NAR Report: Market Could Stabilize as More Homes are Listed

NAR Report: Market Could Stabilize as More Homes are Listed
National Association of REALTORS® | September 20, 2018

Existing-home sales remained mostly flat in August, bringing relief to markets following four consecutive months of decreases. Sales gains in the Northeast and Midwest helped to offset downturns in the South and West last month, according to the National Association of REALTORS®’ existing-home sales report, released Thursday.

Existing-home sales—which are completed transaction for single-family homes, townhomes, condos, and co-ops—remained at a seasonally adjusted annual rate of 5.34 million in August, the same as July. Sales are 1.5 percent below a year ago, NAR reports.

“Strong gains in the Northeast and a moderate uptick in the Midwest helped to balance out any losses in the South and West, halting months of downward momentum,” says Lawrence Yun, NAR’s chief economist. “With inventory stabilizing and modestly rising, buyers appear ready to step back into the market.”

Here’s a closer look at some of the findings:

  • Home prices: The median existing-home price for all housing types was $264,800—up 4.6 percent from a year ago.
  • Inventory: Total housing inventory at the end of August was at 1.92 million existing homes for sale, up from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace.
  • Days on the market: Properties stayed on the market an average of 29 days in August, down from 30 days a year ago. Fifty-two percent of homes sold in August were on the market for less than a month. “While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand,” Yun says. “Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory—especially moderately priced, entry-level homes—would propel sales.”
  • All-cash sales: All-cash sales comprised 20 percent of transactions in August, unchanged from a year ago. Investors tend to make up the biggest bulk of all-cash sales. They made up 13 percent of home sales in August, down from 15 percent a year ago.
  • Distressed sales: Foreclosures and short sales accounted for 3 percent of sales in August, the lowest reading since NAR began tracking such data in October 2008. Broken out, 2 percent of sales were foreclosures and 1 percent were short sales.

“We are probably seeing a reaction to the uncertainty around how sustainable recent price increase will be in the near future,” says Ruben Gonzalez, chief economist at Keller Williams. “Nationally, we expect sales to continue to track slightly below last year’s levels as inventory starts to move upward.”

Source: National Association of REALTORS®; REALTOR® Mag News, 092018

Yun: Spring Was the Season of ‘Unmet Expectations’

Yun: Spring Was the Season of ‘Unmet Expectations’
National Association of REALTORS® | June 27, 2018

1806_May_PHSFor the fifth consecutive month, pending home sales dropped in May—a sign that the recently ended spring buying season didn’t live up to the hype typical for real estate’s traditionally busiest time of year, the National Association of REALTORS® reported Wednesday. Contract signings also eased last month, and a significant sales decline in the South offset gains in other regions of the country.

NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 0.5 percent in May to a reading of 105.9. The index is down 2.2 percent on an annual basis. NAR Chief Economist Lawrence Yun says this year’s spring buying season will be remembered as one of “unmet expectations,” with pending home sales at the second lowest level in the past year. He says inventory shortage is the main culprit. “REALTORS® in most of the country continue to describe their markets as highly competitive and fast-moving, but without enough new and existing inventory for sale, activity has essentially stalled,” Yun says.

However, buyer demand hasn’t slowed, which is evident in quicker sales and strong price growth, Yun says. The troubling reality is that gains in home prices continue to outpace income growth, housing inventory has fallen for 36 consecutive months, and listings typically go under contract in just over three weeks.

“With the cost of buying a home getting more expensive, it’s clear the summer months will be a true test for the housing market,” Yun says. “Several would-be buyers this spring were kept out of the market because of supply and affordability constraints. The healthy economy and job market should keep many of them actively looking to buy, and any rise in inventory would certainly help them find a home.”

Source: National Association of REALTORS®; REALTOR® Magazine Online 062718