Existing home sales should exceed 450,000 units. Could they break through 500,000 units? It is possible. It is not probable. We have had an inventory shortage for more than a year. The number of units sold during October have tried to break through the 450,00 level during the past three years. It is thought that we could see as high as 467,000 units sold during October. We hit peak sales during 2005 during the aftermath of hurricanes Katrina, Rita, and Wilma. The rolling year data and current year data is trending with level seen during 2002. Could we exceed 480,000 units? Yes. Will it be reported? That depends on the seasonal factors.
The Existing Home Average Sales Price could set another October record. Even if the ASP drops 2% from the September level the October sales price would exceed lat October's ASP. There is the possibility of the ASP approaching the $300,000 level. It is always tricky attempting to forecast a record sales price. The supply constraints may boost the ASP to new heights for the month of October.
We should here that inventory is at or near a historic low for October - possibly lower than 1999 through 2016. We should hear that the average sales price has ticked higher than where is was last month and last year. This should be received as good news.
It's the economy.
Good Real Estate Data should be Recorded - Will it be Reported?
Real estate sales drive other types of sales. Real estate sales drive hiring in multiple job sectors. The data for the New Home Construction for September, New Home Sales for September, and Existing Home Sales for September all showed strength. New home construction showed that the non-seasonally adjusted (NSA) starts data was the best for September since 2007. The Under Construction data was better than September 2002, as the economy was growing, and better than September 2008, as it was declining. The Completions data was the best since September 2008 and almost matched that level. The September New Home Sales data found that there was a record level set for the September Average Sales Price and the number of units sold were the highest since September 2007 and exceeded September 2008 levels. The Existing Home Sales data was "even better" with the average sales price setting a September record, units sold were comparable to 2015 and 2016 and comparable to 2002. New home sales have a long way to go to return to the peak units level of 2005. Existing Home Sales are within a few years of reaching the peak volumes of 2005 and 2006. What should we expect this month?
New Home Single Family Starts Starts should exceed 77,000 units. The data indicates that there could be no change or a large spike in the starts data on a month to month base. The starts number could soar to 88,000 units. The large variation could be impacted by the hurricanes that hit Texas and Florida this year. There was an uptick during 2001after Tropical Storm Allison hit Texas. There were also an uptick during 2005 after Hurricane Katrina. Will we break through 80,000 units? Will it be reported as a significant event?
The number of New Homes Under Construction should approach 1.2 million units. Last year there were 1.0614 million units under construction. Last month there we 1.167 million units under construction. The completions number will draw that number down while the starts number will boost it higher. It will certainly be higher than last October and may exceed 1.2 million units.
The Number of Single Family Homes Completed should exceed 100,000 units. Last October the number of completed units hit 96,700. This September that number was 99,300 units. Completions normally accelerate towards the end of the year as people attempt to move into school districts and builders try to clear inventory from their books. There is the potential to fall below last month's level and exceed last October's level. Could it hit 103,000, non-seasonally adjusted? Possibly. Will it be reported at that level? It depends on the seasonal factors.
The Data for each of these three Categories could Expand or Could Contract. This is just what the data indicate. The trend is for new construction to expand month to month and from October to October. Where the growth rates overlap is where we could expect to see the numbers fall. The overlap for starts is between 73,000 and 78,000 units. The overlap for under construction units is between 1.113 million and 1.167 million units. The overlap for completions should be between 103,500 and 106,300. The new construction industry is not back to pre-2008 recession levels. They are not back to pre-2001 recession levels. The Rolling year starts data was better than September 1991 and slower than September 1992. The same is true for the completions data. We need strong new construction data in order to receive strong new home sales data.
New Home Sales Should Exceed 50,000 units. Last month 52,000 units were sold. Normally we see a month to month increase in sales. Any growth would place the sales substantially higher than they were just a year ago. The annual rate of growth indicates that we we should see growth, as well. It is expected that the number of sales should exceed 50,000 units and may hit 53,000 to 56,000 units. It should be noted that we sold over 54,000 each October from 1995 through October 2007. We sold over 100,000 units during October of 2004 and 2005.
New Home Sales Prices should rebound from last year's level of $340,600. The record October average sales price (ASP) was set during October of 2015. There was a slight decline during October 2016 - possibly due to uncertainty regarding the November elections. While it is possible to see an annual decline in the average sales price, and while it is possible for the sales price to drop from September's level, even a slight decline for the September level would garner an increase from last year's $340,600. The expected range is between $350,000 and $375,000. Expect a value comparable to 2015 at $364,900.
New home sales create construction jobs, furniture sales jobs, and financial services jobs, including appraisers, Realtors, home inspectors, and loan officers. The trend is higher. The new home sales level is on track for 600-620,000 units this year. If 50,000 units are sold either is still a possibility,
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