By Tony Wittkowski | Business Reporter | The Herald-Palladium
ST. JOSEPH — For the first quarter of 2016, the Southwest Michigan housing market was moving at a good pace in both the number of houses sold and the total dollar volume in sales.
The market had month-over-month increases in the number of houses sold even with the selling prices in constant fluctuation.
The number of houses sold increased 12 percent over the first quarter in 2015. Gary Walter, executive vice president of the Southwestern Michigan Association of Realtors Inc., said the numbers in March were similar to the same time period in 2015.
“There was just a two-house difference between the number of houses sold in March 2016 versus March 2015,” Walter said. “Contributing to the first quarter results, housing sales in January were up 30 percent and in February sales were up 14 percent over the same months in 2015.”
The total dollar volume for the first quarter was up 13 percent. The first quarter results were boosted by double-digit total dollar volume increases in January and February.
In March, the total dollar volume increased 3 percent.
With bouncing average selling prices, the average selling price at the end of the first quarter settled to within 1 percent of 2015.
In January, the average selling price was $200,335, which dropped to $156,965 in February before rebounding to $167,562 in March. The average selling price in March 2016 up 4 percent compared to last year.
The median selling prices in the first quarter also fluctuated. However, the median selling price at the end of the first quarter in 2016 was up 10 percent over the first quarter in 2015.
In January, the median selling price was $134,000 which dropped to $109,950 in February and rebounded to $125,900 in March. The year-to-date median selling price in 2016 was the highest for any year going back to 2006.
The number of bank-owned or foreclosed homes as a percentage of all transactions in the Southwest Michigan market increased to 20 percent in March.
Locally, the mortgage rate increased to 3.84 from 3.76 percent in February. Last year in March, the rate was at 3.91. Nationally, the Freddie Mac mortgage rate in March was 3.67 percent compared to 3.66 percent in February for a 30-year conventional mortgage.
Across the nation
According to the National Association of Realtors, existing-home sales bounced back in March and remained slightly up from a year ago.
Total existing-home sales jumped 5.1 percent to a seasonally adjusted annual rate of 5.3 million in March from a revised 5.07 million in February. Sales rose in all four major regions last month and are up from March 2015.
NAR chief economist Lawrence Yun said home sales had a nice rebound in March following February’s “uncharacteristically large decline.”
“Closings came back in force last month as a greater number of buyers – mostly in the Northeast and Midwest – overcame depressed inventory levels and steady price growth to close on a home,” Yun said. “Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well.”
The median existing-home price for all housing types in March was up 5.7 percent from March 2015. March’s price increase marks the 49th consecutive month of year-over-year gains.
“The choppiness in sales activity so far this year is directly related to the unevenness in the rate of new listings coming onto the market to replace what is, for the most part, being sold rather quickly,” Yun said.
Regionally, existing-home sales in the Midwest jumped 9.8 percent to an annual rate of 1.23 million in March, which is 0.8 percent above March 2015. The median price in the Midwest was up 7.0 percent from a year ago.
The share of first-time buyers was 30 percent in March, unchanged both from February and a year ago.
“With rents steadily rising and average fixed rates well below 4 percent, qualified first-time buyers should be more active participants than what they are right now,” Yun said. “Unfortunately, the same underlying deterrents impacting their ability to buy haven’t subsided so far in 2016.
“Affordability and the low availability of starter homes is still a major barrier for (first-time buyers) in most markets.”
Nationally, the total housing inventory at the end of March increased 5.9 percent in existing homes available for sale, but is still 1.5 percent lower than a year ago. Unsold inventory is at a 4.5-month supply at the current sales pace, up from 4.4 months in February.