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Thursday, May 17, 2012

Lawler: Early Read on Existing Home Sales in April

by Calculated Risk on 5/17/2012 03:47:00 PM

From economist Tom Lawler:

Based on local realtor/MLS reports I’ve seen so far, I estimate that US existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of about 4.53 million in April, up 1.1% from March’s pace, and up 7.9% from last April’s pace. As was the case in March, the “subdued” nature of April sales relative to “anecdotal” reports of significantly improved conditions in many markets across the country in part reflected the sized YOY decline in REO sales, which in turn were the result of sharply lower REO inventories.

On the inventory front, my and other’s tracking would suggest a monthly increase in the number of existing homes listing for sale of a bit over 2% in April. However, for some reason the NAR’s inventory number in April has for many years shown a much larger monthly gain than listings data might suggest, for reasons that aren’t clear to me. YOY, I’d estimate that existing home inventories were down by about 21% YOY in April, and if the NAR’s inventory number showed a 21% YOY decline, that would imply a monthly increase of around 6.8% (assuming March’s inventory number is not revised, though I suspect it will be revised upward a bit.)

On the median sales price front, the story for April was the sharp increase in the number of markets reporting YOY increases in median sales prices – in some areas some substantial gains. In many (though not all markets) one reason was substantial YOY declines in the “distressed” sales share of total sales, and especially declines in the foreclosure share of sales. In other areas, however, anecdotal evidence suggests that many areas were seeing “real” price increases, though one can’t rightly tell for sure based on median sales prices. Net, I estimate that the NAR’s median SF sales price will show a YOY increase of about 5.1% in April, which would be the largest YOY increase since May 2006. Of course, a 5.1% YOY gain in the SF MSP for April would still leave last months median sales price almost 26% below the median sales price in April 2006!

CR Note: As Lawler notes, the median sales price is impacted by the mix, so I use other measures to track prices.

Other measures of inventory suggest a much smaller increase in inventory in April. However, if reported inventory increases 6.8% that would be 2.53 million, with month-of-supply at 6.7 months, up from 6.3 in March.

The NAR is scheduled to report April existing home sales on Tuesday, May 22nd.