The SWMI housing market for the past nine months has surpassed the record numbers set in 2016. Historically, 2006 had been the peak year for the local housing market. It took ten years for the market to rebuild economically to the point where 2016 became the new peak year. Now, in 2017 the dwindling inventory of houses for sale could help to set a new benchmark year.
The inventory of houses for sale dropped 11 percent from 2185 in September 2016 to 1954 in September 2017. With less competition, average and median selling prices have increased, creating new record numbers, while the overall number of houses sold year-to-date had only increased by 5 percent (2813 vs. 2681). At the end of September there was a 6.3-months of supply of houses for sale. This was a slight drop from the steady level of 6.5-6.6-months supply available since May.
The number of houses sold in September was only 4 houses higher than in September 2016 (371 vs 367).
The average selling price of $252,111 in September 2017 was the highest for the year and for the month of September in the year-over-year comparison back to 2006. It was a 22 percent increase over the $209,014 average selling price in September 2016. The average selling price in August 2017 dropped to $196,723 after four months of selling prices holding fairly steady. The spike in the September average selling price helped push the year-to-date average selling price up 7 percent ($215,154 vs. $209,014).
The September and year-to-date median selling prices were up 11 percent. In September, the median selling price was $159,550 compared to $143,500 in September 2016. The year-to-date median selling price rose by $15,000 ($155,000 vs. $140,000).
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
The surge in selling prices increased the total dollar volume by 22 percent in September ($93,533,403 vs. $76,708,296). Year-to-date, the total dollar volume jumped 13 percent from $537,080,230 in September 2016 to $605,229,929 in September 2017.
The number of bank-owned or foreclosed homes as a percentage of all transactions rose slightly to 5 percent in September from 4 percent, in July and August. The previous lowest percentage in September was 12 percent in 2014 and 2016. The highest percentage in September 2009 was 37 percent.
Locally, the mortgage rate dropped slightly to 3.938 from 3.975 percent in August. Last year in September, the rate was 3.54. Nationally, the Freddie Mac mortgage rate in September was 3.83 versus 3.82 percent in August for a 30-year conventional mortgage.
This data reflects home sales across 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…
If you are thinking of taking your REALTOR’s suggested selling price and inflating it because you just might get more. Think again. Buyers have more resources to be better educated about selling prices and will see through a higher price very quickly. The potential buyers will walk away and your house will spend more time on the market. Then you will not be able to move on to your new home or you will need to take on two mortgages.
Your Realtor has researched comparable properties to your house that have sold and current listed prices of houses for sale in your market. The suggested price is based on facts and not sentimental value or cost of renovations. And the suggested price is not based on estimated prices generated by some website calculators that are not capable giving true comparable analysis. The listing price might be lower than you thought it would be but listing your home at the right price will save you time and money in the long run. Your REALTOR® is a trained professional with the right resources to market your home and has first-hand experience with buyers to know how they will perceive your house. Contact a REALTOR® and selling your house will be a lot less stressful.
When Buying a Home…
So you have decided emotionally that you are ready to buy your first house or you are ready to move on to a different house. But are you financially able to purchase a new home? Your first step is to get educated about the home buying process by working with a REALTOR® who works in your local market and that you can trust with personal information. If you don’t know a realtor, ask for suggestions from friends and family members. Step two is to get your FICO credit score. This score is the starting point for lenders to determine what mortgage interest rate to offer you. If it is low, now would be the time to start resolving any past credit issues.
You should start saving for your down payment which can be 5% to 20% of the price of a home. A very important step is taking the time to meet with lenders who will help you learn about financing options available for you. Lenders will also be able to help you ballpark closing costs which you will need in addition to the down payment. Your REALTOR can suggest lenders to you based on other buyer’s experiences with lenders.
By following through these steps you should be fully aware of your financial position and better able to make take the next set of steps in actually purchasing a home in today’s marketplace.
To view properties that are for sale in your local area go to www.swmar.com and click on “Property 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 Van Buren, Berrien and Cass Counties. The Association can be contacted at 269-983-6375 or through their website at www.swmar.com.