ST. JOSEPH, Mich. — “The housing market in Southwestern Michigan at the end of May has not quite caught up to where it was a year ago. Many factors could be involved including the brutal winter weather, changes in time to close transactions and lower inventory levels,” stated Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS, Inc. “Bottom line is fewer houses were sold.  However, both buyers and sellers benefited during May. Sellers saw a significant increase in average and median selling prices. Buyers had an increasing selection of homes to choose from and the lowest mortgage rate since June of last year.

“Last year in May the number of houses sold spiked to 314. This past May only 268 houses sold, a drop of 15 percent. We are still gaining some momentum.  In April, 224 houses were sold and in March 195 were sold.  Year-to-date, the number of houses sold was down by 7 percent from May 2013 (1003 vs. 1083),” he said.

The average selling price in May was up 20 percent compared to May 2013 ($203,313 vs. $169,352).  Year-to-date, the average selling price was up 9 percent ($181,349 vs. $165,837).

The median selling price was up double digits for the month of May also.

At $145,450 versus $130,000 in May 2013, the median selling price increased 12 percent. Year-to-date, the median selling price was up 9 percent ($119,250 vs. $109,000).

The higher selling prices helped to keep the total dollar volume up 2 percent for the month and 1 percent for the year-to-date.

“Tracking selling prices for the month of May back to the peak market years, 2006-2007, the average and median selling prices in May 2014 were the highest to date. Looking at May year-to-date total dollar volume and May year-to-date average and median selling prices, May 2014 numbers fall in third place behind those numbers recorded in 2006 and 2007,” Walter said.

The median price is the price at which 50 percent of the homes sold were above that price and 50 percent were below.

“The number of bank-owned or foreclosed homes as a part of all closed transactions in May dropped to11 percent, the lowest percentage since 2009. In April, the percentage was 23 percent.

Previously, the lowest percentage was 15 percent in November 2013. The highest percentage this year was 36 percent in January. The highest percentage occurred in February 2009 when 75 percent of all transaction involved bank-owned or foreclosed homes.” Walter said.

The overall housing inventory increased from 9.8-months supply in April to 11-months supply in May. The inventory level in May 2013 was 12.1-months supply.

Locally, the mortgage rate dropped slightly to 4.25 in May from 4.48 in April.  In May 2013, the mortgage rate was 3.69. Nationally, the Freddie Mac mortgage rate in May was 4.19 for a 30-year conventional mortgage.

Nationally, existing home sales rose strongly in May and inventory gains continued to help moderate price growth, according to the National Association of Realtors. All four regions of the country experienced sales gains compared to a month earlier.

Total existing home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops rose 4.9 percent to a seasonally adjusted annual rate of 4.89 million in May from an upwardly-revised 4.66 million in April, but remain 5.0 percent below the 5.15 million-unit level in May 2013. The 4.9 percent month-over-month gain in May was the highest monthly rise since August 2011 (5.5 percent).

Lawrence Yun, NAR chief economist, said current sales activity is rebounding after the lackluster first quarter. “Home buyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year,” he said. “Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates.”

The national median existing-home price for all housing types in May was $213,400, which is 5.1 percent above May 2013. “Rising inventory bodes well for slower price growth and greater affordability, but the amount of homes for sale is still modestly below a balanced market. Therefore, new home construction is still needed to keep prices and housing supply healthy in the long run,” Yun said.

Regionally, existing-home sales in the Midwest jumped 8.7 percent to an annual rate of 1.13 million in May, but are still 7.4 percent below May 2013. The median price in the Midwest was $165,900, up 4.0 percent from a year ago.

The percent share of first-time buyers continued to underperform, representing less than one- third of all buyers at 27 percent in May, down from 29 percent in April; they were 29 percent in April 2013.

All-cash sales comprised 32 percent of transactions in May, unchanged from last month and down from 33 percent in May 2013. Individual investors, who account for many cash sales, purchased 16 percent of homes in May, down from 18 percent in April; they were 18 percent in May 2013. Sixty-eight percent of investors paid cash in May

Nationally, the total housing inventory at the end of May climbed 2.2 percent to 2.28 million existing homes available for sale, which represents a 5.6-month supply at the current sales pace, down slightly from 5.7 months in April. Unsold inventory is 6.0 percent higher than a year ago, when there were 2.15 million existing homes available for sale.

NAR President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio, said housing fundamentals are showing slight improvement in markets across the country. “Many potential buyers were left on the sidelines beginning last summer as affordability declined amidst rising home prices and interest rates,” he said. “The temporary pause in rising interest rates and more homes for sale is good news – especially for first-time home buyers – who likely have a better chance in upcoming months to make a competitive offer that’s in return accepted by the seller.”

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.