Lawler: Early Read on Existing Home Sales in March

3rd Look at Local Housing Markets in March

This is the third look at local markets in March. 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.

Closed sales in March were mostly for contracts signed in January and February. Since 30-year fixed mortgage rates were over 6% for all of January and February - compared to 4% range the previous year - closed sales were down significantly year-over-year in March. However, the impact was probably not as severe as for closed sales in December and January (rates were the highest in October and November 2022 when contracts were signed for closing in December and January).

A few prices: Median sales prices in the Charlotte region were down 0.4% year-over year (YoY), up 1.9% YoY in Des Moines, and down 10.0% YoY in Sacramento.

Lawler: Early Read on Existing Home Sales in March

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 4.51 million in March, down 1.5% from February’s preliminary pace and down 20.8% from last March’s seasonally adjusted pace.  On an unadjusted basis the YOY % decline in sales last month was largest in the West and the Northeast.

Local realtor/MLS reports that the median existing single-family sales price last month was little changed from a year ago.  The MESFSP in the West should show a decline of about 7%.  Interestingly, the median sales price in Texas was down slightly from a year ago, and the median sales price in Georgia was unchanged from a year ago.

Speaking of median existing sales prices:  in last month’s report the National Association of Realtors reported that the median existing SF sales price in February was down 0.7% from a year earlier, the first YOY drop in 11 years and in marked contrast to my projection of a 1.3% increase.  In terms of broad region the reported 6.0% drop in the West was no surprise, but the reported 6.0% decline in the Northeast was a head scratcher.  I have statewide MLS data for all NE states save for Vermont (though I did have Redfin data for that state), and here is what those data show:

As the table shows, in the Northeast only the New York State Association of Realtors reported a YOY decline in median sales prices (the NYSAR does not break out sales by type).  So why did the NAR data show such a drop?  I don’t know, but one clue could be what happened in Massachusetts.  While the Greater Boston Association of Realtors reported a YOY decline in the median SF sales price of 7.6% in February, the Massachusetts Association of Realtors reported a statewide YOY INCREASE in the median SF sales price of 4.0%.  (The Warren Group’s median SF sales price based on property records also showed a YOY gain.)  It’s possible that the NAR’s sample, which is heavily skewed to metro areas (the NAR does not use statewide data), may have shown a larger decline in prices because large metro prices fell while other area’s prices rose.  That seems like a stretch, but in any case the NAR’s YOY decline seems “bogus.”

(Note:  most NE states showed slower YOY price growth in March compared to February.)

The National Association of Realtors (NAR) is scheduled to release March existing home sales on Thursday, April 20, 2023, at 10:00 AM ET. The consensus is for 4.50 million SAAR.

Active Inventory in March

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

Inventory in these markets were down 9% YoY in March 2022 and are now up 62% YoY! So, this is a significant change from early 2022, although this is a smaller YoY inventory increase than in February (up 73% 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 March

And here is a table for new listings in March (some areas don’t report new listings). For these areas, new listings were down 17.2% 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 about the same at 17.6% YoY. Note that the Jacksonville and Houston areas continue to be outliers with new listings up YoY.

Closed Sales in March

And a table of March sales.

In March, sales in these markets were down 21.2%. In February, these same markets were down 23.4% YoY Not Seasonally Adjusted (NSA).

This is a slightly smaller YoY decline NSA than in February for these markets. The March existing home sales report will show another significant YoY decline and will be the 19th consecutive month with a YoY decline in sales.

Many more local markets to come!