By Tony Wittkowski | Business Reporter | The Herald-Palladium
A new report shows the housing market in the Berrien County area is one of the best in the country for the third quarter this year.
Nationwide’s Leading Index of Healthy Housing Markets ranked the Niles-Benton Harbor area as the eighth healthiest housing market in the country.
The report is a data-driven view of the performance of housing markets based on health indicators for the national housing market, Nationwide reported. The data was taken from 400 metropolitan statistical areas – also referred to as MSAs – across the country.
Other Michigan cities ranked in the top 10 included Battle Creek, Lansing and Muskegon.
Out of each region tested, the Niles-Benton Harbor area had the highest performance ranking increase for the third quarter for MSAs.
Gary Walter, executive vice president of the Southwestern Michigan Association of Realtors Inc., said this ranking came as no surprise when looking at August sales.
The housing market set a new record for the highest number of houses sold in August since the peak year in 2006. With 374 houses sold, the region’s market in August was up 13 percent when compared to August 2014.
“This nice leap in sales occurred when the inventory of homes dropped 11 percent from last year in August,” Walter said. “The total dollar volume in August also now ranks as the highest total dollar volume generated in the month of August since 2006.”
Another figure for the housing market in Southwest Michigan that saw gains was the average selling price.
In July, the average selling price dipped slightly to $190,513. In August, the average selling price increased to $214,765. In August 2014, the average selling price was $199,295, which was 8 percent lower than the current average selling price.
The median selling price in August 2015 was $159,575 – an 18 percent increase from July and a 7 percent increase when compared to August last year. The median price is the price at which 50 percent of the homes sold were above that price and 50 percent were sold below.
“The number of bank-owned or foreclosed homes as a part of all closed transactions in August increased to 12 percent,” Walter said. “The 9 percent set (in July) is the lowest reached since 2009.”
Lars Petzke, broker and owner at RE/MAX by the Lake, said it’s been busy all summer long for Southwest Michigan real estate agents.
“Personally, this is the highest number of transactions I have done in almost 10 years,” he said. “Fairplain has seen more activity in the past few years. The city of St. Joe has been hotter than ever. The demand is high because the area is so popular. A lot of out-of-towners are trying to take advantage of what St. Joseph has to offer.”
National sales go down
According to the National Association of Realtors, existing-home sales dipped in August despite slowing price growth and a positive turnaround in the share of sales to first-time buyers. This comes after three straight months of gains.
Total existing-home sales, which are completed transactions, fell 4.8 percent to a seasonally adjusted annual rate of 5.3 million in August from the recorded 5.5 million in July. Despite August’s decline, U.S. sales have risen year-over-year for 11 consecutive months.
NAR chief economist Lawrence Yun said home sales in August lost some momentum to close out the summer.
“Sales activity was down in many parts of the country last month as the persistent summer theme of tight inventory levels likely deterred some buyers,” he said. “The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year.”
The national median existing-home price for all housing types in August was $228,700, which is 4.7 percent above August 2014.
The percent share of first-time buyers rebounded to 32 percent in August, up from 28 percent in July, and matched the highest share of the year set in May.
A year ago, first-time buyers represented 29 percent of all buyers.
All-cash sales decreased slightly to 22 percent of transactions in August and are down from a year ago.
Nationally, the total housing inventory at the end of August rose 1.3 percent to 2.29 million existing homes available for sale. However, it is 1.7 percent lower than a year ago, which garnered 2.33 million existing homes. Unsold inventory is at a 5.2-month supply at the current sales pace, up from 4.9 months in July.
NAR released a study in earlier September that examined new home construction in relation to job gains. The findings revealed that home building activity is currently insufficient in a majority of metro areas and is contributing to the ongoing housing shortages and unhealthy price growth in many markets.
“With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall,” Yun said.
(Author’s Note: This article was originally published on Sept. 25, 2015)