Lawler: Early Read on Existing Home Sales in June & 4th Look at Local Markets

California Home Sales Down 19.7% YoY in June, Prices Decline 2.4% YoY

An early read 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 4.26 million in June, down 0.9% from May’s preliminary pace and down 17.0% from last June’s seasonally adjusted pace.

Local realtor/MLS reports suggest that the median existing single-family home sales price last month was virtually unchanged from a year earlier.

Note: the NAR is scheduled to release June existing home sales tomorrow, Thursday, July 20th, and the consensus expectation is for the NAR to report sales of 4.23 million on a Seasonally Adjusted Annual Rate (SAAR) basis, down from 4.30 million in May.

California Home Sales Down 19.7% YoY in June, Prices Decline 2.4% YoY

California doesn’t report monthly inventory numbers, but they do report sales and the change in months of inventory.

From the California Association of Realtors® (C.A.R.): Elevated interest rates and limited new listings suppress California home sales in June, C.A.R. reports

• Existing, single-family home sales totaled 277,490 in June on a seasonally adjusted annualized rate, down 4.1 percent from May and down 19.7 percent from June 2022.

• June’s statewide median home price was $838,260, up 0.3 percent from May and down 2.4 percent from June 2022.
...
Elevated interest rates and a shortage of homes for sale continued to dictate the market in June, as California home sales remained below the 300,000 annualized pace for the ninth consecutive 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 277,490 in June, 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 June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

June’s sales pace was down 4.1 percent on a monthly basis from 289,460 in May and down 19.7 percent from a year ago, when a revised 345,760 homes were sold on an annualized basis. Sales of existing single-family homes in California remained below the 300,000-unit pace for the ninth consecutive month. The yearly drop was the smallest since May 2022 and marked the first time in a year that sales dropped by less than 20 percent from a year ago. However, the smaller decline was due primarily to weaker sales last June, when sales dropped below 350,000 for the first time in two years.

“California’s housing market has improved since the winter and appears to have found its footing as sales declined at the slowest pace in over a year,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR^®. “Despite elevated interest rates, the demand for housing continues to outpace the availability of homes for sale, as buyers slowly adapt to the new normal under the current housing market conditions.”

California’s median home price exceeded $800,000 in June for the third straight month, edging up 0.3 percent from May’s $836,110 to $838,260 in June. The statewide median price continued to rise and reached the highest level in ten months. Tight housing supply and more high-end homes being sold relative to prior months continued to put upward pressure on prices. Despite the improvement from early 2023, the median home price in California dipped 2.4% on a year-over-year basis for the eighth consecutive month from $858,800 in June 2022. The downward movement in home prices appears to be stabilizing, but more dips in the median price are expected in the coming months as rates will likely remain elevated for most, if not the entire third quarter, of 2023.
...
• Housing inventory in California inched up in June from the prior month but dipped again from last year, as tight housing supply continues to be the norm. The statewide unsold inventory index (UII) in June 2023 dropped 8.3 percent from a year ago and increased 4.8 percent on a month-over-month basis. Active listings at the state level fell sharply by 34 percent from last year and registered the largest year-over-year decline since May 2021. With mortgage rates expected to be high in the next couple of months, California may not see any meaningful improvement in its housing inventory for the rest of the third quarter.

emphasis added

4th Look at Local Housing Markets in June

This is the fourth look at local markets in June. I’m tracking a sample of 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.

Closed sales in June were mostly for contracts signed in April and May. Since 30-year fixed mortgage rates were in the 6.4% range in April and May - compared to the 5% range the previous year - closed sales were down year-over-year in June.

Active Inventory in June

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

Inventory surged in some of these markets last year, but that has changed.

Inventory for these markets were up 23% year-over-year (YoY) in May and are now up only 1% YoY.

Notes for all tables:

1. New additions to table in BOLD.

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

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

   

New Listings in June

And here is a table for new listings in June (some areas don’t report new listings). For these areas, new listings were down 23.8% 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 19.1% YoY. The decline in new listing in June - for these areas - was larger than the YoY decline for the last several months.

Closed Sales in June

And a table of June sales.

In June, sales in these markets were down 14.9%. In June, these same markets were down 15.9% YoY Not Seasonally Adjusted (NSA).

This is a smaller YoY decline NSA than in May for these markets. Note that there were the same number of selling days each year in June 2022 and June 2023.

A key factor in the smaller YoY decline was that sales were steadily declining last year due to higher mortgage rates.

This sample data suggests that June existing home sales report will show another significant YoY decline - and will probably be below the May sales rate of 4.30 million (SAAR) - and the 22nd consecutive month with a YoY decline in sales.

I’ll have several more local markets after that will be released after the NAR report, including New York, Miami, and Illinois.