Home sales decline, supply rises, prices drop the most year-on-year since 2012. Even investors back away

All-cash sales declined 22% as investors didn’t feel they were paying more. The 2023 edition of the spring sales season is here.

By wolf richter For wolf street,

Well, it’s spring sales season, the best time of year to sell a home, because that’s when prices go up and sales soar because of hot demand from homebuyers hiding out over the winter. But this year?

The median price of all types of previously owned homes, condos and co-ops whose sales closed in April fell 1.7% year over year to $388,800, the third month in a row of year-over-year declines . National Association of Realtors. We haven’t seen a debacle like this since February 2012, when the market emerged from the housing bust 1. From last June’s peak, the average price declined by 6% YCharts,

For single-family homes, the median price fell 2.1% year-over-year, the third year-over-year decline, to $393,300. For condos, the median price still rose 0.7% year-over-year to $348,000.

But it’s still spring sales season when prices always go up from one month to the next. Even during the housing bust 1, median prices often increased from month to month during the spring sales season, and sometimes significantly less. And the average price in April was up from March, but the increase was less than the increase in April 2022 (+4.3%). Hence the huge year-on-year decline (historical data via YCharts):

Sales of all previously owned homes fell A seasonally adjusted annual rate of 4.28 million home sales declined 3.4% in March to April, firmly entrenched in the dismal levels of the housing bust1.

Sales in April compared to April in previous years, according to the seasonally adjusted annual rate of sales:

  • April 2022: -23.2%.
  • April 2021: -28.2%.
  • April 2019: -18.2%.
  • April 2018: -21.2%.

Priced right, almost any home – almost anything – will sell. And lower home prices will bring in more buyers which will help stabilize the market. But this is not happening. Sellers are still thinking this too will pass, “also” the 6.5% mortgage rate.

Actual sales in April – not the seasonally adjusted annual rate, Month-on-Month (MoM) and Year-on-Year (YoY):

  • All existing homes: -6.4% MoM; -27.4% YoY; in 336,000 homes.
  • Single-family homes: -7.1% MoM; -26.9% YoY; for 299,000 houses.
  • Condos and Co-ops: 0% MoM; -31.5% YoY; 37,000 for the condos.

Investors retreat: All-cash sales – often to investors and second home buyers – fell 22% year-over-year (28% of 336,000 sales), from 120,000 homes in April 2022 to 94,000 homes (26% of 463,000 sales). .

By region, year-on-year sales fell in all regions (map via NAR):

Average days on market increased, According to the National Association of Realtors, homes that were actually sold spent 22 days on the market in April before selling, up from 17 days in April last year.

Another measure of average days on the market also lengthened: Homes were either sold or taken off the market after 49 days in April, up from 32 days in April last year. realtor.com,

increased inventory for sale from 1.04 million homes in April, from 980,000 homes in March and from 970,000 homes in February.

months supply increased to 2.9 months, up from 2.6 months in March and up from 2.2 months a year ago. In 2019, supply ranged between 3.0 months and 4.3 months.

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