You Cannot Sell Invisible Homes
One of the key economic indicators, other than the jobs report and the Consumer Price Index (CPI,) and the monthly and annual retail trade survey (MARTS) report is the existing home sales report. We received the new construction data last week and the new home sales data yesterday. The existing home sales data has some important components: The number of units sold for the current month, the average sales price, and the "annualized rate of sale." The problem that we have been seeing is that we have a very low level of homes for sale. You can't sell what isn't up for sale.
April Sales slower than 2016, Comparable to 2001, 2013, and 2015. The headlines were that we sold fewer homes than March and fewer homes than April of 2016. We were selling record levels of homes through 2005 and setting record sales prices through 2006. We have not yet returned to those record levels, so what we are doing is returning to pre-recession levels of sales. The home sales forecast article was expecting an average sales price between 285,000 and 301,000 dollars and expecting 500,000-525,000 units to be sold. The average sales price did set an all-time April high of $287,500. Record levels are good. The number of units sold faltered to 449,000 units. This is the "same" as we saw during 2015 and nearly the same as we saw during 2001 and 2013.
April Inventory was the lowest since 1999. If you consider the situation that there were 2.180 million units for sale during April 1999 and that we have never had under 2 million units for sale during April since 1999, the inventory level of 1.93 million homes for sale means fewer opportunities for a sale. We have had as many as 2.5 million units for sale during April as recently as 2012. Last year we had 2.12 million units for sale. We might have sold more units if more units were for sale. According to the Realtors, the average days on market was 29 days - this is astonishingly low.
The Current Year Sales Numbers are better than 2015 and 2016 and tracking with the data from 2002 and 2003. The Realtors are saying that we are tracking with an annual rate of 5.57 million units. This would be better than 2015 and 2016. We sold 5.63 Million units during 2002 and 6.17 million units during 2003. If the inventory comes on-line we may sell upwards of 6.0 million units . Will it be 5.7 million, 5.8 million, 5.9 million?
The rolling year sales is 5.483 million and rising. The trend-line is up. We are doing better than April 2002, so a number of 5.63 to 5.83 million units sold is possible. Hiring is improving. More jobs, more sales.
There is more good news in this data than is being reported. The April Average sales price was almost as high as it was this past June, when we set a record high. The monthly units sold was comparable to last month and better than October through February - this is called the Spring Market. Inventory is rising and is yet still very low. This may lead to quicker sales and higher sales prices. This may lead to some people shifting from exiting homes to new construction. We are on-track t sell more homes than we did during 2008 through 2016. We are selling at a pace comparable to April 2002. If you want to sell, now may be the time to do so.
Remember that all real estate is local. Local can be school district level, neighborhood level, condominium association level or house style level.
It's the economy.