“Home sales in July took a step backward from a year ago, dropping 19 percent (317 vs. 390). July home sales also fell 14 percent from sales in June (317 vs. 367). Year-to-date, the number of houses sold was one house higher in July 2019 (1986 vs. 1985),” stated Alan Jeffries, Association Executive, Southwestern Michigan Association of REALTORS®, Inc.
Jeffries added, “The average selling price in July 2019 for houses sold in our area was up 10% at $251,423 compared to $228,965 in July 2018. Year-to-date, the average selling price increased by just 4 percent ($236,199 vs. $226,218).”
The median selling price soared 21 percent to $200,000 in July 2019 from $165,750 in July 2018. Year-to-date, the median selling price rose 9 percent ($174,700 vs. $160,000).
Even with the increased selling prices, the decline in the number of home sales lowered the total dollar volume by 11 percent ($79,701,398 vs. $89,296,357). Year-to-date, the total dollar volume was up 4 percent ($469,092,976 vs. $449,043,822).
The median price is the price at which 50% of the homes sold were above that price, and 50% were below.
The inventory of houses for sale dropped 3 percent below that in July 2018 (1840 vs. 1892). At 1840 houses, the market had a 7.4-months supply of homes for sale. In July 2010, the market had 18.1-month’s supply.
The number of bank-owned or foreclosed homes as a percentage of all transactions dropped to 3 percent for the second time in 2019. The percentage also was 3 percent in April 2019. This was the lowest percentage since 2009. The previous lowest percentage in July was 4 percent in 2018 and 2017. The highest percentage in July was 35 percent in 2009.
Locally, the mortgage rate decreased to 3.961 from 4.026 in June. Last year in July, the rate was 4.68. Nationally, the Freddie Mac mortgage rate in July increased slightly to 3.75 from 3.73 in June for a 30-year conventional mortgage.
According to the National Association of Realtors®, – Existing-home sales strengthened in July, a positive reversal after total sales were down slightly in the previous month, according to the National Association of Realtors®. Although Northeast transactions declined, the other three major U.S. regions recorded sales increases, including vast growth in the West last month.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums, and co-ops, rose 2.5% from June to a seasonally adjusted annual rate of 5.42 million in July. Overall sales are up 0.6% from a year ago (5.39 million in July 2018).
“Falling mortgage rates are improving housing affordability and nudging buyers into the market,” said Lawrence Yun, NAR’s chief economist. However, he added that the supply of affordable housing is severely low. “The shortage of lower-priced homes have markedly pushed up home prices.”
Home price appreciation has been much stronger in the lower-price tier compared to homes sold in the upper-price tier, based on the analysis of proprietary deed records data from Black Knight, Inc. and Realtors Property Resource®.
Of the same homes that were sold in 2018 that were purchased in 2012 in 13 large metro areas (repeat sales transactions), the lower half of the market had increased by more than 100% in 2018 in metro areas like Atlanta-Sandy-Springs-Roswell, Ga. (165%), Denver-Aurora-Lakewood, Colo. (103%), Miami-Fort-Lauderdale, Fla. (119%) and Tampa-St. Petersburg-Clearwater, Fla. (125%). The median home price for homes purchased in the upper half of the market in these same metro areas in 2012 increased at a much slower pace when sold in 2018.
“Clearly, the inventory of moderately-priced homes is inadequate, and more home building is needed,” said Yun. “Some new apartments could be converted into condominiums thereby helping with the supply, especially in light of new federal rules permitting a wider use of Federal Housing Administration (FHA) mortgages to buy condo properties.”
“Mortgage rates are important to consumers, but so is confidence about the nation’s overall economic outlook,” Yun continued. “Home buying is a serious long term decision, and current low or even lower future mortgage rates may not in themselves meaningfully boost sales unless accompanied by improved consumer confidence.”
The median existing-home price for all housing types in July was $280,800, up 4.3% from July 2018 ($269,300). July’s price increase marks the 89th straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest edged up 1.6% to an annual rate of 1.27 million, which is a 0.8% increase from July 2018. The median price in the Midwest was $226,300, an 8.1% surge from a year ago.
First-time buyers were responsible for 32% of sales in July, down from 35% the month prior and about equal to the 32% recorded in July 2018. NAR's 2018 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 33 percent.
As the share of first-time buyers rose, individual investors or second-home buyers, who account for many cash sales purchased 11% of homes in July, up from 10% recorded in June 2019 and down from 12% recorded in July a year ago. All-cash sales accounted for 19% of transactions in July, up from June and down from July of 2018 (16% and 20%, respectively).
Nationally, the total housing inventory at the end of July decreased to 1.89 million, down from 1.92 million existing-homes available for sale in June, and a 1.6% decrease from 1.92 million one year ago. Unsold inventory is at a 4.2-month supply at the current sales pace, down from the 4.4 month-supply recorded in June and down from the 4.3-month supply recorded in July of 2018.
“Present rates have opened the market for a number of potential buyers who couldn’t afford a home just a year ago,” said NAR President John Smaby, a second-generation Realtor® from Edina, Minnesota, and broker at Edina Realty. “Additionally, NAR has been working with the FHA for years to establish new condominium loan policies. Our hard work has paid off, and this change will begin benefiting buyers, sellers, and our members as soon as this fall.”
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®About
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.