A precursor to the off-sales in April and May.
By wolf richter For wolf street,
March is with both feet in the spring sales season, when home sales boom and when prices go up, and where everything looks good for a few months, whatever it may be, after the doldrums of winter.
So, okay, here we go again. Pending home sales — which is “a forward-looking indicator of home sales based on contract signing” — fell 5.2% from February to March, according to the National Association of Realtors today, causing annihilation The Slight Gain In February That Sent All The Headlines With The Hype,
The index value was set at 100 for contract signing in 2001. Today’s value of 78.9 is 21.1% below the index average in 2001. Compared to last March, the index value of contract signing fell …
- up to 23.2% by March 2022
- up to 30.2% from March 2021
- From March 2019 to 25.1%.
Well, as you can see in the chart above (via Data YCharts), that small gain in February that grabbed all the headlines was revised in today’s release, and February is now flat with January.
The NAR defines a “pending sale” as a transaction where a contract was signed but has not yet closed. Deals can fall through for a variety of reasons. If all goes well, the sale usually closes within a month or two of signing the contract. So this is a precursor to the sell off in April.
Banking crisis to blame?
Pending Home Sales by RegionMarch fell by most in the West, compared to a year earlier.
The National Association of Realtors didn’t say, but the banking crisis came to the fore in early March. The Silicon Valley bank implosion on March 10 shook the entire startup ecosystem Not only in Silicon Valley but across America. The run on the bank began weeks ago, the startup scene was Twitter with it, so to speak; It ended in the last few days.
And The First Republic in San Francisco hasn’t quite torn down yet, it’s still standing, knock on wood, but it is in deep trouble after a massive run on its uninsured deposits. It’s been floundering for weeks, and its share price has plummeted.
The banking crisis has frayed a lot of nerves, not only in the region, but across the banking sector as a whole, Wall Street and regulators. And for regular people, it became a messy spectacle played out in front of them in the media, and some may even get chills again.
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