3rd Look at Local Housing Markets in January

Lawler: Early Read on Existing Home Sales in January

This is the third look at local markets in January. I’m tracking about 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.

Lawler: Early Read on Existing Home Sales in January

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 4.18 million in January, up 4.0% from December’s preliminary pace and down 35.6% from last January’s seasonally adjusted pace. On an unadjusted basis the YOY % decline in sales was once again the largest in the West. I should note that the NAR’s January release will incorporate updated seasonal factors, and I don’t always “guesstimate” these changes accurately.

Local realtor reports, as well as reports from national inventory trackers, suggest that the inventory of existing homes for sale last month was up substantially from a year earlier, and that the YOY % gain was higher than that seen in December. However, the NAR’s estimate may not show the same increase as these reports suggest, as most of these reports exclude listings with pending contracts while the NAR’s inventory estimate appears to include listings with pending contracts. E.g., the Realtor.com report for January showed that the average number of listings excluding those with pending contracts last month was up 65.4% from last January compared to a YOY increase of 54.7% in December, while average listings including pending contracts were up just 13.1% YOY in January compared to an 6.0% rise in December. The NAR’s inventory estimate for the end of December was up 10.2% a year earlier.

Finally, local realtor/MLS reports suggest that the median existing single-family home sales price last month was up by about 2.4% from last January.

On a separate note: While I’ve been unable to produce national estimates of the NAR’s Pending Home Sales Index from local realtor reports (not all local realtor reports include new pending sales, and many that do often revise their numbers significantly), I did notice that the majority of realtor reports that show new pending sales showed significantly smaller YOY declines in January relative to December. As such, I would guess that the seasonally adjusted January PHSI will show a pretty decent-sized MOM increase.

The National Association of Realtors (NAR) is scheduled to release January existing home sales on Tuesday, February 21, 2023, at 10:00 AM ET. The consensus is for 4.10 million SAAR.

California Home Sales Down 45.7% YoY in December, Prices Decline 1.9% YoY

In December, California home sales were down 44.1% YoY.

California doesn’t report monthly inventory numbers, but they do report the change in months of inventory. Here is the press release from the California Association of Realtors® (C.A.R.): California home sales inch up in January for second straight month as prices moderate further, C.A.R. reports

• Existing, single-family home sales totaled 241,520 in January on a seasonally adjusted annualized rate, up 0.4 percent from December and down 45.7 percent from January 2022.

• January’s statewide median home price was $751,330, down 3.0% percent from December and down 1.9% percent from January 2022.
...
California home sales edged up in January for the second straight month, as interest rates continued to take a breather, but still remained below the 250,000-unit sales pace for the third straight month, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 241,520 in January, according to information collected by C.A.R. from more than 90 local REALTOR^® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2023 if sales maintained the January pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. January’s sales pace was up 0.4 percent on a monthly basis from a revised 240,630 in December and down 45.7 percent from a year ago, when a revised 444,400 homes were sold on an annualized basis.

“Thanks to slightly waning interest rates and tempering home prices, California’s housing market kicked off the new year with another step up and continued to improve in January as buyers gained more confidence in purchasing a home and the affordability outlook improving slightly,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR^®. “While the monthly sales gains have been nominal over the past two months, the market is moving in the right direction, and more gradual improvements could be coming in the months ahead as the market moves into the spring homebuying season in a few weeks.” 

California’s median home price receded in January to $751,330, down 3.0 percent from the $774,850 recorded in December, which was the fifth straight monthly decline. January’s price also was lower on a year-over-year basis for the third consecutive month, declining 1.9 percent from the $766,250 recorded last January.
...
• Housing inventory in California continued to rise in January to reach the highest level in 32 months. The statewide unsold inventory index (UII) was double the level of 1.8 months recorded in the same month of last year, surging to 3.6 months in January 2023, a level last seen in May 2020, when the state underwent a pandemic lockdown. Unsold inventory increased from a year ago by 88 percent or more in all price ranges …

emphasis added

Active Inventory in January

Here is a summary of active listings for these housing markets in January.

Inventory in these markets were down 25% YoY in January a year ago and are now up 90% YoY! So, this is a significant change from early 2022, and a larger YoY inventory increase than in December (up 83% YoY).

Notes for all tables:

1. New additions to table in BOLD.

2. Northwest (Seattle), Santa Clara (San Jose), Jacksonville, Source: Northeast Florida Association of REALTORS®

3. Totals do not include Atlanta, Denver or Minneapolis (included in state totals)

   

New Listings in January

And here is a table for new listings in January. For these areas, new listings were down 8.5% YoY. Potential sellers that are locked into their current homes with low mortgage rates has pushed down new listings.

Last month, new listings in these markets were down 21.8% YoY. This is a significantly smaller YoY decline in new listings, and something to watch. There are certain markets - like Georgia and Florida - where new listings are up YoY!

Closed Sales in January

Here is a table comparing the year-over-year Not Seasonally Adjusted (NSA) declines in sales this year from the National Association of Realtors® (NAR) with the local markets I track. So far, these measures have tracked closely, and the preliminary data below suggests a sharp decline in year-over-year sales in January.

In January, sales were down 33.9% in these markets. In December, these same markets were down 37.5% YoY Not Seasonally Adjusted (NSA).

This is a smaller YoY decline than in December for these markets. This data suggests NAR reported sales will rebound in January from 4.02 million SAAR in December.

This will still be a significant YoY decline, and the 17th consecutive month with a YoY decline.

Note: Even if existing home sales activity bottomed in December, there are usually two bottoms for housing - the first for activity and the second for prices. See Has Housing "Bottomed"?

More local markets to come!