ST. JOSEPH — Ten months into 2019, the Southwest Michigan housing market is making more gains compared to a year ago.
At the end of October, the monthly and year-to-date average and median selling prices and total dollar volume surpassed 2018 and set new records in the year-over-year comparison since 2006.
“Home sales in October were up 6 percent from October 2018,” said Alan Jeffries, association executive at the Southwestern Michigan Association of Realtors, Inc. “Year-to-date sales varied by 20 houses for less than 1 percent difference from 2018. The year-to-date sales in October 2017 still hold the record at 3,167 houses sold.”
The average selling price in October 2019 for houses sold in Southwest Michigan rose 7 percent to $262,720, up from $244,403 in October 2018.
Year-to-date, the average selling price increased by 4 percent.
Both the October and year-to-date median selling price jumped 11 percent. The October median selling price was $190,000 compared to $171,000 in October 2018. Year-to-date, the median selling price was $179,950 compared to $162,750 a year ago.
The higher selling prices in October 2019 pushed up the total dollar volume 14 percent from October 2018. Year-to-date, the total dollar volume rose 4 percent over October 2018.
Unfortunately, the inventory of houses for sale dropped 4 percent below that in October 2018. At 1,675 houses, the market has a 6.7-month supply of homes for sale. In October 2010, the market had 16.6-month supply with 3,385 houses for sale.
The number of bank-owned or foreclosed homes as a percentage of all transactions set a new record low at 2 percent in October. This was the seventh consecutive month the percentage has been under 6 percent. The highest percentage in October was 34 percent in 2009.
Locally, the mortgage rate increased slightly to 3.87 from 3.78 in September. Last year in October, the rate was 4.93. Nationally, the Freddie Mac mortgage rate in October inched up 3.78 from 3.64 in October for a 30-year conventional mortgage.
According to the National Association of Realtors, existing-home sales rose in October – a slight recovery from the declines seen in September.
The four major U.S. regions were split last month, with the Midwest and South seeing growth, and the Northeast and the West both reporting a drop in sales.
Total existing-home sales increased 1.9 percent from September to a seasonally-adjusted rate of 5.46 million in October. Despite lingering regional variances, overall sales are up 4.6 percent from a year ago.
NAR’s chief economist Lawrence Yun said the sales increase is encouraging, and he expects added growth in the coming months.
“Historically low interest rates, continuing job expansion, higher weekly earnings, and low mortgage rates are undoubtedly contributing to these higher numbers,” Yun said. “We will likely continue to see sales climb as long as potential buyers are presented with an adequate supply of inventory.”
The median existing-home price for all housing types in October was $270,900, up 6.2 percent from October 2018. October’s price increase marks 92 straight months of year-over-year gains.
Regionally, existing-home sales in the Midwest increased 1.6 percent to an annual rate of 1.29 million – up 2.4 percent from a year ago.
Nationally, the total housing inventory at the end of October sat at 1.77 million units, down about 2.7 percent from September and 4.3 percent from one year ago. Unsold inventory sits at a 3.9-month supply at the current sales pace, down from 4.1 months in September.
“The issuance of more housing permits is a very positive sign and a good step toward more inventory,” said Yun, citing the latest data for housing starts. “In order to better counter and even slow the increase in housing prices, home builders will have to bring additional homes on the market.”