NAR Warns Upper-End Home Prices Set To Slide

Following the plunge in New- and Existing-Home Sales, expectations for a 0.5% acceleration in Pending Home Sales in December were met.

 

However, YoY, Pending Home Sales NSA dropped 1.8%.

 

The Northeast dominated the weakness (after a big jump in Nov):

  • Northeast fell 5.1%; Nov. rose 4.1%
  • Midwest fell 0.3%; Nov. fell 0.1%
  • South up 2.6%; Nov. rose 0.1%
  • West up 1.5%; Nov. fell 2%

 

Since the start of the year, Housing-related data has disappointed notably, after ramping remarkably since the storms...

Lawrence Yun, NAR chief economist, says pending sales edged up in December and reached their highest level since last March (111.3).

"Another month of modest increases in contract activity is evidence that the housing market has a small trace of momentum at the start of 2018," he said. "Jobs are plentiful, wages are finally climbing and the prospect of higher mortgage rates are perhaps encouraging more aspiring buyers to begin their search now."

Added Yun,

"Sadly, these positive indicators may not lead to a stronger sales pace. Buyers throughout the country continue to be hamstrung by record low supply levels that are pushing up prices — especially at the lower end of the market." oops "In the short term, the larger paychecks most households will see from the tax cuts may give prospective buyers the ability to save for a larger down payment this year, and the healthy labor economy and job market will continue to boost demand," said Yun.

"However, there's no doubt the nation's most expensive markets with high property taxes are going to be adversely impacted by the tax law."

However, Yun ended on an oominous note...

"Just how severe is still uncertain, but with homeownership now less incentivized in the tax code, sellers in the upper end of the market may have to adjust their price expectations if they want to trade down or move to less expensive areas. This could in turn lead to both a decrease in sales and home values."

Comments

JRobby Looney Wed, 01/31/2018 - 10:21 Permalink

You can't sell and downsize. Keep paying your taxes. The mill-levy will be adjusted to keep the money flowing to pay the salaries and never ending benefits of your 6 figure wonders that leach off of your tax $$$$.

In reply to by Looney

everything1 Wed, 01/31/2018 - 11:12 Permalink

I re-bought during that last red glob back in summer of 2014. I would like to re-sell now and wait but I'm tired of moving, still I refi'd back in the trench of summer 2016 at 2.625%.  I see others bought strongly into this slow rate decrease.  Which ended mid 2016 when rates jumped.  I see quite a bit of construction, condo's, apt.'s, less homes I still see moderation in RE going forward.  IF we get three rate hikes this year then I am seeing a pullback in even construction spending, but if rents are still high they'll just build those instead of condo's and homes.

 

 

 

Muppet Wed, 01/31/2018 - 11:25 Permalink

"Lawrence Yun, NAR chief economist, says...".   More accurate is "makes up" or "fabricates".  The NAR has been proven and has admitted it fakes its reports.

 
Yun is the illustration in the dictionary for "fake news". 

MusicIsYou Wed, 01/31/2018 - 11:54 Permalink

Of course the prices of mansions are going to slide. It used to be a long time ago that owning a mansion meant more privacy but not anymore. Since we don't have privacy from snooping government and corporations, may as well live in a small house. Why would anybody pay more money for more square footage to be snooped? The stupid fcking government just has no idea how many things are going to die off because of them. Elites and government want to be God, thus they're going to suffer like God, government is on God's land now, and eventually government will know why it is there's silence from God when people pray. In that getting in people's minds is a sure way to undo society.

everything1 Wed, 01/31/2018 - 14:10 Permalink

I've already met a few people trying to sell their mcMansions out in the middle of nowhere often with land for all kinds of money, buyers are sporadic for that kind of thing these days.  As soon as rates get up around 4% the crowd seems to start to leave the room.  But, when recession falls upon us and the city life gets kind of crappy and crime like, then the out in the sticks places get popular for awhile again.