Wednesday, November 18, 2015

Lawler: Early Look at Existing Home Sales in October

by Bill McBride on 11/18/2015 04:20:00 PM

From housing economist Tom Lawler:

Based on publicly-released realtor/MLS reports from across the country which combined total over 200,000 residential sales, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of about 5.33 million in October, down 4.0% from September’s preliminary pace and up 3.3% from last October’s seasonally adjusted pace.

On a not seasonally adjusted basis the YOY % change in home sales last month was down sharply from September in the vast majority of markets, and there were quite a few markets where sales were down from a year ago A few markets – including Houston, Oklahoma City, and Denver – saw double-digit YOY % declines in home sales last month. To be sure, there was one fewer business day this October compared to last October, which ceteris paribus would result is a mildly lower YOY % change in unadjusted sales. However, the overall sales decline was considerable greater than can be attributed to any “business-day count” effect.

In some markets slower home closings may have been adversely impacted by bad weather, as there were very heavy rains and flooding in a few parts of the country early last month (e.g. South Carolina, where home sales were down 5.5% YOY). Weather cannot explain, however, the broad-based slowdown in sales. It may also be possible that the new “TLIA-RESPA Integrated Disclosure” (TRID) rules may have delayed closings slightly in some cases.

On the inventory front, realtor/MLS data suggest that the inventory of existing home sales as estimated by the National Association of Realtors declined by a bit more this October than last October, and I project that the NAR’s inventory number for October will be 2,160,000, down 2.3% from September’s preliminary level and down 3.6% from last October. A very notable exception to the YOY decline in inventories is Houston, where home listing at the end of October were up 18.9% from a year ago.

Finally, realtor/MLS data suggest that the median existing SF home sale price last month was up about 5.7% from last October.