Existing Home Sales Drop To Lowest Since July 2012; All-Cash Buyers, Investors Are 50% Of March Transactions

Tyler Durden's picture


Another month, another drop in existing home sales, which in March declined once again from 4.60MM units to 4.59MM. While the good news was that this number did beat the consensus estimate of 4.56MM (based on a a range of 4.50MM to 4.85MM from 75 economist surveyed), the bad news was that once again, a near majority of the upside was once again due to investors and other all-cash buyers, who accounted for 50% of all sales. That and that like last time, of course, this was the worst existing home sales number since July 2012.

Some of the other data highlights:

  • Existing-home sales fell 0.2% after falling 0.4% prior month
  • 5.2 months supply in March vs. 5.0 in Feb.
  • Inventory rose 4.7% to 1.99m homes
  • 1st-time buyers 30% of total sales; all cash 33%; investors 17%
  • Distressed sales 14% of total sales; of which foreclosures 10%; short sales 4%
  • Median home price rose 7.9% from last year to $198,500

Everyone's favorite NAR talking head Larry Yun had this to say:

Lawrence Yun, NAR chief economist, said that current sales activity is underperforming by historical standards. “There really should be stronger levels of home sales given our population growth,” he said. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”


Yun expects some improvement in the months ahead. “With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly.”

But only if it doesn't snow, or rain, and certainly not if it is windy or the sun is shining just the wrong shade of strong.  Remember in an artificial, centrally-planned economy represented by a rigged market, the phrase priced to perfection takes on a whole new meaning.

Some more details from the report:

All-cash sales comprised 33 percent of transactions in March, compared with 35 percent in February and 30 percent in March 2013. Individual investors, who account for many cash sales, purchased 17 percent of homes in March, down from 21 percent in February and 19 percent in March 2013. Seventy-one percent of investors paid cash in March.


Single-family home sales were unchanged at a seasonally adjusted annual rate of 4.04 million in March, the same as February, but are 7.3 percent below the 4.36 million pace a year ago. The median existing single-family home price was $198,200 in March, which is 7.4 percent above March 2013.


Existing condominium and co-op sales declined 1.8 percent to an annual rate of 550,000 units in March from 560,000 in February, and are 8.3 percent below the 600,000 level in March 2013. The median existing condo price was $200,800 in March, up 11.6 percent from a year ago.


Regionally, existing-home sales in the Northeast rose 9.1 percent to an annual rate of 600,000 in March, but are 4.8 percent below March 2013. The median price in the Northeast was $244,700, up 3.2 percent from a year ago.


Existing-home sales in the Midwest rose 4.0 percent in March to a pace of 1.04 million, but are 10.3 percent below a year ago. The median price in the Midwest was $149,600, which is 5.9 percent above March 2013.


In the South, existing-home sales declined 3.0 percent to an annual level of 1.92 million in March, and also are 3.0 percent below March 2013. The median price in the South was $173,000, up 6.7 percent from a year ago.


Existing-home sales in the West fell 3.7 percent to a pace of 1.03 million in March, and are 13.4 percent below a year ago. The median price in the West was $289,300, which is 12.6 percent higher than March 2013.

Finally, remember that all of the above is largely BS - the NAR is, as the name implies, an association of realtors, and as such it is in their best interest to perpetually skew the picture as far rosier than it is, just so prospective buyers aren't spooked by the reality behind the crumbling fake facade.

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Tue, 04/22/2014 - 10:35 | 4682526 larz
larz's picture

Amerika had been highjacked import the pissed off Chinamen

Tue, 04/22/2014 - 10:52 | 4682581 john39
john39's picture

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

Thomas Jefferson, (Attributed) 3rd president of US (1743 - 1826)

Tue, 04/22/2014 - 10:36 | 4682530 Max Damage
Max Damage's picture

Is the FED buying all the houses aswell now? Well they own all the feckin mortgages so why not double up and buy the houses all over again!!!!

Tue, 04/22/2014 - 10:38 | 4682535 NoDebt
NoDebt's picture

Don't give them any more bad ideas.  They have plenty of their own already.

Tue, 04/22/2014 - 10:42 | 4682545 SWCroaker
SWCroaker's picture

Yes, indirectly.   They print, much of the bux go overseas, it then flits from country to country (causing inflation, instability), and when it gets in the hands of a nervous rich cat who views US housing as a sounder investment than tenements in Timbuktu, they come here and buy houses, for cash.   The real estate industry doesn't vet the source of the money so much, on "cash" purchases", dontcha know...

Tue, 04/22/2014 - 11:21 | 4682667 Ignorance is bliss
Ignorance is bliss's picture

Could be narco money. Housing is one of those assets exempt from money laundering regulations. Gotta wash that cash before marihuana becomes legal.

