By Tony Wittkowski | Business Reporter | The Herald-Palladium
ST. JOSEPH — The number of houses sold in November 2015 were about even with 2014 in the Southwest Michigan housing market. Despite the similar totals, the selling prices were vastly different.
In November 2015, 222 houses were sold compared to the 224 in November 2014. However, the average selling price for the month was up 27 percent, and the median selling price was up 18 percent from 2014.
“The total number of houses sold … in 2015 surpasses all houses sold in 2014,” said Gary Walter, executive vice president of the Southwestern Michigan Association of Realtors Inc. “At the end of November (2015), 3,050 houses have sold, which was the highest number sold year-to-date by November for the last 10 years. This number puts the market 10 percent ahead of the houses sold by the end of November 2014.”
The total dollar volume in November at $41.2 million was 26 percent higher than the total dollar volume set in November 2014 at $32.7 million. Year-to-date, the total dollar volume was up 13 percent over last year.
The average selling price in November increased 27 percent from November 2014. However, the average selling price in October was about $214,000 – bringing in a 13 percent decrease in average selling prices. Year-to-date, the average selling price is up 3 percent.
The median selling price in November 2015 jumped 18 percent from November 2014, while the year-to-date median selling price was up 3 percent over this time in 2014. The year-to-date median selling price was also the highest set over the last decade.
The median price is the price at which 50 percent of the houses sold were above that price and 50 percent were below.
“The number of bank-owned or foreclosed homes as a part of all closed transactions increased to 18 percent from 9 percent set in October,” Walter said. “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.”
In the Tri-County area, the mortgage rate increased from 3.95 percent in October to 4.10 percent in November. Nationally, the Freddie Mac mortgage rate in November was 3.94 percent compared to 3.8 in October. A year ago, the average commitment rate was 4 percent.
Across the country
According to the National Association of Realtors, existing-home sales dropped off considerably in November to the slowest pace in 19 months, but some of the decrease was because of a rise in closing time frames that might have pushed some transactions into December. All four major regions saw sales declines in November.
Total existing-home sales, which are completed transactions that include single-family homes, town homes, condominiums and co-ops, fell 10.5 percent to a seasonally adjusted annual rate of 4.76 million in November. After last month’s decline, sales are now 3.8 percent below a year ago – the first year-over-year decrease since September 2014.
Lawrence Yun, NAR chief economist, said multiple factors led to November’s sales decline, but the primary reason could be an anomaly as the industry adjusts to the new “Know Before You Owe” mortgage disclosure rule.
“Sparse inventory and affordability issues continue to impede a large pool of buyers’ ability to buy, which is holding back sales,” Yun said. “However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it’s highly possible the stark sales decline wasn’t because of sudden, withering demand.”
The share of first-time buyers was at 30 percent in November, down from 31 percent both in October and a year ago.
Despite first-time buyers’ continued absence from the market, NAR’s inaugural quarterly Housing Opportunities and Market Experience survey found an overwhelming majority of current renters who are 34 years or younger want to own a home in the future. The top reason given by renters for not owning was the inability to afford to buy.
Matching the highest share since January, all-cash sales rose to 27 percent of transactions in November and are up from 25 percent a year ago. Individual investors, who account for many cash sales, bought 16 percent of homes in November, up from 13 percent in October and 15 percent a year ago.
Nationally, the total housing inventory at the end of November decreased 3.3 percent to 2.04 million existing homes available for sale, and is now 1.9 percent lower than a year ago. Unsold inventory is at a 5.1-month supply at the current sales pace, up from 4.8 months in October.
(Author’s Note: This article was originally published on Jan. 2, 2016)