Slowdown in Showings Suggests a Further Decline in Existing Home Sales in August
The following data is courtesy of David Arbit, Director of Research at the Minneapolis Area REALTORS® and NorthstarMLS (posted with permission). Here is a link to their data.
This graph shows the 7-day average showings for the Twin Cities area for 2019, 2020, 2021, and 2022. The 7-day average showings (red) are currently off 22% from 2019.
There was a huge dip in showings in 2020 (black) at the start of the pandemic, and then showing were well above 2019 (blue) levels for the rest of the year. And showings in 2021 (gold) were very strong in the first half of the year, and then were closer to 2019 in the 2nd half. Note that there were dips in showings during holidays (July 4th, Memorial Day, Thanksgiving and Christmas), and also dips related to protests and curfews related to the deaths of George Floyd and Daunte Wright.
2022 (red) started off solid but is now well below the previous three years. This slowdown in showings started in May and accelerated in June. The decline in July and the first half of August are similar to the decline in June.
In the existing home sales report for July released yesterday, closed sales, not seasonally adjusted (NSA) were down 22.4% year-over-year. July sales were mostly for contracts signed in May and June. May showings were only down about 13% year-over-year.
This slowdown in showings suggests further declines in closed sales in August - since August sales will be mostly for contracts signed in June and July when showings were down sharply. This early data for August might suggest that September closed sales will see a similar year-over-year decline as in August.
The second graph shows the Twin Cities affordability index. The Twin Cities affordability index (like the NAR’s) went below 100 in April, for the first time since at least 2003 - and is now at 99 in July (up from 91 in June as mortgage rates declined from over 6% in June). This means a local family earning the median income can no longer afford the median priced home. This is a 24.4% decline in affordability year-over-year in the Twin Cities area.
The bottom line: This slowdown in showings suggests further declines in closed sales in August (this data is just the Twin Cities, but we’ve seen a similar slowdown just about everywhere).