“The number of houses sold this year in July compared to last year varied by one house (330 vs. 331). While sales were almost even, the average selling price increased by 9 percent ($224,705 vs. $206,179). The median selling price jumped 6 percent ($164,819 vs. $155,000),” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
“Except for the number of houses sold, the housing market in 2017 continues to outpace previous market years back to 2006 for total dollar volume, average selling prices and median selling prices. Year-to-date numbers also were higher than in previous years,” continued Jeffries.
“Even as a part of the year’s peak selling season, the number of houses sold in July tends to fall below results in June and the trend has shown that sales will pick up in August. This year the number of houses sold dropped 15 percent from June sales,” Jeffries explained.
Higher selling prices pushed the total dollar volume up 9 percent from July 2016 ($74,152,768 vs. $68,245,498). Since May, the average selling prices have held steady; wavering less than $900. But with fewer houses sold in July compared to June the total dollar volume dropped 15 percent ($74,152,768 vs. $87,335,485).
Year-to-date, the number of houses sold was up 5 percent (2,024 vs. 1,926). This increase resulted in the year-to-date, total dollar volume to increase by 13 percent.
The median selling price of $ 164,819 in July 2017 was a 6 percent increase over the $155,000 set in July 2016. Year-to-date the median selling price rose 11 percent to $152,225 from $137,000 in 2016.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
The active listing of homes for sale fell 16 percent at the end of July 2017 with 2019 homes for sale compared to 2409 homes for sale in July 2016. This declining inventory gave the market just 6.6-months supply of houses for home buyers to select from compared to 8.4-months supply a year ago and 18.1-months inventory in 2010.
Since May the number of bank-owned or foreclosed homes as a percentage of all transactions has continued to decline. In May, it was 6 percent. In June the record dropped to 5 percent. Then in July a new record was set at 4 percent. The previous lowest percentage was 8 percent in October 2016. In July 2009, the percentage was 35 percent.
Locally, the mortgage rate bumped up slightly to 4.06 from 4.03 percent in June. Last year in July, the rate was 3.5. Nationally, the Freddie Mac mortgage rate in July was 3.92 compared to 3.88 percent in July for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Listings in July typically went under contract in under 30 days for the fourth consecutive month because of high buyer demand, but existing-home sales ultimately pulled back as large declines in the Northeast and Midwest outweighed sales increases in the South and West.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 1.3 percent to a seasonally adjusted annual rate of 5.44 million in July from a downwardly revised 5.51 million in June. July’s sales pace is still 2.1 percent above a year ago, but is the lowest of 2017.
Lawrence Yun, NAR chief economist, says second half of the year got off on a somewhat sour note as existing sales in July inched backward. “Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace,” he said. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”
The median existing-home price for all housing types in July was $258,300, up 6.2 percent from July 2016 ($243,200). July’s price increase marks the 65th straight month of year-over-year gains.
“Home prices are still rising above incomes and way too fast in many markets,” said Yun. “Realtors® continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”
Regionally, existing-home sales in the Midwest fell 5.3 percent to an annual rate of 1.25 million in July, and are now 1.6 percent below a year ago. The median price in the Midwest was $205,400, up 5.9 percent from a year ago.
First-time buyers were 33 percent of sales in July, which is up from 32 percent both in June and a year ago. NAR's 2016 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 35 percent.
According to President William E. Brown, a Realtor® from Alamo, California, there’s a prominent misconception – especially among non-homeowners – that a down payment of at least 20 percent is needed to buy a home. “Every month this year, roughly 60 percent of buyers who financed their purchase with a mortgage made a down payment that was 6 percent or less5,” he said. “Potential buyers with solid employment and manageable levels of debt will find that there are mortgage options available. Talk to a lender to find out what you qualify for based on your savings and let that guide you as you begin your home search with a Realtor®.”
All-cash sales were 19 percent of transactions in July, up from 18 percent in June but down from 21 percent a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in July, unchanged from June and down from 11 percent a year ago. Distressed sales6 – foreclosures and short sales – were 5 percent of sales in July, up from 4 percent in June and unchanged from a year ago. Four percent of July sales were foreclosures and 1 percent were short sales.
Nationally, the total housing inventory at the end of July declined 1.0 percent to 1.92 million existing homes available for sale, and is now 9.0 percent lower than a year ago (2.11 million) and has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.8 months a year ago.
The numbers reported for local sales include residential property in 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 Van Buren, Berrien and Cass Counties. The Association can be contacted at 269-983-6375 or through their website at www.swmar.com
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.1 million members involved in all aspects of the residential and commercial real estate industries.