ST. JOSEPH — The Southwest Michigan housing market continued its historic pace in November.
The number of houses sold, selling prices and total dollar volume surpassed November 2019 numbers and set new records for November, dating back to 2006 – a period traditionally thought of as the housing market’s peak year.
Alan Jeffries, association executive of the Southwestern Michigan Association of Realtors, said this isn’t a surprise, as the four months before this November also set record numbers in monthly comparisons to prior years.
“The downside to this market boom is the inventory of houses for sale dropped to an all-time low at the end of November, to 930 houses,” Jeffries said. “This was a 36 percent drop from November 2019. At this level of inventory, there was just 3.7-month supply for potential homebuyers. For comparison, in November 2010, there were 3,160 houses for sale.”
The number of houses sold in November, at 359, represented the first time since November the number dropped below 455 in a month.
Compared to November 2019, sales were up 30 percent. Year-to-date, the number of houses sold grew to 3,557, from 3,353 in November 2019 – for a 6 percent increase.
The average selling price at $344,901 this November is a 48 percent increase compared to the $232,817 average selling price last November.
The median selling price jumped to $220,000 from $174,500 in November 2019, for a 26 percent increase. Year-to-date, the median selling price rose 20 percent.
The 30 percent increase in sales at 48 percent higher selling prices pushed the total dollar volume up 92 percent in November for Southwest Michigan, compared to November 2019 – $123.8 million versus $64.4 million in total dollar volume.
The year-to-date total dollar volume increased 34 percent.
Locally, the mortgage rate was at 2.96, down slightly from 3.02 in October. Last year in November, the rate was 3.80. Nationally, the Freddie Mac mortgage rate in November was 2.72, down from 2.81 in October for a 30-year conventional mortgage.
Across the country
According to the National Association of Realtors, existing-home sales fell in November – snapping a five-month streak of month-over-month gains.
All major regions either took a step back or held steady in terms of their respective month-over-month status. However, each of the four areas experienced significant year-over-year growth.
Total existing-home sales decreased 2.5 percent from October to a seasonally-adjusted annual rate of 6.69 million in November. However, sales in total rose year-over-year, up 25.8 percent from a year ago.
“Home sales in November took a marginal step back, but sales for all of 2020 are already on pace to surpass last year’s levels,” said NAR’s chief economist Lawrence Yun. “Given the COVID-19 pandemic, it’s amazing that the housing sector is outperforming expectations.”
Yun said job recoveries have stalled in the past few months, and fast-rising coronavirus cases along with stricter lockdowns have weakened consumer confidence.
“Circumstances are far from being back to the pre-pandemic normal,” he said. “However, the latest stimulus package and with the vaccine distribution underway, and a very strong demand for homeownership still prevalent, robust growth is forthcoming for 2021.”
The median existing-home price for all housing types in November was $310,800, up 14.6 percent from November 2019. November’s national price increase marks 105 straight months of year-over-year gains.
Nationally, the total housing inventory at the end of November totaled 1.28 million units, down 9.9 percent from October and down 22 percent from one year ago.
Unsold inventory sits at an all-time low 2.3-month supply at the current sales pace, down from the 3.7-month figure recorded in November 2019.
“The positive momentum that home sellers are seeing will carry on well into the new year,” Yun said, citing low mortgage rates and remote-work realities. “Housing affordability, which had greatly benefited from falling mortgage rates, is now being challenged due to record-high home prices. That could place strain on some potential consumers, particularly first-time buyers.”