000 in October, falling 25.5% from the prior year. The median price in the Midwest was $274,500, up 5.9% from October 2021.
First-time buyers were responsible for 28% of sales in October, down from 29% in both September 2022 and October 2021. NAR’s 2022 Profile of Home Buyers and Sellers – released earlier this month4 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 26% of transactions in October, up from 22% in September and 24% in October 2021.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in October, up from 22% in September and 24% in October 2021.
“Mortgage rates have come down since peaking in mid-November, so home sales may be close to reaching the bottom in the current housing cycle,” Yun said.
Nationally, the total housing inventory registered at the end of October was 1.22 million units, which was down 0.8% from both September and one year ago (1.23 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in September and 2.4 months in October 2021.
“Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers,” Yun added. “In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%.”
Realtor.com®‘s Market Trends Report in October shows that the largest year-over-year median list price growth occurred in Milwaukee (+34.5%), Miami (+25.1%), and Kansas City (+21.4%). Phoenix reported the highest increase in the share of homes that had prices reduced compared to last year (+35.9 percentage points), followed by Austin (+31.2 percentage points) and Las Vegas (+24.4 percentage points).
“For consumers looking to buy or sell a home, having a REALTOR® by their side to navigate one of the more challenging and complex markets we’ve seen in some time will be essential to successfully completing transactions,” said NAR President Kenny Parcell, a REALTOR® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “REALTORS® understand local market conditions and provide timely and trusted advice, from listing to closing.”
The numbers reported for local sales include residential property in Allegan, Berrien, Cass, and the westerly two-thirds 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.