“The SWMI housing market for all eleven months of 2017 has continued to surpass nearly all records set in 2016. November 2017 was slightly higher in the number of houses sold, total dollar volume, and average selling price than November 2016. The median selling price, however, soared 17 percent higher than in November 2016. The year-to-date numbers in 2017 were solidly ahead of 2016 which became the new peak year in our year-over-year comparison back to 2006,” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
“When we look at the numbers set in November 2017, all were the highest recorded in the year-over-year comparison with the exception of the November 2017 average selling price. At $202,582, the average selling price in November 2017 fell just short of the November 2007 average selling price of $206,381” continued Jeffries.
Jeffries added, “The year-to-date numbers in 2017 were all the higher than any previous numbers set in the year-over-year comparison back to 2006.”
The number of houses sold in November 2017 increased 2 percent to 295 over 289 in November 2016. Year-to-date, the number of houses sold rose 1 percent (3461 vs. 3295).
The inventory of houses for sale plunged 15 percent to 1601 in November 2017 from 1877 houses for sale in November 2016. The local inventory dropped to 5.2-months supply. For comparison, in 2010 the inventory level was at 15.8-months supply.
The average selling price increased just slightly less than 2 percent to $202,582 in November 2017 from $199,042 in November 2016. Year-to-date, the average selling price increased 8 percent ($216,372 vs. $200,309).
At $160,000, the November 2017 median selling price was up 17 percent from $137.000 a year ago. For the third month in a row, the year-to-date median selling was $155,000 vs. $140,000 in 2016.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
The total dollar volume increased 4 percent in November 2017 over November 2016 ($59,761,638 vs. $57,523,192). Year-to-date, the total dollar volume remains up 14 percent ($748,862,791 vs. $660,221,446)
Our local housing market for the last seven months held the number of bank-owned or foreclosed homes as a percentage of all transactions to between 4 to 6 percent. In November the percentage was 5 percent. The previous lowest percentage in November was 12 percent in 2016. The highest percentage in November was 36 percent in 2010.
Locally, the mortgage rate dipped slightly to 4.06 from 4.125 percent in October. Last year in November, the rate was 3.92. Nationally, the Freddie Mac mortgage rate in November was 3.90 versus 3.94 in October for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Existing-home sales surged for the third straight month in November and reached their strongest pace in almost 11 years, according to the National Association of Realtors®. All major regions except for the West saw a significant hike in sales activity last month.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 5.6 percent2 to a seasonally adjusted annual rate of 5.81 million in November from an upwardly revised 5.50 million in October. After last month’s increase, sales are 3.8 percent higher than a year ago and are at their strongest pace since December 2006 (6.42 million).
Lawrence Yun, NAR chief economist, says sales home sales in most of the country expanded at a tremendous clip in November. “Faster economic growth in recent quarters, the booming stock market and continuous job gains are fueling substantial demand for buying a home as 2017 comes to an end,” he said. “As evidenced by a subdued level of first-time buyers and increased share of cash buyers, move-up buyers with considerable down payments and those with cash made up a bulk of the sales activity last month. The odds of closing on a home are much better at the upper end of the market, where inventory conditions continue to be markedly better.”
The median existing-home price for all housing types in November was $248,000, up 5.8 percent from November 2016 ($234,400). November’s price increase marks the 69th straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest sales jumped 8.4 percent to an annual rate of 1.42 million in November, and are now 6.8 percent above a year ago. The median price in the Midwest was $196,100, up 8.8 percent from a year ago.
First-time buyers were 29 percent of sales in November, which is sown from 32 percent in October and a year ago. NAR's 2016 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 34 percent.
On the topic of tax reform, NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty, says it’s good news homeowners can continue to count on tax incentives such as the mortgage interest deduction and the state and local tax deduction.
“Only 6 percent of homeowners have mortgages exceeding $750,000, and only 5 percent pay more than $10,000 in property taxes, but most homeowners won’t itemize under the new regime,” she said. “While we’re pleased that important homeownership incentives such as the capital gains exclusion survived in conference, additional changes are required to truly incentivize homeownership in the tax code.”
Matching the highest share since May, all-cash sales were 22 percent of transactions in November, which is up from 20 percent in October and 21 percent a year ago. Individual investors, who account for many cash sales, purchased 14 percent of homes in November, up from 13 percent last month and unchanged from a year ago.
“The elevated presence of investors paying in cash continues to add a layer of frustration to the supply and affordability headwinds aspiring first-time buyers are experiencing,” said Yun. “The healthy labor market and higher wage gains are expected to further strengthen buyer demand from young adults next year. Their prospects for becoming homeowners will only improve if more lower-priced and smaller-sized homes come onto the market.”
Nationally, the total housing inventory at the end of November dropped 7.2 percent to 1.67 million existing homes available for sale, and is now 9.7 percent lower than a year ago (1.85 million) and has fallen year-over-year for 30 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace, which is down from 4.0 months a year ago.
“The anticipated rise in mortgage rates next year could further cut into affordability if these staggeringly low supply levels persist,” said Yun. “Price appreciation is too fast in a lot of markets right now. The increase in homebuilder optimism must translate to significantly more new construction in 2018 to help ease these acute inventory shortages.”
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.