Existing-Homes Sales Increased in February

Article courtesy of

Southwestern Michigan Association of Realtors

ST. JOSEPH, MI – The number of homes sold in February in Southwest Michigan increased 12.8% over January sales. “It is always good to see numbers increase in February,” commented Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS, Inc. “Our sales are predictably down in the first two months of the year. For the last five years, which have been the best sales years in MLS history, January and February have been the lowest months of the year for home sales. It is still too early in the year to determine what type of market year we are going to have. March is typically the month when sales begin to pick up. However, with the winter weather lingering as it has, we may have to wait to see how the market will shape up for 2008.”

Nationally existing home sales rose 2.9% in February. Lawrence Yun, NAR chief economist, said the gain is encouraging. “We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” he said. “Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year.”

Looking back at last year, the number of homes sold and closed in February was down 5% from 2007 locally and 23.8% nationally according to the National Association of Realtors®. In SWMI, the total dollar volume in February increased 3% and year-to-date is down 15% over last year. The average selling price jumped up 8.7% ($181,292 vs. $166,802). The median price went down by same amount 8.7% ($105,000 vs. $115,000). 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 $195,900 in February, down 8.2 percent from a year earlier when the median was $213,500. 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 fewer sales in higher priced markets.

Existing-home sales in the Midwest rose 2.5 percent in February to a level of 1.24 million but are 19.5 percent below a year ago. The median price in the Midwest was $143,900, which is 7.1 percent lower than February 2007.

Home prices within metropolitan areas are more telling. The most recent data shows roughly half of the metro areas in the U.S. with price increases, with healthy gains in markets such as Oklahoma City and Trenton, N.J. “In other areas such as Sacramento, a rapid price decline has induced buyers to come into the market and sales are now rising,” Yun said. “The relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers.”

In SWMI, the average mortgage rate in February was 6.12 up from 5.87 in January. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.92 percent in February from 5.76 percent in January; the rate was 6.29 percent in February 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that negotiation and knowledge are even more important in the current market. “Consumers need to be aware of local market conditions and comparable sales prices to have a clear picture of a home’s value,” he said. “Realtors® understanding of local markets, negotiating expertise, and transaction experience are invaluable to both buyers and sellers, today as much as ever.”

“Our local homes-for-sale inventory is 4% higher than in February 2007 and it is still at the one-year level. We are still in a buyer’s market. Sellers need to be competitive in their niche. Buyers now have some of the best selection of homes to chose from and the ability to lock into some of the best fixed rates that are holding steady,” stated Gary Walter.

Total housing inventory nationally fell 3.0 percent at the end of February to 4.03 million existing homes available for sale, which represents a 9.6-month supply (3) at the current sales pace, down from a 10.2-month supply in January.

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®, “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.