By Staff
ST. JOSEPH – "The 20-percent gain we had in the number of homes sold and closed in September over August was lost in October. October was 20 percent behind September. However, the total dollar amount in October was only 6 percent behind September's total dollars. October's average selling price at $220,046 was up 18 percent and the median price was up 3 percent over September.
"While the increases in prices are encouraging, the fewer homes being sold is not. Heading into the last two months and the holiday season, we will probably continue to see a month-to-month decline in homes being sold based on trends from past years," states Gary Walter, EVP, of the Southwestern Michigan Association of Realtors Inc.
"Year-to-date numbers reveal a more steady trend in the market. We had a slow start to the year but from May on the number of homes sold each month compared to the same month in 2007 remained 17-19 percent behind last year.
"The YTD total dollar volume ran 21-26 percent behind, YTD average price 4-8 percent behind and YTD median price 2-7 behind last year's figures.
"Our market is moving to a more sustainable market. The market in southwest Michigan is very diverse, ranging from homes in rural areas to high-rise condos along Lake Michigan and the numbers we report cover almost three counties.
"The best way of determining what is happening in your local market for any specific property is to contact your local realtor," stated Walter.
Nationally, existing-home sales declined on the heels of a strong gain in September as uncertainty and economic concerns increased in October, according to the National Association of Realtors.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 3.1 percent to a seasonally adjusted annual rate of 4.98 million units in October from a downwardly revised pace of 5.14 million in September, and are 1.6 percent below the 5.06 million-unit level in October 2007.
Regionally, existing-home sales in the Midwest fell 6 percent in October to a pace of 1.10 million and remain 9.1 percent below October 2007.
The median price in the Midwest was $149,400, down 6.7 percent from a year ago.
Lawrence Yun, NAR chief economist, said consumer hesitation is understandable.
"Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions," he said. "We have favorable affordability conditions, but we need more than that to give buyers with jobs the confidence they need. This is why a housing stimulus is so critical now to encourage more buyers to draw down the inventory and stabilize home prices. Without home price stabilization, there will not be an economic recovery."
Even with the overall decline, Yun identified a number of areas with solid sales gains from a year ago, including many California and Florida markets, as seen previously, as well as Boston, Minneapolis and Denver.
The number of houses sold and closed in southwest Michigan in October decreased 22 percent from October 2007 (210 vs. 270).
The number of homes sold year-to-date was down 17 percent from last year.
The total dollar volume for the month was down 11 percent versus last year ($46,210,387 vs. $51,963,196).
Year-to-date total dollar amount was down 22 percent.
The average selling price bumped up 14 percent this October vs. last year ($220,046 vs. $192,456).
Year-to-date the average selling price was 6 percent below last year ($185,853 vs. $198,072).
The median price was 2 percent behind October 2007 ($124,950 vs. $127,750).
Year-to-date the median price is down 4 percent from last year ($120,500 vs. $125,609).
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 $183,300 in October, down 11.3 percent from a year ago when the median was $206,700.
There remains a significant downward distortion in the current price from a large number of distress sales at discounted prices; the median is where half of the homes sold for more and half sold for less.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the need for professional assistance is growing.
"Navigating the transaction process is easier said than done without professional assistance in today's market," McMillan said. "Proper valuation when many homes are being sold below replacement construction costs is very challenging – buyers remain in the driver's seat."
In southwest Michigan, the average mortgage rate increased slightly from 6.22 in September to 6.48 in October.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage increased from 6.04 percent in September to 6.20 percent in October. The rate was 6.38 percent in October 2007.
"Mortgage interest rates have been moving up and down in a historically low range, with the fixed rate down to 6.04 percent last week," Yun noted.
Nationally, the total housing inventory at the end of October slipped 0.9 percent to 4.23 million existing homes available for sale, which represents a 10.2-month supply at the current sales pace, up from a 10.0-month supply in September.
Regarding the local market, Walter reported, "Our homes-for-sale inventory in October increased just 0.8 percent from October 2007. We currently have a 16-month supply of homes for sale based on the past 12 months of sales. The inventory declined by 143 homes or 3.9 percent from September to October. Historically, our trend is for the number of homes available for sale to decrease from September through the end of the year."