New Home Sales Should Continue to Rise - Beating 2016 by a wide margin. Last year we saw 561.000 units sold over 12 months. This year we have seen 526,000 units sold during 10 months. The Rolling Year data was 604,000 units sold during the past 12 months. The Current Year data is tracking with 608.000 to 625,00 units sold. The Current year data is better than the rolling year data, so the housing market is expanding. It is projected that we should sell more units this month than last month and more units this November than last November. Expect 47,000 to 57,000 units sold, or roughly 52,000 units. Over 50,000 would be the best since 2007.
Consumer Confidence should mean another record Average Sales Price. The Average sales price last month poked through the $400,000 level. The best November was November 2015 was $376,800. Expect an average sales price over $380,000. Don't be surprised if it exceeds $390,000. Be impressed if we hit $408,000 or smash through to $424,900. Part of this surge in values could be upgrades. Part of this surge could be due to a low inventory of units for sale, new and existing.
A Thankfully Strong Real Estate Forecast
There are three major real estate reports that will be released over the next two weeks: The November New Construction Data, the November New Home Sales data, and the November Existing Home Sales data. Last month was a great month for all three reports.
The Market Value (MV) for a home is determined when a motivated buyer and a motivated seller meet. The Buyer who doesn't have to buy and the seller who does not have to sell are not really motivated. The Buyer who has to buy or the seller who has to sell is "over-motivated." A seller who has to sell may sell for a loss. A buyer who must buy may pay a premium. The Average Sales Price is the price that average buyer agree to pay for an average home, and the price that an average seller agrees to accept. All real estate is local. Price, Terms, Condition, Location and Motivation determine a property's vale. Values can vary by age, style, school district and neighborhood. If you have any questions after reading this article, contact a local Realtor.
New Home Construction Should Pound Higher. The New Construction data is comprised of many components. The three main components are the New Home Starts, New Homes Under Construction, and the New Homes Completed data. New Home starts dropped to a 33-year low during 2008. The builders have literally been digging out of a hole since that time. We normally saw over 60,000 units started during the month of November between 1991 and 2006. Starts now turn into Spring and Summer Sales. Starts should smash through the 60,000 level, again, and should fall between 65,000 and 69,000 units.
There a over a Million homes Under Construction right now - and we should see additions to that level. We have had over a million units construction all year long. We have seen increase in the number of units under construction rise continually since December of 2016. The inventory has been growing by up to 10,000 units each month. This month we should see rough;y 1.12 Million units under construction, unless there is a surge to get homes "closed up" prior to Winter and in preparation for a busy Spring and Summer for 2018. Expect a number between 1.108 and 1.12 million units - It could spike to over 1.2 million.
Completions Should Soar, as well. Last November we saw 100,000 units completed for the first time since 2007. The 100,000 level was "normally" the floor between 1992 and 2007. Expect a number between 112,000 and 119,000 units completed. If the under construction graph is an indication of possibilities than 124,000 may be within reach, if completion spike as they did last year (20-25% increase.)
November is a volatile month for construction as builders either get caught off-guard by an early Winter or Sprint before a late Winter starts. The possibilities for growth or contraction between October and November cause headaches for forecasting. The overlap between month to month gains/losses and same month to same month gains/losses is from where the projected range of growth is derived. The net-net is that the inventory level is solid. The question is do we have the construction workers who can finish these houses? Has the hurricane season slowed completions as reconstruction takes labor away from new construction? Do we have a labor shortage as illegal immigration is thwarted? Will we see labor costs, and therefore new home sales prices, rise as more work is done "above table?"
Existing Home sales tend to drop during November - Could Hit 2002 or 2003 level of units sold. This may not sound like much. The thing to remember is that both the average sales price and the number of units sold took hits during the Housing Recession. The Current year sales is trending towards between 4.452 and 5.631 million units. The Rolling Year data is at 5.514 Million. It seems unlikely that 450,000 units will be sold this month, in part due to the lack of inventory and in part to the natural decline in units sold between October and November. Expect more units sold during November of last year and less than October this year, a value between 430,000 units and 449,000 units.
Another Record Average Sales Price for November? Supply is low. Mortgage rates are low. People can afford to pay more, and sellers are able to hold out for more money. Expect an average sales price record. Expect a $282,000. Be prepared for a $292,000 value. Do not be surprised by a $302,000. Most likely 284,900 to $289.900.
Real estate sales beget other sales: Furniture, Appliance, Landscaping Equipment, even automobiles. Electronics and Appliance and Furniture were up during November - possible hurricane related - possibly new home sales or existing home sales related.
It's the economy.
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