Thursday, February 18, 2016

Lawler: Early Read on Existing Home Sales in January

by Bill McBride on 2/18/2016 01:52:00 PM

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of about 5.36 million, down 1.8% from December’s preliminary pace and up 11.2% from last January’s subdued seasonally adjusted pace. I should note that estimating the NAR’s seasonally-adjusted pace is unusually tricky in January, as the January NAR report incorporates annual seasonal adjustment revisions. I have tried to take likely revisions into account in my January projection. On an unadjusted basis I estimate that home sales last month were up about 8.5% from last January’s unadjusted pace. Since this January had one fewer business day than last January, such an unadjusted sales gain should translate into a higher YOY gain in seasonally-adjusted sales.

It is difficult to assess the degree to which weather played a role in last month’s sales, as weather patterns (relatively to “the norm”) varied dramatically across the country. For example, in the broad “Mid-Atlantic” region weather was unusually mild during much of the month, but the region got hit with a historic snowstorm that kept much of the area blanketed during the last 8-9 days of January. The severity of the snow was predicted well in advance, however, and as such there were probably fewer than normal home closings scheduled at the end of the month. MRIS, which covers most of Maryland, DC, Northern and much of Central Virginia, parts of West Virginia, and a very small part of Pennsylvania, reported that closed home sales in the region were up 10.1% from last January, a gain close to what one would have expected given past pending sales. MRIS also reported, however, than new pending sales in the area were down 5.7% from a year ago last month, a drop that was almost certainly related to the snowstorm.

Local realtor/MLS reports also suggest to me that the inventory of existing homes for sale as estimated by the NAR at the end of January will be down about 0.6% from December, and down about 4.3% from last January.

Finally, local realtor/MLS reports suggest that the NAR’s median existing single-family home sales price in January should be up by about 7.5% from a year earlier.