Home Prices Drop the Most in Eleven Years, New Listings Plunge

Redfin reports Homes in Austin and Boise are Selling for $80,000 Less Than a Year Ago

Those are two local areas gone bust. They are not representative of national trends. Here are some national details.

National Trends

• Median Price: The median U.S. home sale price fell 4.1% ($17,603) year over year in April to $408,031. That’s the biggest drop on record in dollar terms and the largest decline since January 2012 in percentage terms.
• Listings: New listings dropped 26.1% year over year on a seasonally adjusted basis in April. That’s the largest decline on record aside from April 2020, when the onset of the pandemic brought the housing market to a halt. New listings were also at the lowest level on record aside from April 2020.
• Pending Sales: Pending home sales fell 21% year over year on a seasonally adjusted basis in April, an improvement from the record 36.1% decline in the fall. Pending sales rose 3.1% from March, the first month-over-month increase since December and the largest increase since September 2021.
• Competition: One-third (33.6%) of homes that sold in April were purchased for more than the final list price. That’s down from 58.7% a year earlier but is higher than any April on record prior to the pandemic.

Redfin New Listings 

Redfin Pending Home Sales 

Regional Differences

• Listings: New listings were down in every major U.S. metro area Redfin analyzed in April, but Texas is home to six of the 10 metros with the smallest declines. In El Paso, new listings fell 0.2%, the smallest decline in the U.S. It was followed by McAllen (-1.5%), Nashville (-7.4%), North Port (-13.5%), Fort Worth (-16%), San Antonio (-17.4%), Austin (-17.4%), Memphis (-18.2%), Dallas (-18.8%) and Pittsburgh (-19%). 
• Sales: In Boise, pending sales fell 70.8% year over year, more than any other metro Redfin analyzed. It was followed by Baton Rouge, LA (-61.7%), Greensboro, NC (-56.2%). Allentown, PA (-54.7%) and Honolulu (-53.9%). The smallest declines were in Fort Worth (-0.8%), Dallas (-1.9%), North Port (-5.2%), Atlanta (-7.4%) and Detroit (-8.7%).
• Prices: Median sale prices fell from a year earlier in 45 of the metros Redfin analyzed. The biggest declines were in Oakland (-16.1%), Austin (-15.3%), Boise (-15.1%), San Francisco (-13.4%) and Salt Lake City (-10.9%). The biggest increases were in Fort Lauderdale, FL (10.7%), Allentown (8.9%), Milwaukee (8.9%), Cincinnati (8%) and St. Louis (7.8%).

Median Price Not the Best Metric 

Median price is not the best metric but it is timely.

High-end buyers are not price conscious. And would be sellers who cannot get their price pull listings. 

Case-Shiller Data 

Repeat sales of the same home over time such as provided by Case-Shiller is a more accurate measure.

However, Case-Shiller data is extremely lagging. It is four or more months in the hole. The most recent data is for February and that reflects sales in December and January. 

For discussion, please see my April 26 report Case-Shiller Home Prices Unexpectedly Rise Adding Interest Rate Pressure on the Fed

Transaction Crash Will Continue

Myopic cheerleaders keep commenting there will not be a housing crash, a ridiculous notion because a crash is clearly underway.  

However, the crash so far is in transaction volume only, not price.

Both matter, but more so the latter. 

Home sales mean appliance sales, new furniture, cabinets, new carpet, landscaping, etc. Who doesn’t spend a lot more money when they move into a new home?

30-Year Mortgage Rates Approaching 7 Percent Again, Housing Will Suffer

For discussion of the fundamental and technical picture, please see 30-Year Mortgage Rates Approaching 7 Percent Again, Housing Will Suffer

The above article is from May 20, 2023. 

A quick check now shows the current average mortgage rate is 6.95 percent. That all but guarantees the transaction crash will continue.

This buyer-seller standoff will weigh on the economy as long as it continues.

This post originated on MishTalk.Com.

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