Nationally: Sales Struggle to Overcome Housing Shortages

Nationally: Sales Struggle to Overcome Housing Shortages
National Association of REALTORS®
article by Daily Real Estate News | May 24, 2018

Blame it on the low inventory of available property: Total existing-home sales failed to gain traction in April, according to the National Association of REALTORS® latest housing report, released Thursday.

Total existing-home sales—which are completed transactions that include single-family homes, townhomes, condos, and co-ops—decreased 2.5 percent to a seasonally adjusted annual rate of 5.46 million in April. Sales are now 1.4 percent below a year ago. This also marks the second consecutive month sales have fallen on an annual basis.

Regional Breakdown  The following is a breakdown of existing-home sales across the country in April:

  • Northeast: existing-home sales dropped 4.4 percent to an annual rate of 650,000, and are now 11 percent below a year ago. Median price: $257,200—2.8 percent higher than a year ago.
  • Midwest: existing-home sales were unchanged month-over-month at an annual rate of 1.29 million in April, and are 3 percent below a year ago. Median price: $202,100—up 4.6 percent from a year ago.
  • South: existing-home sales dropped 2.9 percent to an annual rate of 2.33 million in April, but are still 2.2 percent above a year ago. Median price: $227,600—up 3.9 percent from a year ago.
  • West: existing-home sales dropped 3.3 percent to an annual rate of 1.19 million in April and are 0.8 percent below a year ago. Median price: $382,100—up 6.2 percent from a year ago.

“The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home,” says Lawrence Yun, NAR’s chief economist. “REALTORS® say the healthy economy and job market are keeping buyers in the market for now even as they face rising mortgage rates. However, inventory shortages are even worse than in recent years, and home prices keep climbing above what many home shoppers are able to afford.”

For the inventory that is out there, homes are selling fast. Strong buyer demand mixed with low inventory levels are prompting homes to sell at a record pace.

Here’s a closer look at some of the key indicators from NAR’s latest housing report:

Home prices: The median existing-home price for all housing types in April was $257,900, up 5.3 percent from a year ago.

Inventories: Total housing inventory at the end of April rose 9.8 percent to 1.80 million existing homes available for sale. Inventories are still 6.3 percent lower than a year ago. Unsold inventory is at a four-month supply at the current sales pace.

Days on the market: Properties stayed on the market an average of 26 days in April, down from 29 days a year ago. Fifty-seven percent of homes sold in April were on the market for less than a month.

“What is available for sale is going under contract at a rapid price,” Yun says. “Since NAR began tracking this data in May 2011, the median days a listing was on the market was at an all-time low in April, and the share of homes sold in less than a month was at an all-time high.”

All-cash sales: All-cash transactions comprised 21 percent of sales in April, unchanged from a year ago. Individual investors account for the biggest bulk of cash sales. Investors purchased 15 percent of homes in April, also unchanged from a year ago.

Distressed sales: Foreclosures and short sales made up just 3.5 percent of sales in April, the lowest since NAR began tracking such data in October 2008. That is also down from 5 percent a year ago. Broken out, 3 percent of April sales were foreclosures and 0.5 percent were short sales.

April-EHS

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 052418

Nationally: Home Sales Overcome Inventory, Price Woes

Nationally: Home Sales Overcome Inventory, Price Woes
National Association of REALTORS®
article by Daily Real Estate News | April 23, 2018

House 1042Inventory shortages and pressing affordability issues didn’t suppress home sales activity in March. Total sales of existing homes, including single-family homes, townhomes, condos, and co-ops, increased 1.1 percent last month to a seasonally adjusted annual rate of 5.6 million, according to the National Association of REALTORS®. However, home sales are still 1.2 percent below a year ago.

“Robust gains last month in the Northeast and Midwest—a reversal from the weather-impacted declines seen in February—helped overall sales activity rise to its strongest pace since last November,” says Lawrence Yun, NAR’s chief economist. “The unwelcoming news is that while the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year-ago levels because supply is woefully low, and home prices keep climbing above what some would-be buyers can afford.”

Here’s a closer look at some key indicators from NAR’s latest existing-home sales report for March:

  • Home prices: The median price for existing homes of all types was $250,400, up 5.8 percent from a year ago. “Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets, especially those out West,” Yun says.
  • Inventories: Total housing inventory rose 5.7 percent to 1.67 million existing homes available for sale, but that’s still 7.2 percent lower than a year ago. Inventories have fallen year over year for 34 consecutive months. At the current sales pace, unsold inventory is at a 3.6-month supply.
  • All-cash sales: Cash transactions comprised 20 percent of sales, down from 23 percent a year ago. Individual investors tend to account for the bulk of all-cash sales. They purchased 15 percent of homes on the market last month, down from 18 percent a year ago.
  • Distressed sales: Foreclosures and short sales made up 4 percent of home sales. Broken out, 3 percent of sales were foreclosures and 1 percent were short sales.
  • Days on the market: Fifty percent of homes that sold in March were on the market for less than a month. Properties stayed on the market for an average of 30 days, down from 34 days a year ago.

“REALTORS® throughout the country are seeing the seasonal ramp-up in buyer demand this spring—but without the commensurate increase in new listings coming onto the market,” Yun says. “As a result, competition is swift, and homes are going under contract in roughly a month, which is four days faster than last year and a remarkable 17 days faster than March 2016.”

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 042318