Lagging Supply Leads to Slowdown in Sales

The National Association of Realtors (NAR) recently released the results of theirExisting Home Sales Report. Despite the fact that properties are selling faster than they have at any other time since July of 2013, existing home sales declined 3.3% from March.

NAR’s Chief Economist Lawrence Yun explained the main reason for the slow:

"April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices.”

One major news organization actually used this headline about the decline:

EXISTING HOME SALES CRATER IN APRIL, FALLING 3.3%

They certainly haven’t cratered! April marked the second month in a row that the annual sales pace remained above the five million mark (5.04 million). Year-over-year sales have increased for seven consecutive months and are still 6.1% above a year ago.

Every month, SentriLock, LLC provides NAR Research with data on the number of homes shown to potential buyers. This data is referred to as ‘Foot Traffic’ and is a great predictor of future sales and buyer demand. In April, buyer demand remained at the same level experienced in March.

SO WHY DID SALES GO DOWN?

Buyers who are ready and willing to make a purchase are entering a market where their dream house may not have been listed yet. They can’t find it! Or if they find it, it happens to catch the eye of other buyers and an ‘auction like environment’ begins.

"Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace," says Yun. "To put it in perspective, roughly 40 percent of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012." (emphasis added)

The median home price of existing homes sold in April was $219,400, which is 8.9% higher than last year, and marks the 38thconsecutive month of year-over-year price gains.

BOTTOM LINE

So how do you make sense of everything that’s going on in the housing market when there are so many conflicting headlines on the same report?

John Burns, real estate expert and CEO of John Burns Real Estate Consulting gives this advice:

“The bottom line is this: don't make decisions based on newspaper articles. Read the actual press release, including the methodology, and make sure the results jive with other data points and qualitative feedback you receive.”

If you are one of the many homeowners out there realizing that now may be the time to list your home for sale, or one of the many renters debating a purchase, sitting with a local real estate professional who takes the time to find out what’s really going on in the market, should be your first step!


eaee40d8 637f 4010 b78d 02ecc4ab9d17 11d523ea 03a6 4fe3 873f 1a808e578855 6af47719 061e 48d9 8606 c91dfd103330 c747d5d4 9e34 4f6f b18e e72cfd9fb677 4dcfd239 fd82 4312 aebd d27e38dfaf26 e4bc9a31 d9a7 42b5 8364 773346b57858 59f36d29 badf 4f2d 8487 4aea68499eb8 fd7f165e a59f 43ed ac4d 308cfe11a64f ca8ae473 0844 4dd3 a49e 2725415ecdc2 6d9b5e3b d41e 4e3f 83f5 165593429068 1f92d374 a378 4af0 8bcd 1b1cc8f304c2 f45a2f5b dab6 4d18 9453 48da6e133772 bfac566e 2c9c 4326 a730 4e2ae4462bb7 09f03b95 061e 4c45 bdcb dd0cafe670db bbc4f888 fac9 4f59 90b6 defc0238cd61 fdcaaa76 6189 4257 8800 5178f738183b f1c5c63c dd64 4aea 9e56 89b504e04030 6025b3ec de28 4713 bfdb d92d17541953 05358562 ab73 4367 b650 5619e12c4038 dc2ff717 2463 432f 9096 215ad18e6671 69798681 60d6 43c2 937d 3a407caef0ec bdaafbd4 ff67 4155 b71f e683b6341edd 45767fd1 eb74 4dd3 8a93 98adc7373f11