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Posts Tagged ‘median sales price’

Bloomberg View Column: Understanding Housing’s Dog Days

August 31, 2014 | 5:04 pm | BloombergViewlogoGray | Columns |

BVlogoThe comparison of housing market statistics against last year’s results produced misdirection in our understanding of it’s current state. Although a year-over-year comparison gets rid of seasonality, the results are at the mercy of how normal the prior year was…

The slowdown in the U.S. housing market has caused much hand-wringing. But keep this in mind: robust housing sales and price gains in 2013 were the anomaly and at odds with tepid economic fundamentals such as income, employment and credit. It’s the year-over-year comparisons that make things look worse than they are.

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Understanding Housing’s Dog Days.
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NAR Existing Home Sales Blink, And So What?

March 23, 2014 | 9:00 am |

NAR released their Existing Home Sales Report on Thursday with a headline that read: February Existing-Home Sales Remain Subdued that blamed the severe winter weather and low inventory for lower sales.

Of course inventory has been near historic lows for a few years so that’s not a new reason. I’m left with the weather and as someone who hates to use the weather as a crutch, it seems to be a pragmatic – it’s difficult to show or be in the mood to view properties when it is zero degrees outside. The weather explanation was also used in the prior report but those contracts were signed in December for the January report, before the “polar vortex.”

However the recent hand ringing caused by the downshift in sales is the concern that the recovery is cooling off.

I see the recent fretting about the cooling of housing as an indication of how improving conditions were based largely on Fed policy and not fundamentals. The combination of rising mortgage rates and declines from the year ago release of pent-up demand post-”fiscal cliff” likely gets price gains and sales levels in sync with fundamental economic conditions.

I’ve charted NAR EHS stats from the past 4 years without seasonal adjustments. Price gains have been insane so the combination of slowing sales and rising inventory will take the froth out of the market and hopefully get us on a more sustainable path.

2-14NARehs

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