“After four months of selling prices holding fairly steady, the average and median selling prices dropped. The average selling price in August fell 12 percent from July ($196,723 vs. 224,705) and the median selling price slipped 3 percent ($159,500 vs. $164,819),” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
“We continued to see new benchmarks set in 2017 where the number of houses sold in August, number of houses sold year-to-date, total dollar volume, year-to-date average selling price, August median selling price and year-to-date median selling price outpace previous market years back to 2006,” continued Jeffries.
The number of houses sold in August was the highest for the year at 418. In July, only 330 homes were sold.
Looking at the year-to-year picture, the number of houses sold increased 8 percent over the number of houses sold in August 2016 (418 vs. 388). Year-to-date, the number of houses sold was up 6 percent with 2442 this year compared to 2314 in 2016.
Even with more houses selling in August 2017, the total dollar volume was very close to that in August 2016 ($82,230,523 vs. $81,956,166). Year-to-date, the total dollar volume was down 7 percent at $429,465,503 at the end of August 2017 compared to $460,371,934 in 2016.
The average selling price in August was $196,723 which was a 7 percent decline from August 2016 when the average selling price was $211,227. Year-to-date, the average selling price was up 5 percent ($209,539 vs. $198,950).
The median selling price of $159,500 in August 2017 was a 9 percent increase over the $146,700 set in August 2016. Year-to-date the median selling price rose 10 percent to $153,500 from $139,900 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 decreased 14 percent at the end of August 2017 with 2036 homes for sale compared to 2363 homes for sale in August 2016. This kept the 6.6- months supply of homes for sale the same as in July. The lack of inventory becomes more significant when the inventory level was 3821 in August 2009 compared to 2036 in August 2017 which is a 47 percent decline.
The number of bank-owned or foreclosed homes as a percentage of all transactions remained at the lowest level, 4 percent, in August. The previous lowest percentage in August was 10 percent in 2016. The highest percentage in August 2009 was 36 percent.
Locally, the mortgage rate dropped slightly to 3.975 from 4.06 percent in July. Last year in August, the rate was 3.56. Nationally, the Freddie Mac mortgage rate in August was 3.82 versus 3.92 percent in July for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Existing-home sales stumbled in August for the fourth time in five months as strained supply levels continue to subdue overall activity, according to the National Association of Realtors®. Sales gains in the Northeast and Midwest were outpaced by declines in the South and West.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, retreated 1.7 percent to a seasonally adjusted annual rate of 5.35 million in August from 5.44 million in July. Last month's sales pace is 0.2 percent above last August, and is the lowest since then.
Lawrence Yun, NAR chief economist, says the slump in existing sales stretched into August despite what remains a solid level of demand for buying a home. “Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales,” he said. “What’s ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it’s putting on prices in several parts of the country. Sales have been unable to break out because there are simply not enough homes for sale.”
Added Yun, “Some of the South region’s decline in closings can be attributed to the devastation Hurricane Harvey caused to the greater Houston area. Sales will be impacted the rest of the year in Houston, as well as in the most severely affected areas in Florida from Hurricane Irma. However, nearly all of the lost activity will likely show up in 2018.”
The median existing-home price for all housing types in August was $253,500, up 5.6 percent from August 2016 ($240,000). August's price increase marks the 66th straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest rose 2.4 percent to an annual rate of 1.28 million in August, and are now 0.8 percent above a year ago. The median price in the Midwest was $200,500, up 5.0 percent from a year ago.
First-time buyers were 31 percent of sales in August, which is down from 33 percent in July and is the lowest share since last August (also 31 percent). NAR's 2016 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 35 percent.
“Market conditions continue to be stressful and challenging for both prospective first-time buyers and homeowners looking to trade up,” said Yun. “The ongoing rise in home prices is straining the budgets of some of these would-be buyers, and what is available for sale is moving off the market quickly because supply remains minimal in the lower- and mid-price ranges.”
All-cash sales were 20 percent of transactions in August, up from 19 percent in July but down from 22 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in August, up from 13 percent in July and 12 percent a year ago.
Nationally, the total housing inventory at the end of August declined 2.1 percent to 1.88 million existing homes available for sale, and is now 6.5 percent lower than a year ago (2.01 million) and has fallen year-over-year for 27 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.5 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.