This week we received strong information regarding the new construction data. The real estate sector is an economic multiplier for jobs and retail sales. The higher the construction data, and the higher the new home sales, the more people need new electronics, appliances, and furniture for their homes. The more new construction sales, and the more existing home sales, the more movers, appraisers, lenders, salespeople, construction workers, and other services are required. Higher demand, higher wages. Higher wages, more retail spending, more homes bought, and the virtuous cycle continues. The projections for new home construction were in line with what happened. The same forecast article projected that existing home sales could continue their May climb and break through 570,000 units. It was also projected that we would set another record for the May Average Sales Price, breaking the $300,000 mark. The biggest question was going to be whether or not inventory was going to hold back sales or if the lack of inventory would push the average sales price even higher than expected, due to the Law of Supply and Demand.
Existing Home Sales Sales Price Set Another May Record. The Average Sales price hit $304,900. Remember that the average sales price in one market may be entirely different from another market. Sales vary by state, city, school district, neighborhood, and style. Condominiums sell for different prices than single family homes. The important thing here is that sales prices are rising. People who have purchased homes during prior years should be able to sell their homes for a profit if they want to sell or need to sell their homes. Consult a Realtor.
The Units Sold were better than 2016 and slower than 2017. It is also important to note that the units sold were comparable to May 2001. The general trend is higher with a variation from year to year. This pattern of some years being better than others is normal.
Inventory was at an all-time low for May. It is "impossible" to sell what isn't listed. It is possible to cold call for one-party listings. We had a record low inventory during May 2017. We had a drop in May inventory during May 2016.
Next week we will receive the New Home Sales data for May. We should see a surge in sales and a surge in average sales price.
It's the economy.
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