SWMI November home sales continue positive trendPublished 3:20pm Sunday, December 22, 2013
ST. JOSEPH, MI – “Continuing this year’s strong housing market trend, November sales, total dollar volume and prices showed gains over last year. The number of houses sold in November and year-to-date were a solid 10 percent ahead of last year. The November total dollar volume surpassed November 2012 by 14 percent and the year-to-date total dollar volume was up 20 percent. For the month of November, the average and median selling prices only established modest gains; while year-to-date the selling prices held to 9 percent and 15 percent, respectively, above a year ago,” stated Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS, Inc.
Walter continued, “Comparing back to November 2006, the peak year for our housing market, this past November numbers regained ground to be the third best November in the time period; falling behind November 2006 and 2007 as first and second, respectively.”
Specifically, there were 234 houses sold in November 2013 compared to 213 a year ago and year-to-date there were 2,869 versus 2,605 houses sold and closed. The total dollar volume in November was $43,536,082 compared to $38,169,620 in November 2012.
The solid sales performance for the last seven months helped to keep the year-to-date total dollar volume up 20 percent at $523,731,508 against $438,150,920 in 2012.
The average selling price in November of $186,052 was up a modest 4 percent over $179,200 from a year ago. Year-to-date the average selling price, $182,548, was up 9 percent over last year ($168,196).
The median selling price had just a slight gain of 2 percent in November ($115,500 vs. $112,900) compared to a year ago. The year-to-date median selling price increased 15 percent above last year rising to $121,000 compared to $105,000 in 2012. The median price is the price at which 50 percent of the homes sold were above that price and 50% were below.
In November, the number of bank-owned or foreclosed homes as a part of all closed transactions achieved a new record low percentage for the year at 15 percent. This was the lowest percentage recorded for the last five years. The peak percentage this year was 34 percent in February. The highest percentage, 75 percent, occurred in February 2009.
“Locally, the mortgage rate inched up to 4.39 from 4.36 in October. Nationally, the Freddie Mac mortgage rate in November was 4.26 percent up from 4.19 in October for a 30-year conventional mortgage.” Walter commented.
Nationally, existing-home sales fell in November, although median prices continue to show strong year-over-year growth, according to the National Association of Realtors.
Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops dropped 4.3 percent to a seasonally adjusted annual rate of 4.90 million in November from 5.12 million in October, and are 1.2 percent below the 4.96 million-unit pace in November 2012. This is the first time in 29 months that sales were below year-ago levels.
Lawrence Yun, NAR chief economist, said the market is being squeezed. “Home sales are hurt by higher mortgage interest rates, constrained inventory and continuing tight credit,” he said. “There is a pent-up demand for both rental and owner-occupied housing as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new home construction. As such, rents are rising at the fastest pace in five years, while annual home prices are rising at the highest rate in eight years.”
The national median existing-home price for all housing types was $196,300 in November, up 9.4 percent from November 2012. Distressed homes – foreclosures and short sales – accounted for 14 percent of November sales, unchanged from October; they were 22 percent in November 2012. A smaller share of distressed sales is contributing to price growth.
Regionally, existing-home sales in the Midwest fell 4.1 percent in November to a pace of 1.17 million, but are unchanged from a year ago. The median price in the Midwest was $151,100, which is 6.7 percent higher than November 2012.
First-time buyers accounted for 28 percent of purchases in November, unchanged from October; they were 30 percent in November 2012.
All-cash sales comprised 32 percent of transactions in November, up from 31 percent in October and 30 percent in November 2012. Individual investors, who account for many cash sales, purchased 19 percent of homes in November, unchanged from October and from November 2012. Last month, seven out of 10 investors paid cash.
NAR President Steve Brown, co-owner of Irongate, Inc., Realtors in Dayton, Ohio, noted that new rules defining the Qualified Mortgage will be going into effect soon. “New underwriting rules to protect borrowers, effective in January, will prohibit many loan features, set tighter limits on the amount of debt a borrower can have and still get a mortgage, and require that lenders accurately measure a borrower’s ability to repay,” he said.
“This means that qualified borrowers are getting a loan that they are very likely to be able to repay, but some borrowers may wind up paying much more for their mortgage, or not get a loan at all due to the tougher standards,” Brown said. “The new rules may tighten credit too much, but we’re hopeful regulators will make adjustments if this proves to be true.”
“The overall housing inventory in Southwest Michigan has dropped from 15.8-months supply of homes for sale in November 2010 to 9.3-months supply this year. On November 30th, we had 2,403 houses listed for sale compared to 2,509 a year ago.” stated Walter.
Nationally, the total housing inventory for all housing types at the end of November declined 0.9 percent to 2.09 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace, compared with 4.9 months in October. Unsold inventory is 5.0 percent above a year ago, when there was a 4.8-month.
The numbers reported for local sales include residential property in Berrien, and the western half of Van Buren and Cass counties. All three counties are included in numbers and percentages and do not reflect differences in any individual areas.