By Staff
ST. JOSEPH – "March home sales were up almost 5% over February. In our market this was disappointing because normally we experience increases of 50% to 70% in the houses sold in March than in February. This slower than normal start to the year resulted in our first quarter sales being 21% behind our sales for this time last year," stated Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS, Inc. "There is not one obvious answer for March sales staying at the January and February level. The late arrival of spring and gloomy national media reports may have kept buyers on the sideline waiting to see what spring is bringing."
Nationally, existing-home sales edged down in March, remaining within a narrow range of sales activity that has persisted since last September, according to the National Association of Realtors(r).
Existing-home sales – including single-family, townhomes, condominiums and co-ops – were down 2.0 percent to a seasonally adjusted annual rate of 4.93 million units in March from a level of 5.03 million in February, and remain 19.3 percent below the 6.11 million-unit pace in March 2007. A rise in condo sales in March was offset by a drop in single-family sales. Regionally, sales rose in the Northeast and West but fell in the Midwest and South.
Lawrence Yun, NAR chief economist, said the market is performing unevenly. "Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets," he said. "At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines."
In southwest Michigan, the total dollar volume in March fell 38% ($30,764,995 vs. $49,653,702) and year-to-date dropped 25.4% when compared to last year. The average selling price dipped 4% ($175,800 vs. $183,224). The median price went down 13% ($115,900 vs. $133,268). The median price is the price at which 50% of the homes sold were above that price and 50% were below.
The national median existing-home price for all housing types was $200,700 in March, down 7.7 percent from a year ago when the median was $217,400. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively higher sales activity in low-cost markets.
Existing-home sales in the Midwest dropped 6.5 percent to an annual rate of 1.16 million in March, and are 15.9 percent below a year ago. The median price in the Midwest was $152,600, down 5.3 percent from March 2007.
In southwestern Michigan, the average mortgage rate in March was 6.06 up compared to 6.12 in February. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.97 percent in March from 5.92 percent in February; the rate was 6.16 percent in March 2007.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said there are problems with the implementation of mortgage guidelines. "It appears there is some over-reaction on the part of some lenders now in requiring higher down payment percentages than may be necessary," he said. "On the other hand, buyers in many parts of the country are able to take advantage of more lenient policies for FHA loans. However, because lenders don't have enough underwriting experience with FHA loans in high-cost areas, there are localized bottlenecks in loan processing. Consumers should consult with a Realtor(r) in their area to learn about the kind of financing that may be available to meet their needs."
Yun offered a caution. "With elevated inflation, the Federal Reserve should be extra careful about further rate cuts," he said. "Mortgage interest rates, which do not move directly with Fed funds rates, may rise measurably and hurt the housing recovery if inflation gets out of hand. Monetary stimulus is plentiful – what is needed more at this point is a home buyer tax credit to get buyers off the sidelines and prevent the market from overshooting on the downside."
Nationally, the total housing inventory rose 1.0 percent at the end of March percent to 4.06 million existing homes available for sale, which represents a 9.9-month supply at the current sales pace, up from a 9.6-month supply in February.
Locally, the housing inventory decreased 2.67% from 3032 houses for sale in March 2007 to 2950 house for sale in March 2008. This is a 12-month supply for the southwestern Michigan market.
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(r), "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.