June existing-homes sales up in southwest Michigan
Published 1:12 pm Monday, July 27, 2009
ST. JOSEPH – “June left us with a positive monthly increases in existing home sales for the first half of the year. June was up 13 percent over May and May was up 13 percent over April for homes sold and closed.
“Our month-to-month increase in total dollar volume was up 17 percent, indicating that the sales prices are starting to show some tentative signs of improvement. We are in the full swing of our peak-selling season and hopefully this trend will hold for the next several months,” stated Gary Walter, EVP, of the Southwestern Michigan Association of Realtors Inc.
Walter continued, “The good news for buyers is that prices still remain lower than last year and sellers continue to be competitive with their pricing. In fact, compared to a year ago, the average price is down 21 percent and the median is down 17 percent. The average selling price in June nudged up roughly $5,000 over that in May. However, the median selling price dipped about $6,000. Now potential buyers who are still on the fence must realize that the $8,000 tax credit deadline is not that far off. You must close the sales transaction before Dec. 1. However, the process of finding a house and closing can take up to 60 days or more.”
In year-to-year comparisons we are still behind June 2008. The number of houses sold and closed in southwest Michigan in June was 8 percent behind June 2008 (251 vs. 272).
Year-to-date the number of houses sold was down 13 percent. The total dollar volume for the month was down 27 percent ($41,956,121 vs. $57,428,805).
For the first six months of the year the total dollar volume was down 34 percent from last year.
The average price declined 21 percent from last year ($167,156 vs. $211,135) and the median price declined 18 percent (109,950 vs. 133,250). The median price is the price at which 50 percent of the homes sold were above that price and 50 percent were below.
Nationally, existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the National Association of Realtors.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3.6 percent to a seasonally adjusted annual rate of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent lower than the 4.90 million-unit level in June 2008.
The national median existing-home price for all housing types was $181,800 in June, which is 15.4 percent below June 2008. Distressed properties, which accounted for 31 percent of sales in June, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.
Regionally, existing-home sales in the Midwest increased 0.9 percent in June to a level of 1.10 million but are 1.8 percent lower than June 2008.
The median price in the Midwest was $157,000, 9.1 percent below a year ago.
Lawrence Yun, NAR chief economist, is hopeful about the gain.
“The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions. Despite the rise in closed transactions, many realtors are reporting lost sales as a result of new appraisal standards that went into effect May 1 of this year.”
A June survey of NAR members shows 37 percent experienced at least one lost sale as a result of the new Home Valuation Code of Conduct, with seven out of 10 reporting an increased use of out-of-area appraisers.
Seventy percent of NAR appraiser members said consumers were paying higher fees, while 85 percent report a perceived reduction in appraisal quality.
“Clearly the process needs to be revised, but the most logical approach is to use appraisers with local expertise, industry designations and access to local data, who make a physical examination of the property and use apples-to-apples comparisons with nearby home sales,” Yun said. “In many cases, normal homes are being compared with distressed homes sold at a discount, which often are in subpar condition. This is causing real harm to both buyers and sellers.”
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are very good opportunities. “Despite some of the challenges, the housing market continues to demonstrate signs of recovery,” he said. “The temporary first-time buyer tax credit is clearly helping people make a decision and is contributing to the overall stimulus impact, but since it’s taking longer to close transactions, many would-be beneficiaries may not be able to take advantage of the credit before the Dec. 1 expiration date. As a consequence, consumers need the expertise of realtors more than ever to navigate both the obstacles and opportunities in today’s market.”
In southwest Michigan, the average mortgage rate rose to 5.81 from 5.26 in May. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.42 percent in June from 4.86 percent in May; the rate was 6.32 percent in June 2008. Mortgage interest rates have trended lower in recent weeks.
Nationally, the total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, down from a 9.8-month supply in May.
Raw inventory totals are 14.9 percent below a year ago.
Walter reported on the local market, “Our homes-for-sale inventory in June decreased a little over 2 percent from June 2008. At the end of June there were 3,599 listings, which is a 19-month supply of homes for sale based on the last 12 months of sales.”
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 through their Web site, www.swmar.com.
The National Association of Realtors, “The Voice for Real Estate,”is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.