The real estate market is in a symbiotic relationship with the rest of the economy. If the real estate market is strong then retail sales tend to be stronger, service jobs increase, sales improve, and then the housing market improves. The "Great Recession" was actually three recessions in one: A Real Estate recession, a Jobs Recession, and a Retail Recession. Retail sales have been strengthening since the recession, with 2017 being the best year ever and January 2018 being the best January retail month ever. Last month the December Existing Homes sales data recorded . The end of the year sales were higher than 2007 through 2016. The problem is that he end of the year inventory was lower than 1999 through 2016. Worded a different way, we ended the year with a housing inventory shortage. This shortage is causing prices to rise as demand increases.
Last week this column produced a January real estate forecast article. It was thought that we could see units sold break through the 325,000 units level and yet that it may be a struggle to break through 315,000 units due to a lack of inventory. It was thought that they inventory level should improve from December's record low level. It was also proposed that there may be one more month of declining inventory because January tends to be the month with lowest inventory for the entire year. It was also projected that we could see another record average sales price for the month of January, even if there was a decline in the average sales price from December to January.
January Inventory Lowest Since 1999 - Better than Last Month. Last month we had fewer than 1.5 million units available for the first time since January 1999. It was the lowest monthly inventory level "ever." This month that value bounced up to 1.520 million units. This is still the lowest "ever" January level of inventory. We have seen declining peaks of inventory since the Summer of 2014. This means that if you are looking to purchase a home this Summer that there may be fewer homes available from which to select.
The Headline Units Sold was down from January 2017 - Still Better than January 2008 through 2016. The question is whether or not the glass is half empty or half full? If you look at the data from an annual basis then the glass is half empty. If you look at the units sold from 1999, 2000, and 2001, as well as the data between January 2008 and 2016 then the sales are normalizing and this is pretty good data. Remember that the forecast article was thinking that 315,000 was a probable number, that 325,000 was possible, and that it would "all" depend on inventory levels.
The Rolling Year Data is up from 5.469 million to 5.505 million from January 2017. This data is better than here we were during 2002 when we started the year with 5.38 million units. It is also better than January 2008 through January 2017. The good news is that we could see this number tick higher during this year as more people are working full-time jobs. The "bad" news is that if we only grow at 1% then we would sell 5.566 million units . This would be comparable to 2002, yet still slower than 2002 through 2006. As the monthly data is released, especially after March, April, May, and June, we will have enough data points to see how 2018 is doing compared to prior years.
This is a national snapshot of where we were during January. All real estate is local. Contact a Realtor who is knowledgeable regarding your community, your neighborhood, your condominium. Sales prices depend on inventory, condition, location, and the motivation of buyers and sellers. People who "have to buy" may pay more for a home than the average buyer. People who "have to sell" their home may sell for less than fair market value. This data bodes well for the Summer. The data also indicates that it may be some time before we have a "normal level of inventory."
It's the economy.
unity Copyright © Jack Dunn All rights reserved.