Reclaiming Common Sense

The Existing Home Sales were Slower during 2018 than 2017

Has it been slower during 2019 due to a Shutdown of Loan Approvals?

The Government Shutdown curtailed the release of the new home sales data and the new home construction data. It also appears to have slowed the loan approval process during December of 2018 and January 2019 for both existing home sales and new home sales. This column produced a February Real Estate Forecast article that projected month to month improvement in the existing home inventory level, a potential record  February Average Sales Price, and a surge in the units sold from last year's 319,000 units sold, non-seasonally adjusted. What was recorded and what was reported by the REALTORS?

Existing Home Inventory continues to grow year over year. There were 1.440 million single family homes for sale and 192,000 condominiums for sale for a total of 1.632 million units for sale. This is up from last year's 1.580 million units during February 2018. Inventory is king. We are still lower than we were during December of 2016. We were oversupplied during the recession. Inventory started recovering  December 2015.

The Number of Units Sold came in within expectations.  It was projected that we would see 312,000 to 319,000 units sold this February based on the normal growth seen between January and February and Between February and February. The 312,000 units was on the low end of expectations.

The "annualized" sales show the same sales pattern. Last year the annualized rate for the West Region wales 1.110 million units compared to 1.03 million units this year. This is a drop of 80,000 single family homes. A similar drop was seen in the annualized rate of sales for condominiums in the West region. There was a drop from 150,000 units to 130,000 units.

The West Region is pulling down the sales level. Last February there were 63,000 units for sold in the West. This year only 58,000 units were sold. The Northeast, Midwest,  and South had the same level of sales as last February. They were identical. The Northeast region saw a boost from 570,000 annualized sales to 580,000 annualized sales. The monthly sales were identical to the February levels recorded last year in the other three regions.

The Average Sales Price set a new record. The overall average sales price came in at $288,200, up from last year's February record of $280,600. Both the average sales price for condominiums and single family homes rose from February 2018 to February 2019.

Current Year Sold are better than February 1999-2001 and better than February 2008-2015.  Two data points do not create a trend. The 597,000 units sold are slightly lower than what were sold during 2016, 2017. and 2018 when we had 617,000 units, 634,000 units, and 632,000 units sold, respectively. Right now the data is too tightly packed to detect a trend.

The Rolling Year Sales came in at 5.307 Million units. This level of sales during the past 12 months is better than where we were during 2016.  We are doing better than 2001 and are almost at 2002 levels.  There are people who pine for the good old days of 2004-2006. This is when the market "overheated."  We might be able to peg 5.5 million units by the end of the year.

This data came within expectations. The average sales price set a record for February. The units sold during the month cam in within expectations, even if it was on the low side of expectations. Inventory for sale grew. This and the current year data indicate that things are okay. The government shutdown may have slowed the start of this 12 lap race.

It's the Economy.