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Listed House Sale Closings Rose 74,000 in March, Prices up 5% in Month, 2.5% in Year

ilene's picture





 

Listed House Sale Closings Rose 74,000 in March, Prices up 5% in Month, 2.5% in Year

Courtesy of Lee Adler of the Wall Street Examiner

The National Association of Realtors (NAR) reported on Thursday that their members settled 361,000 house sales in March (actual, not seasonally manipulated), up 74,000 from February. The median price rose 5.27% versus February and was up 2.5% versus March 2011. This was the largest monthly percentage price gain since June 2005. The year over year gain was the first significant year over year increase, not influenced by government giveaways, since 2006.

The sales volume gains continue to track reported gains in sales contracts 2 months after the contracts. This is consistent with a typical average 60 day period between contract and settlement. March closed sales were 7.7% less than January contracts. This is an improvement over February when the difference was 10% and a strong improvement over January when it was a record 36%. The average drop rate for the previous year was 12%. This rate was less than 6% until 2008. Assuming a drop rate in April that is similar to this March’s, closed sales in April will be around 420,000 which would continue a trend of slow improvement since the 2009 lows.

The March increase was below average for the month. March sales were up by 94,000 in 2011 and 108,000 in 2010, a number which was skewed by government programs. The average March gain for the past 5 years has been 94,000. Based on a big jump in contracts in February, April closed sales should show stronger improvement when the data is released next month.

Total listings in March stood at 2,370,000, a decline of 30,000 since February. Normally, listing inventories increase slightly in March. But listing inventory is at its lowest level in 5 years. The February inventory to contracts ratio of 5.3 indicated a tighter market than at any time since 2006. Low absolute price levels are causing would be sellers to withhold inventory because they are unable or unwilling to sell at current levels. The market has reached an uneasy equilibrium at low levels of demand, supply, and price. Contrary to conventional wisdom, shadow inventory is not a threat in most areas of the US because it is either in non competitive locations, or is becoming physically depreciated to the point that it is no longer competitive with existing homes in good condition.

 

House Sales and Inventory Chart- Click to enlarge

House Sales and Inventory Chart- Click to enlarge

 

Closed sale price increases are tracking real time listing prices, as is the norm. Sellers are not wild eyed maniacs hoping for the best. They know the situation and have their ear to the ground via their agents. Current listings prices have proven to be a good indicator of the direction of the price trend.

The median closed sale price of $163,800 in March was up 5.27% from the February median, and 2.5% from March 2011. This represents contracts that were mostly entered in January, the month which marked the low for US median listing prices reported by Housingtracker.net. Current listing prices as of April 16 are up 5.4% since then, but just 3.1% year over year.

 

House Sales Chart- Click to enlarge

House Sales Chart- Click to enlarge

 

Whether the market is truly in recovery, or just lying dead in the water, can’t be confirmed one way or the other until the data becomes available for June, the usual peak month for prices and contract volume. That data will be available in mid August. The homebuilder’s survey data, which is a little more timely, could give a heads up. For a more in depth look at all the key housing indicators see the current Wall Street Examiner Professional Edition Housing Market Update.

Get regular updates the machinations of the Fed, Treasury, Primary Dealers and foreign central banks in the US market, in the Fed Report in the Professional Edition, Money Liquidity, and Real Estate Package. Click this link to try WSE’s Professional Edition risk free for 30 days!

© Copyright 2012, The Wall Street Examiner Company Inc. All rights reserved.

 


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Sat, 04/21/2012 - 21:10 | Link to Comment anynonmous
anynonmous's picture

for the housing bears this from the best blog on housing

http://www.calculatedriskblog.com/2012/04/residential-investment-and-hou...

 

(I disagree and believe that when the foreclosure engine ramps up there will be another leg down, but CR has lots and lots of credibility)

Sat, 04/21/2012 - 02:24 | Link to Comment Azwethinkweiz
Azwethinkweiz's picture

Ilene, dear, have you met Mr. Robert Brusca? You two would have the most beautiful, optimistic children. If you both ever meet, become intimate and conceive, may I suggest naming your first two children Rainbow and Sunshine?

Fri, 04/20/2012 - 23:31 | Link to Comment mathdock
mathdock's picture

To Kayman:  I read Lee's stuff pretty regularly, and so what he is providing you are the non-seasonally-adjusted numbers.  NAR's stated (and inflated) numbers were seasonally adjusted by assumptions that their chief number cruncher finally stepped up to the plate and 'fessed up about, revising the adjustments downward (with errors compounding over time, since the adjustments had carried a directional bias). 

