At the end of the first quarter of 2021, the local housing market continues to keep its robust pace while selling prices increased monthly and setting new records in the year-over-year comparison that looks back to 2006. The average selling price from February 2021 to March 2021 increased 26 percent from $265,892 to $335,662. The number of houses sold in February was 200, and in March, 278 houses were sold for a 39 percent increase from one month to the next month.
In March, the number of houses sold slipped to 278 from 285 sold in March 2020, for a 3 percent decrease. At the end of the first quarter in 2021, 749 houses have been sold, a new sales record. The previous record was 675 houses occurred at the end of the first quarter of 2017.
The inventory of houses for sale dropped 45 percent from a year ago(665 vs. 1214), bringing the inventory of houses for sale down to 2.5-months of inventory available for buyers. At the end of the first quarter in 2020, the Market had a 4.9-months supply of houses for sale. For comparison, in March 2009, there were 2969 houses for sale.
Selling prices have set new record levels each month in 2021. The average selling price in March 2021 was $335,662 compared to $221,734 in March 2020. for a 51 percent increase. Year-to-date selling prices at the end of the first quarter also set records in the year-over-year comparison. The year-to-date average selling price in March 2021 increased 37 percent over March 2020 ($303,233 vs. $221,825).
The median selling price in March 2021 increased 13 percent to $202,875 from $180,000 in March 2020. Year-to-date, the median selling price soared 13 percent ($198,000 vs. $175,000). The median selling price and year-to-date median selling price also set new record prices in the month of March 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.
Even with fewer houses sold, the record-setting selling prices pushed the total dollar volume up 72 percent in March 2021 ($93,314,197 vs. $54,103,134). The monthly and year-to-date total dollar volume set new records for the dollar volume at the end of the first quarter ($227,114,925 vs. $136,422,547).
The number of bank-owned or foreclosed homes as a percentage of all transactions was 3 percent in February and stayed the same in March. In January, the rate was 4 percent. The previous lowest percentage was 7 percent in March 2018. The highest percentage in March was 60 percent in 2009.
Locally, the mortgage rate was 3.146, down from 3.18 in February. Last year in March, the rate was 3.635. Nationally, the Freddie Mac mortgage rate in March was 3.18, up slightly from 2.97 in February for a 30-year conventional mortgage.
This data reflects home sales across 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®.
When Selling a Home…
Your REALTOR® has the expertise and local knowledge to advise on how to price your house, so it doesn’t languish on the market.
Here are four pitfalls that you can fall into and potential consequences when setting your price.
#1 Pitfall: Thinking your house is so great that you list it at too high a price. You’ll lose your most important leverage and timing of a new listing. The longer your house sits on the market, the less likely you will get your asking price.
#2 Pitfall: Assuming upgrades will get you a higher price. Upgrades don’t always equal value. In fact, research from the NATIONAL ASSOCIATION OF REALTORS® shows you might recoup 59% of your costs.
#3 Pitfall: Setting a dollar amount you need to make. The number you have in your head may not be in line with the market. This is where your REALTOR’s knowledge of the local housing market and how your home compares to others in the area should be your guide for price setting.
#4 Pitfall: Letting emotions get the best of you. Listen to your REALTOR on how to price your home. You need an outside perspective to give you the market analysis to price your home. The toughest thing is to think with your head and not with your heart when pricing your home for sale.
When Buying a Home…
The answer to whether closing costs are tax-deductible — or mortgage interest and property taxes for that matter — is, “It depends.”
Basically, you’ll want to itemize if you have deductions totaling more than the standard deduction, which is $12,200 for single people and $24,400 for married couples filing jointly. Every taxpayer gets this deduction, homeowner or not. And most people take it because their actual itemized deductions are less than the standard amount.
Here’s the list of one-time home purchase costs that are not tax-deductible:
- real estate taxes charged to you when you closed,
- mortgage interest paid when you settled,
- some loan origination fees (points) applicable to a mortgage of $750,000 or less.
Costs of closing on a home that aren’t tax deductible include:
- Real estate commissions
- Home inspections
- Attorney fees
- Title fees
- Transfer taxes
- Mortgage refi fees
Mortgage interest and property taxes are annual expenses of owning a home that may or may not be deductible. You should consult with a tax advisor before filing to maximize your deductions and confirm that you have deductions that exceed your maximum.
To view properties that are for sale in your local area, go to www.swmar.com, and click on “Search”. The Southwestern Michigan Association of REALTORS®, Inc. is a professional trade association for real estate professionals 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.