By Tony Wittkowski | Business Reporter | The Herald-Palladium
ST. JOSEPH — Nearly a decade after the housing market crash, it appears Southwest Michigan has caught up to what is considered the peak housing market year.
The number of houses sold in May reached the same amount that was sold in 2006. This was one of several instances May sales have fallen in line with 2006 numbers.
Gary Walter, executive vice president of the Southwestern Michigan Association of Realtors Inc., said he doesn’t know if this means the region has hit its peak for the decade or if there is more to come.
“We consider 2006 to be the peak housing market year for our area, and the number of homes sold in May was the highest number in a month of May for any year going back to 2006,” Walter said. “In May, the number of houses sold reached 357. In our history, we have only reached this number of closed sales three other times – once last year and twice in 2006.”
Comparing housing sales to last year in May, the market has increased 20 percent. May sales surpassed sales in April 2016 by 34 percent. Year-to-date, the number of houses sold was up 14 percent from May 2015.
The total dollar volume for May was up 23 percent, which set a record as the highest since 2006. Year-to-date, the total dollar volume was up 15 percent in May, marking the second-highest amount in year-over-year comparisons back to 2006.
The average selling price in May and the year-to-date average selling price became the highest since 2006. The average selling price in May increased more than 2 percent from May 2015.
From April to May 2016, the average selling price increased 12 percent. The year-to-date average selling price increased slightly to $186,207 in 2016 from $183,635 in 2015.
Inventory takes a hit
This region’s housing inventory continued to drop with a 9 percent decline from May of last year.
The inventory level is now at eight months worth of supply. At the end of May the housing inventory was 2,283 compared to 2,511 in May 2015. In comparison to 2010, the inventory level was at 16.4 months supply.
Lawrence Yun, National Association of Realtors chief economist, said the nation’s supply inventory isn’t any better.
Nationally, the total housing inventory at the end of May rose 1.4 percent to 2.15 million existing homes available for sale, but is still 5.7 percent lower than a year ago (2.28 million). Unsold inventory is at a 4.7-month supply at the current sales pace, which is unchanged from April.
“Existing inventory remains subdued throughout much of the country and continues to lag even last year’s deficient amount,” Yun said. “While new home construction has thankfully crept higher so far this year, there’s still a glaring need for even more, to help alleviate the supply pressures that are severely limiting choices and pushing prices out of reach for plenty of prospective first-time buyers.”
The number of bank-owned or foreclosed homes as a percentage of all transactions in the Southwest Michigan market was 11 percent in May – the same as in April. This marked the lowest percentage for the year.
According to the National Association of Realtors, existing-home sales sprang ahead in May to their highest pace in almost a decade. The uptick in demand this spring amidst lagging supply levels pushed the median sales price to an all-time high.