It's the Economy

Existing homes sales headline misled investors yesterday

December Existing Home Average Sales Price Record

The December Real Estate Forecast article projected that we could see a new December Average Sales Price record, that inventory would drop from November’s level and still be better than the December 2017 level, and that units sold could surprise to the high side of expectations. Two out of three isn’t bad.

The data wasn’t as bad as the headline indicated. The REALTORS Association published their December Existing Home Sales Report with the headline: “Existing Home Sales see 6.4%  Drop in December.” The drop referenced in the headline was the seasonally adjusted drop from last month’s seasonally adjusted annual rate of sales. This is not reality.

This month we saw 377,000 units sold – well off from last year’s 427,000 units. This was a bit of a surprise. There was the possibility that units would drop from last December’s value projected in the December Real Estate Forecast Article. We saw a drop in both condominium sales and single family sales. This level of sales was better than December 2007-2012 and slower than December 2013-2017.

This Month we set a December Record average sales price of $292,800. Th’s is is an increase from last year’s $288,300 of 1.56% We have experienced 3% inflation in shelter costs “all year long.”

The Annual Sales came in at 5.342 Million units, not the headline 4.990 million annualized, seasonally adjusted value. This month the rolling year and current year data are identical., by definition. The Current Year data shows that while the end of the year sales were slower than 2017 and 2016 that they were better than 1999-2001, and they were better than the end of the year 2007-2015. The graphic is for the rolling year data which is the same as the current year data during the month of December. The total year sales dropped just over 3%, not the 10.3% reported in the report.

Inventory dropped month to month, as projected, and grew from December to December, as projected.  We set an “all-time record low” for inventory during December 2017. Inventory had been declining December to December during 2016, 2016, and 2017.  It is difficult to have strong sales without strong inventory. its sold

The December existing homes report was okay. We set a December record for the average sales price. Inventory improved December to December for the first time since 2015. Units sold dropped less than reported. The Devil is in the data, the non-seasonally adjusted data.

It’s the economy.

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