By Tony Wittkowski | Business Reporter | The Herald-Palladium
ST. JOSEPH — Buyers have not been deterred by the shrinking inventory of homes for sale in Southwest Michigan.
Last year, the housing market set records for home sales and selling prices nearly every month. In the year-over-year comparison, 2016 became the new peak year for the local housing market. According to Philip Amodeo, association executive of Southwestern Michigan Association of Realtors Inc., 2017 is keeping pace after the first month.
“It was a long road back from 2006, the previous peak year, but January 2017 continued the record shattering trend,” Amodeo said. “The number of houses sold, total dollar volume, and the average and median selling prices were higher than in January 2016 and also were higher than any previous January going back to 2006.”
There were 203 houses sold in January 2017 compared to 187 in January 2016 for a 9 percent increase.
At the end of January, the average time a home was on the market before it sold was 139 days compared to 115 days in January 2016. This was a 21 percent increase.
The total dollar volume in January 2017 was up 16 percent over January 2016 and the average selling price of $214,278 in January 2017 jumped 7 percent from the average selling price in January 2016.
For January 2017, the median selling price of $142,000 increased 6 percent over the median selling price in January of last year.
“The inventory level of houses for sale dropped to a new low of 4.9-months supply at the end January 2017 (for the region), Amodeo said. “There were 1,465 houses on the market compared to 1,830 in January 2016. This was a 20 percent decline from last year.”
Locally, the mortgage rate decreased from 4.37 in December to 4.32 in January. Nationally, the Freddie Mac mortgage rate in January was 4.19 compared to 4.32 in December for a 30-year conventional mortgage.
Across the country
According to the National Association of Realtors, existing-home sales stepped out to a fast start in 2017 and increased in January to the fastest pace in almost a decade.
All major regions except for the Midwest saw sales gains last month.
Total existing-home sales expanded 3.3 percent to a seasonally adjusted annual rate of 5.69 million in January from a revised 5.51 million in December 2016.
January’s sales pace is 3.8 percent higher than a year ago and surpasses November 2016 as the strongest month since February 2007.
NAR chief economist Lawrence Yun said January’s sales gain signals resilience among consumers even in a rising interest rate environment.
“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” he said. “Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.”
The median existing-home price for all housing types in January was $228,900, up 7.1 percent from January 2016. January’s price increase was the fastest since last January and marks the 59th consecutive month of year-over-year gains.
Regionally, existing-home sales in the Midwest decreased 1.5 percent to an annual rate of 1.29 million in January, and are 0.8 percent below a year ago. The median price in the Midwest was $174,900, up 6.5 percent from a year ago.
Nationally, the total housing inventory at the end of January rose 2.4 percent to 1.69 million existing homes available for sale, but is still 7.1 percent lower than a year ago and has fallen year-over-year for 20 straight months.
Unsold inventory is at a 3.6-month supply at the current sales pace – unchanged from December 2016.
(Author’s Note: This article was originally published on March 11, 2017)