Displaying items by tag: home sales

(New York)

Is New York a bellwether of US real estate performance or is it an isolated enclave with no real relevance to the majority of the country? Hard to know, but if the former, then there is a lot to worry about. NY home sales are plummeting and just showed their worst decline since the Financial Crisis. Median sales prices in Q3 dropped 12% from the previous year, the sharpest drop since 2009. Average home value fell below $1m for the first time in four years.

FINSUM: In our opinion, this is idiosyncratic to New York. The city is seeing a huge flux of newly built apartments that are boosting inventory, and at the same time there is a new progressive mansion tax hurting demand.

(New York)

It has been years since there was much good news in US real estate. The market has been slightly pessimistic for years, but finally there might be some reason for optimism. New home sales actually rose in June, a sign that health is improving in the all-important US property sector. Sales increased 7% from May, but the average home price stayed flat from one year ago at $310,400.

FINSUM: With rates likely to fall and yields having already tumbled, it would not be surprising to see a short-term pop in real estate. It would actually be quite worrying if that doesn’t happen.

(New York)

If one thing is really clear in the economy, it is that the housing sector’s momentum is clearly negative. Home sales slumped badly in November and then worse in December. Further, home buying traffic plunged too. This is not necessarily a surprise when you consider how much mortgage rates have risen, but contrasted with how well the labor market is doing, it is quite eye-opening.

FINSUM: We are going to come in with a contrarian viewpoint here. Consider these stats, all reported by Barron’s: “The median home value in December was $223,900, up 7.6% over the past year, according to real-estate listing service Zillow. That is up from about $150,000 in late 2011. Properties are sitting on the market an average of 78 days, down from 114 days in 2016. The mortgage delinquency rate is a low 1.1%, and just 8.2% of houses had negative equity—well below levels of a few years ago. The foreclosure rate has plunged to 1.2%, down from 6.3% in 2009”. That shows a very different picture!

(Los Angeles)

More bad news is flowing out of the housing market. For the last several months, home sales, new builds, and demand has been falling. Prices are down in some major metropolitan areas. Now, new data shows that mortgage demand is contracting. US mortgage applications fell to their lowest level since 2014 in recent weeks. This comes on the back of mortgage rates rising to their highest since 2010.

FINSUM: There have been eight rate hikes since 2018 and home prices are at lofty levels. A downturn should come as no surprise.

(New York)

The US real estate market has appeared to be on the ropes for several months. While the woes in commercial real estate have been apparent for some time, it is the recent reversal in the residential market that caught some off guard. Well, new data is out, and it seems to have cemented a new reality—housing is in full decline. Homes sales declined month over month, with a big drop in sales in the northeast. The home sales figure was the weakest in two years. The chief economist of the National Association of Realtors commented that “Too many would-be buyers are either being priced out, or are deciding to postpone their search until more homes in their price range come on to the market”.

FINSUM: The summer is usually a better time for home sales, so this comes during what should be a period of strength. Home prices seem bound for a correction given how pricey things have become at the same time as rates have been rising.