Expectations were higher July inventory, higher sales price,
over 500,000 Units Sold
The July existing home sales data was released today. Last week this column produced a July Real Estate Forecast article that used the current year data, the rolling year data, the month to month data, and the same month data to projected what could be expected. Sales have been held back by a lack of inventory since December of 2015. June 30th, or the Friday closest to it, is the peak closing day of the year. We often see units sold decline month to month, and can see units sold drop July to July, as we did during 2014 and 2016. the current year data projected 501,000 units sold. The rolling year data projected 513,000 sold. The month to month data project 484,000 to 587, 000 units sold with a number of 530,000 seeming more realistic. The July to July data projected 477,000 to 528,000 units sold. The over lap of 484,000 to 528,000 meant that a number of 504,000 was reasonable.In any case, a new July record for average sales price was anticipated, over $300,000 and approaching 315,000.
July 2018 saw more total sales than either July 2016 or July 2017. The headline from the REALTORS was that sales dipped 0.7%. The number of units sold hit 522,000 units. There was a slight uptick in dingle family units sold from 455.000 to 465,000. The balance were condominiums.
The average sales price hit a record $307,800. This was between almost perfectly between $300,000 and $315,000. This was as expected.
July Inventory is tied for a record low, and that is good news. The lowest inventory recorded during July was 1.92 million during July 2017. This was lower than the previous low of 1.96 million units during July 2000. It is difficult to sell more homes when you do not have more inventory to sell. Inventory was a little higher in the Midwest and in the South, as compared to July 2017.
Current Year sales are slightly higher than 2016 and slightly lower than 2017. The current year data through the first seven months stand at 3.153 Million Units. We had sold 3.127 million through July 2016 and 3.204 million units during 2017. This means that we should see end of the year sales between 5.45 million units and 5.51 million units. We could see more units sold this year as more people are working full-time this year than last year or during 2016.
The Rolling Year data is better than July 2016 and slower than July 2017, too. The trailing year, or rolling year, data stands at 5.46 million units. We were at 5.335 million during July 2016 and 5.529 million units during July 2017. This means that we could see 5.432 million units sold by the end of the year. The current year data is slightly ahead of the rolling year data, so it appears that there may be more good news coming by the end of the year. The graphic can be found here.
The average sales price continues to climb. Rising sales prices may shake loose some sellers. There was an oversupply of existing homes for such a protracted period of time that some people may have hesitated to place their homes on the market. The average sales price dropped during the housing recession, making hard, if not impossible, to recover your original purchase price. Where inventory was slightly higher during June 2018 than 2017, this month the inventory was identical. We could have seen more units sold. We could have seen fewer home solds. We could have seen a higher average sales price. We could have seen a lower average sales price. This was a Goldilocks Report - not too hot, not too cold.
It's the economy.