ST. JOSEPH, MI ? ?The housing market in December certainly saw no freeze in the overall process. The number of houses sold, total dollar volume, and selling prices were up double digits over December 2014. All of 2015 showed a nice increase over 2014 making buyers and sellers happy. If there is a negative, it is the low housing inventory which continued to decline though out 2015,? stated Gary Walter, EVP, of the?Southwestern Michigan Association of REALTORS?, Inc.
?In December 2015, 252 houses were sold compared to 229 in December 2014; which was a 10 percent increase. This increase also made December 2015, the highest selling December since 2005. The year-to-date total number of houses sold through December 31, 2015 was also 10 percent higher than in 2014 (3302 vs 3004),? said Walter.
The total dollar volume in December was boosted 30 percent by the increase in the number of homes sold ($52,058,013 vs. $40,116,596). This was also the highest total dollar volume in December since December 2005. Year-to-date, the total dollar volume was up 15 percent over last year ($643,226,393 vs. $561, 007,201).
The average selling price in December increased 18 percent from December 2014 ($206, 579 vs. $175, 182) and also set the record for the highest average selling price since December 2005. The average selling price in December rose 11 percent from the average selling price in November of $185,992. Year-to-date, the average selling price stepped up 4 percent from 2014 ($194, 799 vs. $186, 753).
At $130,000, the median selling price in December 2015 increased 12 percent from December 2014 when the median selling price was $116,000. In November, the median selling price was $120,000. Year-to-date, the median selling price was up 3 percent over 2014 ($133, 000 vs. $129, 000). The year-to-date median selling price was the highest set over the last 10 years.
The median price is the price at which 50% of the homes sold were above that price and 50% were below.
?The continuing drop in the housing market inventory was an issue all of 2015. In December, the number of houses for sale dropped 8 percent from December 2014. At the current level of 1850 houses we have a 6.7-months supply of homes for buyers at the current pace of sales. This was the lowest level for the year with the inventory peaking in July to a 10.2-months supply. By comparison, in December 2011 there were 2461 houses for sale which was a 12.7-months supply,? stated Walter.
The number of bank-owned or foreclosed homes as a part of all closed transactions decreased to 13 percent from 18 percent in November. The 9 percent reached in July and October this year was the lowest reached since 2009. In February 2009, 75 percent of all transactions were bank-owned or foreclosed homes.
Locally, the mortgage rate increased from 4.10 in November to 4.6 in December. Nationally, the Freddie Mac mortgage rate in December was 3.96 compared to 3.94 in November for a 30-year conventional mortgage.
According to the National Association of Realtors?, existing-home sales snapped back solidly in December as more buyers reached the market before the end of the year, and the delayed closings resulting from the rollout of the Know Before You Owe initiative pushed a portion of November's would-be transactions into last month's figure. Led by the South and West, all four major regions saw large increases in December.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, ascended 14.7 percent to a seasonally adjusted annual rate of 5.46 million in December from 4.76 million in November. After last month's turnaround (the largest monthly increase ever recorded), sales are now 7.7 percent above a year ago.
Lawrence Yun, NAR chief economist, says December?s robust bounce back caps off the best year of existing sales (5.26 million) since 2006 (6.48 million). ?While the carryover of November?s delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015,? he said. ?Additionally, the prospect of higher mortgage rates in coming months and warm November and December weather allowed more homes to close before the end of the year.?
The median existing-home price for all housing typesin December was $224,100, up 7.6 percent from December 2014 ($208,200). Last month's price increase marks the 46th consecutive month of year-over-year gains.
Regionally, existing-home sales in the Midwestsales jumped 10.9 percent to an annual rate of 1.22 million in December, and are now 9.9 percent above December 2014. The median price in the Midwest was $171,000, up 7.5 percent from a year ago.
?First-time buyers were for the most part held back once again in 2015 by rising rents and home prices, competition from vacation and investment buyers and supply shortages,? says Yun. ?While these headwinds show little signs of abating, the cumulative effect of strong job growth in recent years and young renters? overwhelming interest to own a home should lead to a modest uptick in first-time buyer activity in 2016.?
The percent share of first-time buyers was at 32 percent in December (matching the highest share since August), up from 30 percent in November and 29 percent a year ago. First-time buyers in all of 2015 represented an average of 30 percent, up from 29 percent in both 2014 and 2013. A separate NAR survey released in late 20154 revealed that the annual share of first-time buyers was at its lowest level in nearly three decades.
All-cash sales were 24 percent of transactions in December (27 percent in November) and are down from 26 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in December, down from both 16 percent in November and 17 percent a year ago. Sixty-four percent of investors paid cash in December.
Nationally, the total housing inventory at the endof December dropped 12.3 percent to 1.79 million existing homes available for sale, and is now 3.8 percent lower than a year ago (1.86 million). Unsold inventory is at a 3.9-month supply at the current sales pace, down from 5.1 months in November and the lowest since January 2005 (3.6 months).
?Although some growth is expected, the housing market will struggle in 2016 to replicate last year?s 7 percent increase in sales,? adds Yun. ?In addition to insufficient supply levels, the overall pace of sales this year will be constricted by tepid economic expansion, rising mortgage rates and decreasing demand for buying in oil-producing metro areas.?
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 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. The Association phone number is (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 1.1 million members involved in all aspects of the residential and commercial real estate industries.