ST. JOSEPH, MI – "July housing sales continued to follow the trend for the past seven years with the number of units sold and closed in July (218) falling from the number sold in June (263). The decline in 2011 was 17% while the decline in 2010 was 24%. When comparing July, 2011 (218) to July, 2010 (170) the unit sales were up 28%. This puts the year-to-date unit sales close to the same pace as last year. The average and median selling prices for July both dropped significantly from July, 2010," stated Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS®, Inc.

Walter said, "Last year we had the stimulus tax credit factor but we also had selling prices that were going up. Now, we are seeing more houses being sold but at lower prices. The average price dropped 25 percent over July, 2010 ($155,087 vs. $206,732) but was up 9 percent over last month ($141,912). Year-to-date, the average selling price was up 3 percent over last year."

The median selling price for the month also fell behind last year by 19 percent ($102,000 vs. $125,750) and was down slightly from June ($102,980). July selling prices brought the year-to-date median selling price down 4 percent. The median price is the price at which 50% of the homes sold were above that price and 50% were below.

Nationally, existing-home sales followed the same pattern with July falling behind June sales but showing notably higher results than a year ago.

According to the National Association of Realtors®, Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 3.5 percent to a seasonally adjusted annual rate of 4.67 million in July from 4.84 million in June, but are 21.0 percent above the 3.86 million unit pace in July 2010, which was a cyclical low immediately following the expiration of the home buyer tax credit.

Lawrence Yun, NAR chief economist, said there is a tug and pull on the market. "Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers," he said. "Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs."

The national median existing-home price for all housing types was $174,000 in July, down 4.4 percent from July 2010. Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 29 percent of sales in July, compared with 30 percent in June and 32 percent in July 2010.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said an unacceptably high number of potential home buyers are unable to complete transactions. "For both mortgage credit and home appraisals, there's been a parallel pendulum swing from very loose standards which led to the housing boom, to unnecessarily restrictive practices as an overreaction to the housing correction," he said.

"Beyond the tight credit problems, all appraisals must be done by valuators with local expertise and using reasonable comparisons – it doesn't make sense to consistently see so many valuations coming in below negotiated prices, often below replacement construction costs," Phipps said.

Regionally, existing-home sales in the Midwest increased 1.0 percent in July to a pace of 1.05 million and are 31.3 percent above a year ago. The median price in the Midwest was $146,300, down 2.9 percent from July 2010.

All-cash transactions accounted for 29 percent of sales in July; unchanged from June; they were 30 percent in June 2010; investors account for the bulk of cash purchases.

First-time buyers purchased 32 percent of homes in July, up from 31 percent in June; they were 38 percent in July 2010. Investors accounted for 18 percent of purchase activity in July compared with 19 percent in June and 19 percent in July 2010. The balance of sales was to repeat buyers, which were a 50 percent market share in July, unchanged from June.

"In the Southwest Michigan market, bank-owned or foreclosed homes as a percentage of all transactions dropped to 32 percent. This year we peaked in March at 47 percent," Walter stated.

Walter continued, "As of July 31st, we had 3311 houses listed for sale. At this level of inventory, based on the past 12 months of sales, our market has 16.4-month supply of houses. In July 2010, we had 3,821 houses listed for sale which at that time represented an 18.1-month supply of houses.

Nationally, the total housing inventory at the end of July fell 1.7 percent to 3.65 million existing homes available for sale, which represents a 9.4-month supply4 at the current sales pace, up from a 9.2-month supply in June.

"With the current level of houses for sale and mortgage rates that are holding steady, this is a good time for buyers to find a good home. The mortgage rate in July was 4.76 up slightly from 4.73 in June," stated Walter.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.55 percent in July, up from 4.51 percent in June; the rate was 4.56 percent in July 2010. Last week, Freddie Mac reported the 30-year fixed rate dropped to 4.32 percent.

The numbers reported for local sales include residential property in Berrien, and the western half of Van Buren and Cass counties.  All three counties are included in numbers and percentages and do not reflect differences in any individual areas.

The Southwestern Michigan Association of REALTORS®, Inc. is a professional trade association for real estate licensees and ancillary service providers for the real estate industry in Van Buren, Berrien and Cass counties.  The Association is located at 3123 Lake Shore Drive St. Joseph, MI 49085, (269) 983.6375.  They can also be contacted through their web site, www.swmar.com.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

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8/19/2011