By Staff
ST. JOSEPH – "After a slow start for the first quarter of the year in Southwest Michigan, April sales finally spiked. Compared to March, the number of homes sold and closed increased 24 percent. And the total dollar volume soared up 30 percent. While this was good news, we still have to wait and see what will happen now that we are going into the prime selling season. I think our area is in a fairly good market position overall. After a peak year in 2006, we are continuing to move to a more sustainable market. The tightening of the lending criteria by financial institutions has knocked some buyers out of the market and thus slowing sales. However, while this seems like a negative, it will assist in providing a more stable housing market in the future," stated Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS, Inc.
Nationally, existing-home sales slowed down in April partly because restrictive lending practices hampered homebuyers. At the same time, a greater number of areas are showing sales gains from a year ago and a recent reversal in mortgage policy means the market is better positioned for a turnaround, according to the National Association of Realtors(r).
Existing-home sales nationally – including single-family, townhomes, condominiums and co-ops – declined 1.0 percent to a seasonally adjusted annual rate of 4.89 million units in April from an upwardly revised pace of 4.94 million in March, and were 17.5 percent below the 5.93 million-unit pace in April 2007.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the good news is that mortgage restrictions have just been eased. "In the past week, Freddie Mac and Fannie Mae announced that they were eliminating their 'declining market' policies, effective June 1," he said. "This means consumers across the country will have access to safe, affordable financing with down payments of only 5 percent on most mortgages, with 100 percent financing available on some loan products, and we could see an upturn in home sales this summer."
Lawrence Yun, NAR chief economist, said eliminating restrictive policies should be a big help to homebuyers. "I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant," he said. "Also, a recent notable drop in interest rates on conforming jumbo loans will help consumers in high-cost markets like California and New York."
The unusual mix of market conditions around the country continues, but areas showing healthy price gains include Greenville, S.C., and Springfield, Mo., both with solid local economies. "On the other hand, some markets like San Diego, Calif., and Fort Myers, Fla., are experiencing rising sales after sudden double-digit drops in local home prices, so lower prices and low interest rates are starting to generate results," Yun said.
In SWMI, number of houses sold and closed in April was down 5.7 percent from April 2007 (217 vs. 230). Due to the unusual slow start to the year, the number of homes sold to date is down 17 percent from last year. The total dollar volume for the month was down 8.7 percent vs. last year ($39,913,258 vs. $43,709,192). Year-to-date total dollar amount is down 20.7%. The average selling price slipped 3 percent ($183,932 vs. $190,040). The median price dropped 6.6 percent ($120,000 vs. $128,450). 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 $202,300 in April, which is 8.0 percent below a year ago when the median was $219,900. Because the slowdown in sales from a year ago is greatest in high-cost areas, there is a downward distortion to the national median with relatively more sales in low- and moderate-priced markets.