By Tony Wittkowski | Business Reporter | The Herald-Palladium
May provided a good start to this year’s selling season in the Southwest Michigan housing market.
The number of houses sold in May increased 23 percent since April and the total dollar volume per month increased 34 percent. The average selling price in May at $202,729 was 9 percent higher than in April and the median selling price increased 4 percent to $144,000 from $138,250.
“We are still working with a low inventory of houses for sale,” said Gary Walter, executive vice president of the Southwestern Michigan Association of Realtors Inc. “So far this year, our inventory has ranged from 7.7 to 9.7 months supply of homes for sale.
“Our inventory of homes for sale in May fell 9 percent from the level we had in May 2014. In May, we had 2,511 houses for sale giving us just a 9.7-months supply of houses to meet the current demand.”
In comparison to May from last year, the number of houses sold was up 11 percent. Year-to-date, the number of houses sold was up 10 percent.
The total dollar volume in May 2015 at $60.2 million was up 10 percent over last year in May, which came in at $54.4 million. Year-to-date, the total dollar volume was up 11 percent.
“Selling prices held very close to last year’s selling prices,” Walter said. “In May, the average selling price varied by just $584. The average selling prices in May 2015 and May 2014 were the highest set in a month of May going back to 2006, which we consider to be the peak market year in our area.”
The median selling price dipped 1 percent to $144,000 in May 2015 from $145,450 in May 2014. The median selling prices in May 2015 and May 2014 were also the highest set in a month of May since 2006.
In May, the number of bank-owned or foreclosed houses as a part of all closed transactions in the Southwest Michigan market dropped again to 11 percent. In April, the percentage had dropped to 13.
A national increase
According to the National Association of Realtors, fueled by an increase in the share of sales to first-time buyers, existing-home sales increased in May to their highest pace in nearly six years.
Total existing-home sales, which are completed transactions that include single-family homes, townhouses and condominiums and co-ops, rose 5.1 percent to a seasonally adjusted annual rate of 5.35 million in May from an upwardly revised 5.09 million in April.
Sales have now increased year-over-year for eight consecutive months and are 9.2 percent above a year ago.
NAR Chief Economist Lawrence Yun said May home sales rebounded strongly following April’s decline and are now at their highest pace since November 2009.
“Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers,” he said. “However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated.”
The national median existing-home price for all housing types in May was $228,700, which is 7.9 percent above May 2014. This marks the 39th consecutive month of year-over-year price gains.
The percent of first-time buyers rose to 32 percent in May, up from 30 percent in April and matching the highest share since September 2012. A year ago, first-time buyers represented 27 percent of all buyers.
“The return of first-time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low down payment programs,” Yun said.
All-cash sales were 24 percent of transactions in May for the third straight month and are down from a year ago when it was 32 percent. Individual investors, who account for many cash sales, bought 14 percent of homes in May, unchanged from last month and down from 16 percent in May 2014.
The total housing inventory at the end of May across the country increased 3.2 percent to 2.2 million existing homes available for sale, and is 1.8 percent higher than a year ago.
(Author’s Note: This article was originally published on July 5, 2015)