Tue, 04/22/2014 - 11:25 | 4682682 SWCroaker
SWCroaker's picture

Certainly seems to be the case in south Florida, in Dade & Broward counties.  I don't think even the bankers can afford to rub elbows with that crowd.  

Tue, 04/22/2014 - 11:35 | 4682723 Ignorance is bliss
Ignorance is bliss's picture

I use to live in S.Florida. Started thinking about the effects of a plunging economy when the SHTF. Thought it might better to leave before that happened. It won't be pretty.

Tue, 04/22/2014 - 10:44 | 4682550 TheReplacement
TheReplacement's picture

Are you suggesting that they would issue themselves credit from heaven in order to buy up the country then forgive their debts to themselves?  That's crazy.  They won't forgive the debt.  They will make us all pay it back.

See how that works?  They create from thin air the means to loan themselves whatever they need to buy real things and then make the taxpayers pay them back for the loans they conjured up.  Oh, and they take transaction fees to and fro as well.


Tue, 04/22/2014 - 11:03 | 4682612 disabledvet
disabledvet's picture

that's just to clean up the balance sheet. "buying the country" costs money so we'll leave that to the Government folks...for a fee of course.

Although at this point we might need a hearing. Counterfeiting used to be illegal in America.

Tue, 04/22/2014 - 11:29 | 4682706 SWCroaker
SWCroaker's picture

Physics says we can never pay back the debt (give them every dollar in existence, and we would still owe them yet even more in interest).  So unless they are simplistically insane, they're not in it for the money.   Since they hold sole possession of a goose that lays (fiat) eggs, it doesn't make sense for them to be in it to collect interest.

May I suggest power as a motive that ranks above simple wealth?

Tue, 04/22/2014 - 10:45 | 4682554 just-my-opinion
just-my-opinion's picture

I have seen NICE houses that people with jobs had and the GOV paid for most of the rent...SEC 8


Tue, 04/22/2014 - 10:36 | 4682531 pods
pods's picture

Wow, who would think that in a depression that things would get bad?


Tue, 04/22/2014 - 10:39 | 4682539 just-my-opinion
just-my-opinion's picture

What depression....rich people have money...8^)


Tue, 04/22/2014 - 10:37 | 4682534 NoDebt
NoDebt's picture

I've fallen and I can't get up! TM

Tue, 04/22/2014 - 10:38 | 4682536 Grande Tetons
Grande Tetons's picture

The search for rental income in a zirp world leads to this sort of stupidity. 

Tue, 04/22/2014 - 10:43 | 4682537 PlusTic
PlusTic's picture

but it beat the fake exp. so buy the fukk outa everything...we are in desparate need of an acute case of anarcho-capitalism

Tue, 04/22/2014 - 10:44 | 4682549 Seasmoke
Seasmoke's picture

Eventually you will wake up homeless. 

Tue, 04/22/2014 - 10:44 | 4682552 LawsofPhysics
LawsofPhysics's picture

Good for local municipalities...

all those dollars coming back from foreign accounts/reserves...

good thing that there is no inflation, otherwise this might get messy for the 'merican political class...


tick tock motherfuckers...

Tue, 04/22/2014 - 10:47 | 4682559 FieldingMellish
FieldingMellish's picture

The recovery continues at a blistering pace.

Tue, 04/22/2014 - 11:06 | 4682620 JailBank
JailBank's picture

I feel totally recovered. I had to spend Easter with the in laws so it took all of Monday to recover from my secret hangover.

Tue, 04/22/2014 - 10:50 | 4682573 youngman
youngman's picture

Bad if you are a mortgage broker...must be a lot of talk by the water cooler....not much else going on...so how are the Broncos going to do this year????


Tue, 04/22/2014 - 10:54 | 4682584 Winston Churchill
Winston Churchill's picture

Half the zillow emails I get are showing price reductions now.
some -10 to 15% from the original.

Tue, 04/22/2014 - 14:07 | 4683441 greatbeard
greatbeard's picture

>> Half the zillow emails I get are showing price reductions now.

I'm a West Florida RE person.  Stuff is flying off the shelf.  I put my place on the market, with a decent profit, and in 30 days I had two full price offers.  I realized just how much the market had exploded price wise in time to pull mine from the market. My buyers don't want to give up.  I bought the place 1.5 years ago for $58K, the bottomof the market as it turns out.  I put $30K in it.  I put it on the market for $125K.  One of my potential buyers raised his bid to $140K, then $145K.  I accepted the $145K then he got a bit pissy and reduced his offer to $140K.  I said not intrested and jerked the deal again.  He's increased his offer to $150K now.  I'd love to take it as, at my economic position, $60K profit, plus a free place to live for 1.5 years is something I should take.  The prolem is, everything I was considering as a replacement has gone through the roof also.  I'd rather sell my place for $50K and buy the replacement for $50K.  Inflated prices only help the tax man, the insurance man and the bankers. 

