House sales increase for third month in a row

By Tony Wittkowski | Business Reporter | The Herald-Palladium

ST. JOSEPH — The number of houses sold in Southwest Michigan – along with their selling prices – have increased month over month since February’s sales hike.

Realtors and other housing officials took note as the number of houses sold in April increased 10 percent over April from last year. Sales in April were within range of those in April 2006 and 2007, which were considered the biggest years before the housing bubble burst.

“Sales were significantly ahead of the peak years in April when the number of houses sold were 691 and 622 for 2006 and 2007, respectively,” said Gary Walter, executive vice president of the Southwestern Michigan Association of Realtors Inc.

The housing inventory level, which has troubled Realtors for the last few years, increased a small amount in April compared to March.

Since April 2010, the housing inventory has dropped by almost 1,500 houses. The housing inventory in April 2016 was down 9 percent from the number of houses for sale in the April 2015. At the current level of inventory, there is a 7.6-month supply of houses. In 2010, the inventory level was 15.8-months supply.

Another positive for the Southwest Michigan market in April was the drop in the number of foreclosed or bank-owned properties as a percentage of all closed transactions.

The number of bank-owned or foreclosed homes as a percentage of all transactions in the local housing market dropped to 11 percent in April from 20 percent in March. The April percentage was the lowest mark for the year.

The average selling price in April and year-to-date average selling price were almost even with April 2015. The average selling price was $186,172 in April 2016 compared to $186,327 in April 2015.

The median selling price of $140,000 in April was up 1 percent over $138,250 set in April 2015. From March, the median selling price increased 11 percent. The median price is the price at which 50 percent of the homes sold were above that price and 50 percent were below.

Locally, the mortgage rate declined to 3.73 from 3.84 percent in March. Last year in April, the rate was at 3.83. Nationally, the Freddie Mac mortgage rate in April was 3.61 percent.

Across the U.S.

According to the National Association of Realtors, despite ongoing inventory shortages and faster price growth, existing-home sales rate sustained its recent momentum.

Total existing-home sales rose 1.7 percent to a seasonally adjusted annual rate of 5.45 million in April from an upwardly revised 5.36 million in March. After last month’s gain, sales are up 6 percent from April of last year.

NAR chief economist Lawrence Yun said April’s sales increase signals slowly building momentum for the housing market this spring.

“Sales activity overall was at a healthy pace last month as very low mortgage rates and modest seasonal inventory gains encouraged more households to search for and close on a home,” he said. “Sales are meaningfully higher than a year ago in much of the country.”

The median existing-home price for all housing types in April was $232,500 – up 6.3 percent from April 2015. April’s price increase marks the 50th consecutive month of year-over-year gains.

“The temporary relief from mortgage rates currently near three-year lows has helped preserve housing affordability this spring,” Yun said. “But there’s growing concern a number of buyers will be unable to find homes at affordable prices if wages don’t rise and price growth doesn’t slow.”

Nationally, the total housing inventory at the end of April increased 9.2 percent to 2.14 million existing homes available for sale, but is still 3.6 percent lower than a year ago. Unsold inventory is at a 4.7-month supply, up from 4.4 months in March.

Contact Tony Wittkowski at twittkowski@TheHP.com or (269) 932-0358. Follow him on Twitter: @tonywittkowski.

(Author’s Note: This article was originally published on May 29, 2016)

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