ST. JOSEPH, MI – "Since August, the local housing market year-to-date has kept pace with and just slightly below what the market was doing a year ago. With the exception of the average selling price fluctuating, the market was also on pace with where it was in 2009. Last year at the end of October, three more houses were sold, the average selling price was 2 percent higher and the median selling price was 4 percent higher than this year. While we are seeing typical monthly changes, the year-to-date numbers are suggesting that the market is stabilizing and hopefully providing more sustainable conditions. The mortgage rates may have been a factor in that rates reported in October have dropped from 5.22 in 2009 to 4.47 in 2010 to 4.23 this year," stated Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS^®, Inc.

Walter said, "Last year in October, twenty more homes were sold than in October this year which results in a 9 percent decrease. The average and median selling prices dropped 13 percent. The average selling price in October was $148,297 vs. $170,512 last year. The median selling price fell to $109,900 vs. $127,000 a year ago. With fewer houses selling and at lower selling prices the total dollar volume fell by 21 percent." 

"Year-to-date, the average selling price was $157,327 vs. $160,500, a 2 percent decline, and the median selling was $99,700 vs. $104,000, a 4 percent decline from last year," Walter continued. 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 improved in October while the number of homes on the market continued to decline, according to the National Association of Realtors^®.

According to the National Association of Realtors®, total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 1.4 percent to a seasonally adjusted annual rate of 4.97 million in October from a downwardly revised 4.90 million in September, and are 13.5 percent above the 4.38 million unit level in October 2010. 

Lawrence Yun, NAR chief economist, said the market has been fairly steady but at a lower than desired level. "Home sales have been stuck in a narrow range despite several improving factors that generally lead to higher home sales such as job creation, rising rents and high affordability conditions. Many people who are attempting to buy homes are thwarted in the process," he said. 

"A higher rate of contract failures has held back a sales recovery. Contract failures2 reported by NAR members jumped to 33 percent in October from 18 percent in September, and were only 8 percent a year ago, so we should be seeing stronger sales," Yun added. 

Contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses. "Other recent factors include disruption in the National Flood Insurance Program, and lower loan limits for conventional mortgages, which paradoxically force some of the most creditworthy consumers to pay unnecessarily higher interest rates," Yun said. 

The national median existing-home price for all housing types was $162,500 in October, which is 4.7 percent below October 2010. Distressed homes – foreclosures and short sales typically sold at deep discounts – slipped to 28 percent of sales in October from 30 percent in September (17 percent were foreclosures and 11 percent were short sales); they were 34 percent in October 2010. 

Regionally, existing-home sales in the Midwest rose 2.8 percent in October to a pace of 1.10 million and are 19.6 percent higher than October 2010. The median price in the Midwest was $132,800, which is 4.7 percent below a year ago. 

All-cash sales accounted for 29 percent of purchases in October, little changed from 30 percent in September and 29 percent in October 2010; investors make up the bulk of cash transactions. 

Investors purchased 18 percent of homes in October, compared with 19 percent in September and 19 percent in October 2010. First-time buyers accounted for 34 percent of transactions in October, up from 32 percent in September; they were 32 percent in October 2010. 

"Locally, the number of bank-owned or foreclosed homes as a part of all closed transactions has stabilized over the last three months to a yearly low of 26 percent in August and October and 29 percent in September. The number of bank-owned or foreclosed transactions peaked in March at 47 percent," Walter stated. 

Walter continued, "As of October 31st, we had 3,061 houses listed for sale, which is a 10 percent decrease from the number we had in October 2010 (3385). This inventory level based on the last 12 month's sales gives us a 15.2-month supply of homes for sale, which is down from last year when we had a 16.6-month supply." 

Nationally, the ongoing positive trend is a steady decline in the number of homes on the market. Total housing inventory at the end of October fell 2.2 percent to 3.33 million existing homes available for sale, which represents an 8.0-month supply at the current sales pace, down from an 8.3-month supply in September. Inventories have been trending gradually down since setting a record of 4.58 million in July 2008. 

The mortgage rate in Southwest Michigan in October was 4.23, up slightly from 4.17 in September. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.07 percent in October from 4.11 percent in September; the rate was 4.23 percent in October 2010. 

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.