Tue, 04/22/2014 - 14:53 | 4683683 mumbo_jumbo
mumbo_jumbo's picture

"the bottom of the market as it turns out"


that's making a bit of assumption right there, cause not much has changed since 2008 in terms of a normal RE market.

my bet is that isn't the bottom especially in Florida which is packed with old people, not the oldest state but up there.

Tue, 04/22/2014 - 15:23 | 4683814 greatbeard
greatbeard's picture

>> that's making a bit of assumption right there,

So far, it was the bottom.  None of us can tell the future.  In most of the locals I shop the market is up a sold 50% from the bottom, if not more.  I dont rack it up to any great billiance on my part, I simply buy/sell a property every 1.5 to 2 years.  I missed the "top" of the previous bubble on my primary residence to the tune of $150K.  Win some/lose some.

I personally see the RE market as like the S&P.  The PTB are going to pump it up until everything crashes.  They have no choice.  People will be calling the top of real estate for years to come.

Tue, 04/22/2014 - 10:59 | 4682604 disabledvet
disabledvet's picture

all existing housing stock is worth ZERO.

the only proxy for Housing is NEW HOUSING...not "existing" (though it's always good to know that houses actually do exist. We're gonna need the firewood come winter!)

So the current "recovery" remains "housing starts" which means nothing more than a driveway in Florida...probably put in by the town Government no less as part of their "drainage conveyance strategy."

It is "something." But still not a house...unless you have a really big car of course. With quality AC and Heat of course. Might have to hook up to a sewer line for it to be considered an insurable risk however.

Tue, 04/22/2014 - 12:51 | 4683049 max2205
max2205's picture

Ah come on....buy a house. Pay property taxes so your teachers can get a raise and retire at 40 with full pay and medical. ..


You know it's all about the kids.....



Tue, 04/22/2014 - 11:01 | 4682607 q99x2
q99x2's picture

Bring out the "Neck" Shiller and have him dribble some words on the subject.

Tue, 04/22/2014 - 11:03 | 4682611 John Law Lives
John Law Lives's picture

"There really should be stronger levels of home sales given our population growth,...”

Here you have a primary reason behind the push for amnesty for illegals (and the ensuing new wave of immigrants that would surely follow) and more H-1B Visas.  Corporations (who own both parties) believe more people = more demand for goods and services.  They also want cheap labor.

Tue, 04/22/2014 - 11:18 | 4682655 j0nx
j0nx's picture

Sheeit. In NoVa area shit is nuts still. Anything priced within neighborhood comps sells in days.

Tue, 04/22/2014 - 15:05 | 4683744 falconflight
falconflight's picture

Do you understand why?

Tue, 04/22/2014 - 11:29 | 4682705 Ignorance is bliss
Ignorance is bliss's picture

If the government raises the specter of inflation in houses then the fence sitters might jump in before inflation really gets going. I see it a little different. As inflation hits food, health insurance, and energy then there will be less income left over for a house. The cash buyers represent hot money. Hot today plunging prices tomorrow. The thing is houses usually represent the greater part of the average Americans wealth. Too bad the banks and Uncle feel the need to fuck America so hard.

Tue, 04/22/2014 - 12:56 | 4683068 Professor Fate
Professor Fate's picture

And mind you, home prices today reflect the fact we are still at near record low mortgage rates.  The discretionary income of potrential home buyers is under attack from inflation, Obamacare, higher state and city taxes, and fewer work hours for many.  There is no shining light for home prices once the cash-buyer hedgies take their hit on this rent-to-own bullshit.  Consumers are maxed out and most are just one broken radiator hose away from insolvency.

Professor Fate
"Push the Button, Max" 

Tue, 04/22/2014 - 12:03 | 4682732 U4 eee aaa
U4 eee aaa's picture

Goldman upgrades gold stocks moved to this article


Tue, 04/22/2014 - 12:18 | 4682903 Tortfeasor
Tortfeasor's picture

Every realtor I talk to is telling this same story:

Fannie and Freddie are destroying short sales because they are demanding highly inflated prices. Like 50% over comps. One buyer even paid for his own private appraisal. No sale. Something rotten in Fannie-mark. 

Tue, 04/22/2014 - 14:37 | 4683584 bobcromwell
bobcromwell's picture

Doomers are mostly bitter renters who invest in gold at $1800 and short the stock market for the last 5 years.

Tue, 04/22/2014 - 14:45 | 4683627 mumbo_jumbo
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