By Tony Wittkowski | Business Reporter | The Herald-Palladium
ST. JOSEPH — Southwest Michigan’s housing market kept up its record pace in January, but February failed to set any records in the year-over-year comparison for sales, total dollar volume and selling prices.
Despite this, George Lucas, board president of the Southwestern Michigan Association of Realtors, said January sales prices managed to keep year-to-date numbers up from 2016.
Comparing February results to January, the number of houses sold dropped 8 percent. With fewer homes sold and closed, the total dollar volume in February fell 28 percent.
“Homebuyers in February found average and median selling prices that were significantly lower than in January,” Lucas said. “The average selling price decreased 22 percent and the median selling price declined 20 percent.”
The number of houses sold in February 2017 slipped 4 percent from February 2016. Year-to-date, the number of houses in Southwest Michigan sold was up by nine houses in February 2017 for a 2 percent increase over February 2016.
At the end of February, the average time a home was on the market before it sold was 116 days – compared to 131 days in February 2016.
This was an 11 percent decrease from a year ago.
The total dollar volume for February was up slightly at 2 percent; rising from $30.4 million in 2016 to $31.1 million in February 2017.
Year-to-date, the total dollar volume was up 10 percent thanks to January’s robust start. The year-to-date, total dollar volume in February set the record in the year-over-year comparison back to 2006.
The average selling price in February 2017 increased 6 percent from February 2016. The year-to-date, average selling price was up 7 percent.
The median selling price of $114,000 in February 2017 was up 4 percent over the $109,950 set in February 2016. Year-to-date, the median selling price jumped 11 percent to $130,000 from $117,500 in 2016.
Comparing 2006 to 2017, the year-to-date average and median selling prices were the highest recorded over time in this region.
“The active listing of homes for sale fell 19 percent at the end of February 2017 with 1,512 homes for sale compared to 1,868 homes for sale in February 2016,” Lucas said. “This declining inventory gave the market just a 5.1-month supply of houses for home buyers to select from, compared to a 6.7-month supply a year ago and 13.9 months of inventory in 2010.”
Locally, the mortgage rate declined slightly to 4.31 from 4.32 percent in January. Last year in February, the rate was at 3.76. Nationally, the Freddie Mac mortgage rate in February was 4.16 percent compared to 4.19 percent in January for a 30-year conventional mortgage.
Across the nation
According to the National Association of Realtors, existing home sales slid in February but remained above last year’s levels – both nationally and in all major regions.
Total existing-home sales retreated 3.7 percent to a seasonally adjusted annual rate of 5.48 million in February from 5.69 million in January. Despite last month’s decline, February’s sales pace is still 5.4 percent above a year ago.
NAR chief economist Lawrence Yun said closings fell in February with too little property for sale and weakening affordability stifling buyers in most of the country.
“Realtors are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that’s pushing up price growth and pressuring the budgets of prospective buyers,” he said. “Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market.”
The median existing-home price for all housing types in February was $228,400, up 7.7 percent from February 2016. February’s price increase was the fastest since last January and marks the 60th consecutive month of year-over-year gains.
Regionally, existing-home sales in the Midwest sales fell 7 percent to an annual rate of 1.2 million in February, but are still 2.6 percent above a year ago. The median price in the Midwest was $171,700, up 6.1 percent from a year ago.
First-time buyers were 32 percent of sales in February, which is down from 33 percent in January and up from 30 percent a year ago.
“The affordability constraints holding back renters from buying is a signal to many investors that rental demand will remain solid for the foreseeable future,” Yun said. “Investors are still making up an above average share of the market right now despite steadily rising home prices and few distressed properties on the market.”
Nationally, the total housing inventory at the end of February increased 4.2 percent to 1.75 million existing homes available for sale, but is still 6.4 percent lower than a year ago and has fallen year-over-year for 21 straight months.
Unsold inventory is at a 3.8-month supply at the current sales pace.
(Author’s Note: This article was originally published on March 26, 2017)