Larry got his knickers in a bunch today with the news that the national sales dropped 7.1% from January to February:
http://www.realtor.org/news-releases/2016/03/existing-home-sales-fizzle-in-february
Lawrence Yun, NAR chief economist, says existing sales disappointed in February and failed to keep pace with what had been a strong start to the year. “Sales took a considerable step back in most of the country last month, and especially in the Northeast and Midwest,” he said. “The lull in contract signings in January from the large East Coast blizzard, along with the slump in the stock market, may have played a role in February’s lack of closings. However, the main issue continues to be a supply and affordability problem. Finding the right property at an affordable price is burdening many potential buyers.”
Our market seems hot on the lower end, and not so much on the higher end. Let’s examine our local counts, and differentiate by the price categories too, rather than make broad assumptions like the talking heads.
We covered this on March 3rd, but let’s add in the five late-reporters to give a final tally to the February sales counts:
NSDCC Houses Sold in February
| Year | |||
| 2012 | |||
| 2013 | |||
| 2014 | |||
| 2015 | |||
| Jan16 | |||
| 2016 |
The number of sales is a leading indicator, and a precursor of things to come. It’s doubtful that home sellers will get too concerned about a couple of data points, but it will be interesting to see if the trend of fewer sales continues.
To demonstrate how useless the national reports are, here’s another out today:
http://rismedia.com/2016-03-20/february-sales-jump-higher/
As the popular home-buying season approaches, February sales saw a jump from both January and last February, according to a recently released report from REMAX. The year-over-year change was 4.8 percent and the increase over January was 5.8 percent, which is in line with the 5.2 percent average seen in each month of February since 2009.
January and February had the same number of business days; we had good weather, and rates dipped into the mid-3%s.
Yet NSDCC sales in February were -18% compared to January.
Business days are identical for Jan and Feb. but true, we could hit a stretch of low sales activity at any time:
http://www.realtor.com/news/real-estate-news/february-existing-home-sales/
It’s definitely a loss of momentum,” says Javier Vivas, an economic researcher at realtor.com®. “But it’s certainly not something to panic about.”
He blames the snow in the Northeast, the bumpy stock market, and the slightly shorter month (although less short than usual, thanks to leap year) for the declines.
“Demand is there. We don’t see any signs of it slowing down,” Vivas says. But “we don’t really seem to have any escape from the lack of affordable homes.”
The median price of an existing home was $210,800 in February—a nearly 1.4% decline from January. (Woohoo for buyers!) But the sticker price was still up 4.4% from a year ago.
The majority of homes, 44.6%, that sold last month were in the $100,000 to $250,000 range. That was followed by 28.4% of homes costing a cool $250,000 to $500,000.
Those eager to own the deed to their own kingdom are holding off until they can find residences within their price range, Vivas says.
But he is confident sales will pick up in March as spring gets underway.
“Typically, February is one of the slowest times of the year,” Vivas says, attributing that to the slush and freezing temperatures that usually dominate much of the country at this time.
But Vivas is worried that investors are beginning to drive up prices on the affordable end of the market, which, in turn, keeps more people renting.