ST. JOSEPH — Colder temperatures did not dampen the November housing market in Southwest Michigan.
Year-to-date, total dollar volume, and both the average and median selling prices in November set records in the year-over-year comparison dating back to 2006.
Despite this success, a streak that began in May came to an end last month. The number of houses sold in November, which was 277, ended the six months of continued monthly sales above 300 houses.
“Home sales in November were up 4 percent from November 2018,” said Alan Jeffries, association executive of Southwestern Michigan Association of Realtors. “Year-to-date sales were within 1 percent from 2018. The year-to-date sales in October 2017 still hold the record at 3,167 houses sold (in a month).”
The average selling price in November 2019 for houses sold in Southwest Michigan fell 8 percent to $232,817, from $253,290 in November 2018. Year-to-date, the average selling price set a new record, increasing 3 percent.
The November median selling price was $174,500, compared to $178,250 in November 2018.
The total dollar volume in November 2019 dropped 4 percent from November 2018. Year-to-date, the total dollar volume, setting a new record, rose 3 percent over November 2018 ($803 million compared to $776 million).
The inventory of houses for sale dropped 6 percent below that in November 2018. At 1,451 houses, the Southwest Michigan market had a 5-month supply of homes for sale, compared to 6.7 months in October.
In November 2010, the market had a 15.8-month supply, with 3,158 houses for sale.
Locally, the mortgage rate decreased slightly to 3.808 from 3.871 in October. Last year in November, the rate was 5.017. Nationally, the Freddie Mac mortgage rate in November decreased slightly to 3.68 from 3.78 for a 30-year conventional mortgage.
Across the country
According to the National Association of Realtors, existing home sales fell in November, taking a small step back after October’s gains. The Northeast and Midwest regions both reported growth last month, while the South and West saw declining sales.
Total existing-home sales decreased 1.7 percent from October to a seasonally-adjusted annual rate of 5.35 million in November. However, sales are up 2.7 percent from a year ago.
NAR’s chief economist Lawrence Yun said the decline in sales for November is not a cause for worry.
“Sales will be choppy when inventory levels are low, but the economy is otherwise performing very well with more than 2 million job gains in the past year,” Yun said.
The median existing-home price for all housing types in November was $271,300, up 5.4 percent from November 2018, as prices rose in all regions.
November’s price increase marks 93 straight months of year-over-year gains.
Regionally, existing-home sales increased at the strongest pace in the Midwest at 2.3 percent to an annual rate of 1.32 million. The median price in the Midwest was $209,700, a 5.9 percent jump from last November.
Nationally, the total housing inventory at the end of November totaled 1.64 million units, down about 7.3 percent from October and 5.7 percent from one year ago.
Unsold inventory sits at a 3.7-month supply at the current sales pace, down from 3.9 months in October and from the 4-month figure recorded in November 2018. Unsold inventory totals have declined for five consecutive months, constraining home sales.
“The new home construction seems to be coming to the market, but we are still not seeing the amount of construction needed to solve the housing shortage,” Yun said. “It is time for builders to be innovative and creative, possibly incorporating more factory-made modules to make houses affordable rather than building homes all on-site.”
Yun cited last week’s NAR Real Estate Forecast Summit, in which 14 leading housing and financial industry economists predicted that the U.S. will likely avoid a recession in 2020 while projecting the economy to grow 2 percent in the coming year.
“The consensus was that mortgage rates may rise, but only incrementally,” Yun said. “I expect to see home price affordability improvements, too. This year we witnessed housing costs grow faster than income, but the expectation is for prices to settle at a more reasonable level in the coming year.”