Dwindling Inventory Slows Home Buying in Southwest Michigan | News

ST. JOSEPH – The number of Southwest Michigan homes sold in December fell from a year earlier.

A report from the Southwest Michigan Association of Realtors found that the December housing market felt pressure from low home inventory.

“For the first half of the year, home sales were higher every month than in 2020. Then in July, declining inventory took over, and for the second half, sales every month fell below those of 2020,” said Alan Jeffries, association director for the Southwestern Michigan Association of Realtors.

Jeffries predicted another strong year for the area’s housing market, where low inventory and low interest rates will keep home prices high.

Just under 300 homes were sold in December 2021, compared to 367 homes sold in December the previous year, the highest year-over-year since 2006.

Since the start of the year, the number of homes sold in 2021 has evolved in the same way as in 2020 – 3,889 against 3,924.

Over the past nine years, more than 3,000 have been sold in Southwest Michigan.

The price of the average home sold in December 2021 ($377,156) is up 18% from a year earlier ($318,807).

Home prices in December were also the most expensive in 2021. The average year-to-date selling price of $325,972 was up 7% from 2020 and set a new record in the comparison of one year to the next.

The average sale price in southwest Michigan has increased 63% since 2015.

Median selling prices also exploded in December. In December 2021, it was $245,000, surpassing the December 2020 median sale price of $205,500 by 19%.

The median selling price of $245,000 also set a new record in the year-over-year comparison. The December median sale price also set the record for 2021.

The median year-to-date selling price of $226,100 was a 5% increase from $215,000 in 2021 and set a new record in the year-over-year comparison.

Against the backdrop of all this, there is a decreasing number of homes for sale.

Only 514 houses were for sale at the end of 2021, compared to 717 in 2020.

The market ended 2021 with just two months of supply of homes for sale, down from 2.7 in November and 2.8 in December 2020. The two-month supply inventory level is the lowest on record in year-to-year comparison.

In 2010, there were 3,160 homes on the market representing a 15.8 month supply.

National trends

In December, Freddie Mac’s mortgage rate was 3.11, compared to 3.1 in November for a conventional 30-year mortgage.

Existing home sales fell in December, ending a three-month streak of gains. Despite the decline, overall sales for 2021 increased by 8.5%.

“December saw sales pull back, but the pullback was more a sign of supply constraints than an indication of weakening housing demand,” said Lawrence Yun, chief economist at NAR. “Sales for the full year ended strong, reaching the highest annual level since 2006.”

The median existing home price for all housing types in December was $358,000, up 15.8% from December 2020 ($309,200) as prices rose in every region. The South experienced the highest rate of appreciation. That represents 118 straight months of year-over-year increases, the longest streak on record.

Sales of existing homes in the Midwest fell 1.3% to an annual rate of 1.5 million in December, down 2.6% from a year ago. The median price in the Midwest was $256,900, up 10% from December 2020.

First-time buyers accounted for 30% of sales in December, compared to 26% in November and 31% in December 2020. buyers was 34 percent.

Total housing inventory at the end of December stood at 910,000 units, down 18% from November and 14.2% from a year ago (1.06 million). Unsold inventory is at 1.8 months supply at the current rate of sale, down from 2.1 months in November and 1.9 months in December 2020.

“We saw stocks hit an all-time low in December,” Yun said. “Homebuilders have already made progress in 2022 to increase supply, but it will take years to correct discrepancies like the ones we’ve seen recently.”