Declining Sales, Record Price
“Consumers are facing much higher home prices, rising mortgage rates, and falling affordability, however, buyers are still actively in the market,” said Lawrence Yun, NAR’s chief economist in a Housing Report.
Report Highlights
- The median existing-home sales price in March rose by a record-breaking annual pace of 17.2% to a historic high of $329,100, with all regions posting double-digit price gains. The median existing-single-family home sales price jumped 18.4% to $334,500, both historic highs.
- Existing-home sales fell 3.7% from the prior month to a seasonally-adjusted annual rate of 6.01 million as sales in all major regions declined. From one year ago when home sales first started to fall due to the pandemic, sales are higher by 12.3%.
- As of the end of March, housing inventory slightly rose to 1.07 million units, down by 28.2% year-over-year. Properties typically sold in 18 days, a record low.
Consensus vs. Results
Actual sales in March were 6.010 translating into a month-over-month decline of 3.7%.
That’s on the heels of a 6.6% decline (revised to a 6.3% decline) in February.
The Econoday consensus this month was 6.205 million sales again missing the mark significantly.
Ahead of the report, Econoday commented “Existing home sales missed expectations significantly in February at a 6.220 million annual rate. And March’s expectations aren’t calling for any rebound at a consensus 6.205 million.”
Year-Over-Year Sales
Year-Over-Year sales are up 12.3% but that is vs an easy comparison.
The year-over year comparisons will be ridiculously easy beats for the next three months.
YOY Comparisons Coming Up
- April: 4.37 Million
- May: 4.010 Million
- June: 4.770 Million
- July: 5.900 Million
- August: 5.970 Million
- September: 6.440 Million
In May, look for something on the order of existing sales are up 50% from a year ago.
Then in September, start looking for year-over-year declines.
Mish
So many angles here.
As soon as they start making pay rent and pay for their mortgages we’ll see a nice down turn. Foreclosures will follow. With inflation starting one day the free money will stop. Locked and loaded ready to go. Until then enjoy the ride.
I just drove by One World Theater, which is very close to my house. Joe Rogan and a bunch of other guys I didn’t recognize were standing in the parking lot looking the place over. I heard a rumor he was going to buy it and turn it into a comedy club…..maybe it’s true.
My daughter once played there, opening for Carmen Bradford. It’s a great small venue. I wonder if they’ll make it bigger. Probably so.
Well, at least people enjoying the foreclosure moratorium have an easy out.
We looked at the sales records for my wife’s mother’s neighborhood. Most of the houses there are owned by corporations and are being rented out. Buyers are being so aggressive that the called my wife asking if she owned the house and could sell it. Half the people I know have a second houses that they renting out. Everybody with means seems to realize that they need to diversify there income sources with real estate. This will have the effect of turning more of the middle class in to income sources for the upper class. After the current covid crisis has waned, I wonder if the current rental rates will be sustainable. I would think housing valuations will not be able to sustain current levels in 2 to 3 years. My son who is moving back to Colorado after leaving the marines is having trouble finding a house. My other younger son who is working for Tesla is looking to buying a house so he can rent out the rooms. Our family seems to be on both sides of this issue.
Reuters and others say a shortage of available properties but I find when prices go up people list for sale
(Reuters) – U.S. home sales fell to a seven-month low in March, pulled down by an acute shortage of properties, which is boosting prices and making owning a house more expensive for some first-time buyers.
I saw today that Zillow is putting a new value of 325K on one of my rentals….that I bought for 172K….in 2015. I could probably sell it for 350k right now….the market is still melting up here in a big way. I don’t expect to see it decline in any meaningful way until the fall, when presumably demand will fall off a little, at least.
These numbers are Seasonally adjusted and annualized
Fred only has data for 1 year so I cannot create my own charts
Are the numbers seasonally adjusted? Should they be? I flipped to calculated risk and read the following:
This was the highest sales rate for March since 2006, and the 4th highest sales rate for March on record (behind 2004, 2005, and 2006).
Missing expectations usually means a weak market…but in this case it implies that there is nothing for sale and buyers are having great difficulty buying one.
In my case, I am looking to buy 3 rental homes this year and have the cash on hand to complete the deals, but there is nothing for sale. In a town where there are normally over 150 homes for sale there are just 25 as of today, and those 25 are basically at the extreme high and low end of the scale.
It’s crazy out there.
People like you drive up.home costs for single family homes that are meant for guess what single families.
I wouldn’t be surprised if existing homes stayed flat for a while. In 2008, the Fed had the ability to lower rates (not getting into if it was good policy or not). Today they do not. The Fed is already at the lower bound. Either salaries will have to catchup, or it might take longer to offload homes in my opinion