By Staff
ST. JOSEPH – "Home sales are increasing each month over the previous month. April was 24 percent higher than March and May was 9 percent higher than April. However, our year-to-date comparison of May this year to May 2007 shows that we are behind by 17 percent. Our local real estate market is still adjusting to a number of factors that impact it, such as the changes in the buyer's qualifications for financing, foreclosed properties, total number of properties on the market, and local economic conditions. Our homes-for-sale inventory increased 1 percent from May 2007. This small increase keeps us at or slightly over a 13-month supply of homes for sale. It is still a buyer's market," stated Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS, Inc.
Nationally, sales of existing-home sales increased in May with buyers responding to lower home prices, according to the National Association of Realtors(r).
Existing-home sales – including single-family, townhomes, condominiums and co-ops increased 2.0 percent to a seasonally adjusted annual rate of 4.99 million units in May from a level of 4.89 million in April, but are 15.9 percent below the 5.93 million-unit pace in May 2007.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said buyers are seeing value in the current housing market. "Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages," he said. "Today's buyer plans to stay in a home for 10 years, which is a good strategy for building long-term wealth."
The number of houses sold and closed in SWMI in May was down 15.4 percent from May 2007 (237 vs. 280). Year-to-date, the number of homes sold to date is down 17 percent from last year. The total dollar volume for the month was down 26 percent verses last year ($40,377,044 vs. $54,505,687). Year-to-date total dollar amount is down 22 percent. The average selling price in May dropped 12 percent from May 2007($170,637 vs. $194,663). Year-to-date the average price is only down 6.5 percent from last year ($171,926 vs. $183,928). The median price in May increased 2.5 percent ($133,250 vs. $130,000) over May 2007. Year-to-date the median price is down 3.4 percent from last year ($115,950 vs. $120,000). The median price is the price at which 50 percent of the homes sold were above that price and 50 percent were below.
The national median existing-home price for all housing types was $208,600 in May, down 6.3 percent from a year ago when the median was $222,700.
Existing home sales the Midwest rose 5.5 percent in May to a pace of 1.16 million but are 16.5 percent lower than a year ago. The median price in the Midwest was $165,300, which is 0.7 percent below May 2007.
In SWMI, the average mortgage rate inched up slightly from 6.04 in April to 6.13 in May. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.04 percent in May from 5.92 percent in April; the rate was 6.26 percent in May 2007
Nationally, the total housing inventory at the end of May fell 1.4 percent to 4.49 million existing homes available for sale, which represents a 10.8-month supply3 at the current sales pace, down from a 11.2-month supply in April.
Lawrence Yun, NAR chief economist, said there's still a lot of inventory in the market. "The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down," he said. "Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets. Foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices."
Although conditions remain mixed around the country, unpublished snapshot data shows a number of areas are experiencing much higher sales activity than May 2007, including Sacramento, the San Fernando Valley and Monterey County in California; Sarasota, Fla.; and Battle Creek, Mich.
"Keep in mind that the volume of home sales is the primary driver of economic activity that is tied to housing," Yun said. "It'd be premature to say the improvement marks a turnaround. The market is fragile, so a first-time home buyer tax credit and a permanent raise in loan limits would be important steps to get the housing engine humming."
Locally, the housing inventory increased 1 percent in May. There are 3601 houses for sale in May 2008 compared to 3563 houses for sale in May 2007. This is a 13-month supply for the SWMI market.
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.
The Southwestern Michigan Association of REALTORS, Inc. is a professional trade association for real estate licensees and ancillary service providers for the real estate industry in Van Buren, Berrien and Cass counties. The Association is located at 3123 Lake Shore Drive St. Joseph, MI 49085, (269) 983.6375. They can also be contacted at www.swmar.com.