Sales of existing homes plunge in May, but Realtors think it was down

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Sales of existing homes plummeted in May, the coronavirus continued to hammer the economy, but estate agents expect to represent the bottom.Sales of existing homes in May fell 9.7% from April to an seasonally adjusted annual rate of 3.91 million units, according to the National Association of Real Estate Agents. Sales were down 26.6% per year. This is the largest annual decline since 1982, when interest rates were around 18%. It was also the slowest pace in sales since October 2010.

These figures are based on sales, representing the contracts signed in March and April. Given that the past few months have been the worst in the economy of stopping the coronavirus, it is not surprising that the volume has come in so low.

“Well, in the month of June, I think people are much more comfortable, knowing that there is a huge economic recovery plan,” said Lawrence Yun, chief economist for real estate agents. “I am very confident that this will be the cyclical low point. The buyers are back and the lists are back. ”

The meager supply of homes for sale didn’t help either, because not only would potential sellers decide to wait, but some already on the market have withdrawn their ads. Nationwide inventories decreased 18.8% from May 2019. At current rates of sales, it would take 4.8 months to exhaust stocks. The offer was lower in all price points.

Tight supply keeps pressure on home prices. The median price of a house sold in May was $ 284,600. This is a 2.3% increase from May 2019 and the smallest annual increase since February 2012 when the market started to recover from the Great Recession. It may be due, in part, to a change in the sales mix. Low-priced homes sold at a much faster pace, while sales were down in the high-end market.

“There is evidence that buyers are coming back in large numbers in May,” said Danielle Hale, chief economist for realtor.com. “However, these buyers today face a challenge familiar – not enough homes for sale. Fortunately, shifting preferences and behaviors that favor the suburbs can better allow builders to build and buyers to find what they are looking for. ”

Nationwide, builders seem to be taking advantage of the lack of existing homes for sale. An index measuring builder sentiment jumped in June, returning to positive territory after falling in April, according to the National Association of Home Builders.

Manufacturers have seen increases in sales and buyer traffic, although some of this traffic is online and virtual.

There continues to be a great divergence between individual houses and condominium apartments. Single-family home sales fell 9.4% month-over-month, while condo sales were down 12.8%.

Regionally, sales of existing homes in the Northeast decreased by 13% for the month and 29.9% year-on-year. The median price in the Northeast was $ 327,900, up 7.8% from May 2019.

Sales fell 10% in the Midwest, down 20.2% year on year. The median price in the Midwest was $ 227,400, a 3% increase from May 2019.

Sales in the South fell 8% for the month and 25.1%, compared to the same period the previous year. The median price in the Southeast is $ 247,400, an increase of 2.1% over one year.

Sales in western Canada fell 11.1% month over month and 35.1% annually. The median price in the West – $ 408,400, down 0.2% from May 2019.

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