Traverse City area Home Sales Surge in May

TRAVERSE CITY — Housing sales continued a spring-time surge in May across the 5-county region.

Existing home sales totaled 236 last month in Grand Traverse, Leelanau, Benzie, Antrim and Kalkaska counties, according to data from the Traverse Area Association of Realtors. That's a 14.5 percent increase from April, and is up 41 percent from May sales in 2011.

Year-to-date sales through May totaled 866 homes, the highest in at least seven years.

Local sales trends bettered national sales figures released Thursday by the National Association of Realtors. Total existing-home in the U.S. declined 1.5 percent to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April, but are 9.6 percent above the 4.15 million-unit pace in May 2011.

"I think (the housing market's) done real well," said Kathy Neveu, an agent at the Real Estate One office in Beulah. "The big push that's helping us right now is the low interest rates."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage declined to a record low 3.80 percent in May from 3.91 percent in April; the rate was 4.64 percent in May 2011.

The median home sale price for May totaled $145,750 in the Grand Traverse region. That's about level with April figures, but is up 6 percent from May 2011. Across the Midwest, existing-home sales rose 1 percent in May to a pace of 1.04 million and are 19.5 percent above a year ago. The median price in the Midwest was $147,700, up 6.4 percent from May 2011.

Neveu said her office is seeing strong interest for homes in the $150,000 to $200,000 price range, with a steady secondary market from $250,000 to $400,000. Homes with larger lots and available acreage are a hot commodity in and around Benzie County right now, she said.

(Buyers) want a little more privacy, a little more acreage. We're actually seeing a shortage of that right now," Neveu said. "I've been having a hard time finding product for some of my buyers."

Lawrence Yun, NAR chief economist, said inventory shortages in some parts of the country have been building all year.

"The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand. The normal seasonal upturn in inventory did not occur this spring," he said. "Even with the monthly decline, home sales have moved markedly higher with 11 consecutive months of gains over the same month a year earlier."

There are broad-based shortages of inventory in the lower price ranges in much of the country except the Northeast, and in the West supply is extremely tight in all price ranges except for the upper end.

Distressed homes - foreclosures and short sales sold at deep discounts - accounted for 25 percent of May sales in the U.S. Fifteen percent were foreclosures and 10 percent were short sales. That's down from 28 percent in April and 31 percent in May 2011.

First-time buyers accounted for 34 percent of purchasers in May, compared with 35 percent in April and 36 percent in May 2011.

Wire services contributed to this report.