Southwest Michigan housing market sees fall in July sale prices

By Tony Wittkowski | Business Reporter | The Herald-Palladium

ST. JOSEPH — Things trended downward for the Southwest Michigan housing market in July.

The number of houses sold and the total dollar volume and selling prices dipped in July compared to June. The number of houses sold dropped 5 percent from June, while the average selling price fell 12 percent.

Comparing July 2016 to July 2015, the number of houses sold decreased 4 percent while the number of houses sold year-to-date was up 8 percent.

Even with the sales decline from a year ago, selling prices still increased the total dollar volume for July 2016 by 4 percent.

Gary Walter, executive vice president of the Southwestern Michigan Association of Realtors Inc., said a bad month was expected among the year-over-year growth.

“For the last three months we have been setting records for number of houses sold, total dollar volume and or selling prices when compared back to 2006,” Walter said. “In July 2016, the total dollar volume, median selling price and the year-to-date average and median selling prices for the month of July were the highest in the year-over-year comparison.”

The average selling price in July 2016 was $206,179 compared to $190,513 in July 2015 for an 8 percent increase. The median selling price was up 15 percent in July 2016 and set the record as the highest for a month of July since 2006.

The number of bank-owned or foreclosed homes as a percentage of all transactions in the Southwest Michigan market increased to 10 percent in July. This was up from 9 percent in June.

Locally, the mortgage rate dropped to 3.5 percent from 3.65 in June. In July 2015, the rate was 4.19. Nationally, the Freddie Mac mortgage rate in July was 3.44 compared to 3.57 in June 2016.

Across the country

According to the National Association of Realtors, existing home sales lost momentum in July and decreased year-over-year for the first time since November 2015. Analysts say the decrease comes at the expense of extremely low inventory.

Total existing-home sales fell 3.2 percent to a seasonally adjusted annual rate of 5.3 million in July from 5.5 million in June. For only the second time in the last 21 months, sales are now below a year ago.

NAR chief economist Lawrence Yun said existing sales fell off track in July after steadily climbing the last four months.

“Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country,” he said. “The lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”

The median existing home price for all housing types in July was about $244,000, up 5.3 percent from July 2015. July’s price increase marks the 53rd consecutive month of year-over-year gains.

“Although home sales are still expected to finish the year at their strongest pace since the downturn, the housing market is undershooting its potential because of inadequate existing inventory combined with home construction failing to catch up with demand,” Yun said. “Sales in all regions are now flat or below a year ago and price growth isn’t slowing to a healthier pace.”

Nationally, the total housing inventory at the end of July inched 0.9 percent higher to 2.1 million existing homes available for sale, but is still 5.8 percent lower than a year ago and has now declined year-over-year for 14 straight months.

Unsold inventory is at a 4.7-month supply across the country, which is up from 4.5 months in June.

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 Aug. 28, 2016)
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