ST. JOSEPH, MI ?"December selling prices rebounded from the setback in prices in November helping to keep the market's year-end total dollar volume almost even with that in 2013. In fact, the total dollar volume was only $599, 111 higher in 2014. The number of houses sold slipped 3 percent below the number sold in 2013. So while 101 fewer houses were sold, the increase in selling prices boosted the 2014 housing market total dollar volume," stated Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS?, Inc.
Walter continued, "The year-to-date, average selling price in 2014 increased 3 percent when compared to 2013. At $185,441 for 2014, the year-to-date, average selling price has climbed steady every year since falling to $151,190 in 2009. We consider that overall the local housing market peaked in 2006. The year-to-date average selling price in 2006 was $198,794 and climb slightly to $199,613 in 2007. The 2014 year-to-date, average selling price is the third highest price since those years."
"The year-to-date median selling price, $129,000, in 2014 was an 8 percent increase over 2013. Comparing back to the peak market years, this is the highest year-to-date median selling price since it peaked in 2006 at $126,900. The year-to-date median selling price also fell to the lowest point in 2009, bottoming at $93,600" Walter stated.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
Inventory of houses for sale remained low in 2014. "We had seven months where the inventory was less than 11-months supply and four of those months had only an 8-months supply of houses for sale. The lower inventory level combined with the brutal weather during the first quarter of the year could have kept buyers out of the market and accounted for the 3 percent drop in home sales in 2014 (3055 vs 3156)," Walter said.
"We continue to be fortunate in respect to foreclosures or bank-owned properties as a part of sales transactions. For all of 2014, we had 16.4% of sales were banked-owned, .9% short sales, .6% auctions, other 4.7%, and 77.4% of all transactions were regular closed sales between buyers and sellers. The percentage of these transactions peaked in January at 36 percent and fell quickly to 11 percent in May. From May until October the percentage held to 11 or 12 percent. In November and December the percentage climbed to 17 percent."
"To compare the effect on the market of foreclosed or bank-owned properties over time, the highest percentage of these tractions peaked at 75 percent in 2009 then fell to 50 percent in 2010, 47 percent in 2011, 46 percent in 2012 and 34 percent in 2013. The lowest percentage month in 2009 was 34 percent and in 2013 the lowest percentage was 15," Walter reported.
The mortgage rate in December dropped to 4.01from 4.05 in November. In December 2013, the rate was 4.63. Nationally, the Freddie Mac mortgage rate in December fell to 3.86 percent, its lowest level since May 2013 (3.54 percent), and down from 4.00 percent in November. The average annual rate was 4.17 percent in 2014.?
Within Michigan, preliminary numbers indicate that the Southwestern Michigan housing market ranked in 12th place for the number of homes sold and 6th in the state for the average selling price.
Nationally, existing homes sales, despite low inventory conditions, bounced back in December and climbed above an annual pace of 5 million sales for the sixth time in seven months, according to the National Association of Realtors?. Median home prices for 2014 rose to their highest level since 2007, but total sales fell 3.1 percent from 2013.
Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 2.4 percent to a seasonally adjusted annual rate of 5.04 million in December from a downwardly-revised 4.92 million in November. From a year ago, December sales were higher by 3.5 percent and are now above year-over-year levels for the third straight month.
For all of 2014, there were 4.93 million sales, a 3.1 percent decline from 2013 (5.09 million). The national median existing-home price was $208,500, the highest since 2007 ($219,000) and a 5.8 percent increase from 2013 ($197,100).
Lawrence Yun, NAR chief economist, said sales picked up in December to close a 2014 that got off to a sluggish start but showed encouraging signs of activity the second half of the year. "Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated," he said. "Sales were measurably better in the second half ? up 8 percent compared to the first six months of the year."
The national median existing-home price for all housing types in December was $209,500, which is 6.0 percent above December 2013. This marks the 34th consecutive month of year-over-year price gains.
Regionally, existing-home sales in the Midwest fell 3.5 percent to an annual level of 1.09 million in December, and are now 2.7 percent below December 2013. The median price in the Midwest was $159,100, up 5.3 percent from a year ago.
The percent share of first-time buyers was 29 percent in December, down from 31 percent in November but up from a year ago (27 percent). First-time buyers in 2014 represented an average of 29 percent for the second straight year. A separate NAR survey?released in late 20144?revealed that the annual share of first-time buyers fell to its lowest level in nearly three decades.
All-cash sales were 26 percent of transactions in December, up from 25 percent in November and 32 percent in December of last year. Individual investors, who account for many cash sales, purchased 17 percent of homes in December, up from last month (15 percent) but down from December 2013 (21 percent). Sixty-three percent of investors paid cash in December.
Nationally, the total housing inventory for all housing types at the end of Decemberdropped 11.1 percent to 1.85 million existing homes available for sale, which represents a 4.4-month supply at the current sales pace ? down from 5.1 months in November. Unsold inventory is now 0.5 percent lower than a year ago (1.86 million).
"A drop in housing supply in December raises some affordability concerns in the months ahead as minimal selection and the potential for faster price appreciation could offset the demand from buyers encouraged by a stronger economy and sub-4 percent interest rates," said Yun. "Housing costs ? both rents and home prices ? continue to outpace wages and are burdensome for potential buyers trying to save for a down payment while looking for available homes in their price range."
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.? The local real estate market data can also be viewed at 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 1.2 million members involved in all aspects of the residential and commercial real estate industries.