Lee is NOT using the baked numbers, but rather the actual closes reported by NAR agents as they always have.  They represent a large fraction of all listed sales. Since they are unbaked, they will be as close to reality as we can expect, and so the pictures derived from unbaked data will be truer as well.

You can appreciate the value of these and his BLS charts reporting ACTUAL unemployment claims, as these are unfiltered data. They produce wavy charts (as no seasonal adjustments are applied), and the straight lines connect same month/same week of the year for visual comparison.  But he has explained his own work better than I can here.  Since I teach stats for part of my living, I can tell you that these representations are much more helpful for teaching stats and statistical inference better than any smoothed chart ever will.

 

Lee, the only thing I would suggest to help audiences with the lines would be to put a dot about twice the line width AT the corresponding prior yearly entries for the current month.

Regards,

Sat, 04/21/2012 - 13:35 | Link to Comment Kayman
Kayman's picture

mathdock

Thanks for the info.  My take on statistics always begins with who is the source, how is the information gathered, and does the statistician have a dog in the fight.

Numbers can always be massaged. Having said that, the theme here at ZH falls back to "where are the jobs ? "  Are they government jobs or livable, middle class PRIVATE SECTOR jobs ?

I earn part of my living from housing.  Housing is a decade or a generation away from recovery. We will be bouncing along the bottom for some time yet. IMHO

My question to you is: what is the non-seasonally adjusted delta, February to March over the past 30 years.  Without that info for comparison, all that Lee Adler is providing, is more blather. 

 

Sat, 04/21/2012 - 15:09 | Link to Comment Lee Adler- The ...
Lee Adler- The Wall Street Examiner's picture

Read it again Kayman. "The March increase was below average for the month. March sales were up by 94,000 in 2011 and 108,000 in 2010, a number which was skewed by government programs. The average March gain for the past 5 years has been 94,000. "

The problem with many commenters on this site is that they spew before they read. Read the article first. Then if you want to spew, at least you'll be spewing on the basis of what's there. 

My job is to present the facts. There's too much misinformation out there. So let's get to the bottom of what the facts are, and then we can make intelligent decisions. So, like I said, "Whether the market is truly in recovery, or just lying dead in the water, can’t be confirmed one way or the other until the data becomes available for June, the usual peak month for prices and contract volume. That data will be available in mid August. "  

Sat, 04/21/2012 - 19:25 | Link to Comment Kayman
Kayman's picture

Lee

1. "Don't believe the negative housing hype.'

2. "Whether the market is... just lying dead in the water"

When you are "just presenting the facts" while "ilene" presents the hyperbole, it is hard to separate the wheat from the chaff.

At the end of your analysis you are saying we should wait for the verdict; and so we should.

I saw nothing in the article that negates a healthy skepticism about housing.

Nevertheless, thanks for the article.

 

Fri, 04/20/2012 - 22:48 | Link to Comment Boxed Merlot
Boxed Merlot's picture

 Contrary to conventional wisdom, shadow inventory is not a threat in most areas of the US because it is either in non competitive locations, or is becoming physically depreciated to the point that it is no longer competitive with existing homes in good condition...

 

Wasn't it the NAR that promoted the conventional wisdom that buying a home was the best investment a person could make because real estate always goes up? 

Now they say shadow inventory is not a threat because some nimrod built a house where it shouldn't have been built and nobody wants to live there anyway because it's all run down.     Huh?

This is some of the most convoluted reasoning I've seen outside my own writings in quite some time.

Fri, 04/20/2012 - 21:30 | Link to Comment Kayman
Kayman's picture

Absolutely fucking incredible !  The NAR reports that March sales have increased over February sales. Wow, let me write that down. Sales are increasing as winter gives way to spring. Unbelievable.

Tell me again, Lee, the NAR recently told us they "miscounted" house sales for how many years ?

 

Fri, 04/20/2012 - 21:24 | Link to Comment max2205
max2205's picture

BS

Fri, 04/20/2012 - 20:46 | Link to Comment anynonmous
anynonmous's picture

Dear ilene:

Articles that have the words/acronyms 'NAR' and/or 'YUN' redacted have much more cred.

Best,

a

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