Existing Home Sales Bounce In February But Condo Sales Slump

After two straight months of ugliness in all housing data, existing home sales in February bounced modestly, now up 1.1% year-over-year as median home prices jumped 5.9% year-over-year.

Existing home sales rose 3.0% MoM (vs +0.4% exp and -3.2% prior) to a 5.54mm SAAR.

 

Single-family home sales increased 4.2 percent last month to an annual rate of 4.96 million. Purchases of condominium and co-op units declined 6.5 percent to a 580,000 pace (down 4.9% YoY - the worst since Sept 2014)

 

However, the inventory of available properties plunged 8.1% YoY to 1.59mm,  the lowest for February in data going back to 1999.

While purchases rose 11.4%MoM in The West, The NorthEast saw a 12.3% MoM plunge in sales (blamed on weather)

“There’s no letup in home-price growth, another testament to the solid, strong housing demand in the marketplace,” Lawrence Yun, NAR’s chief economist, said in a conference call with reporters.

“If prices were weakening that may be signaling a possible turning point but we are not really seeing that.” Inventory conditions remain “very tight,” he said.

However, it's not been a pretty start to 2018 for US housing data as the Hurricane/Flood bump fades...

Comments

FireBrander bigloser Wed, 03/21/2018 - 10:23 Permalink

Local grand opening of a new apartment complex....367sq/ft @ $980 month...1050sq/ft @ "Call us" for a personal quote.

For a $980/month house payment, around here, you can get 1200sq/ft with a garage and yard in a decent area.

Needless to say, the city is "worried" about the glut of new Apartments/Condo's that are sitting empty with even more coming online this year.

Developers are stupid sheep too...they ALL figured with the "High cost of housing",  that "everyone would be wanting to rent"...idiots.

In reply to by bigloser

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In reply to by FireBrander

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In reply to by slopz38

Endgame Napoleon Disgruntled Goat Wed, 03/21/2018 - 10:52 Permalink

Maybe, it is the new crop of Millennial women who now dominate the workforce, not just at the low end, where child-bearing-aged, single-earner moms with ever-expanding amounts of unearned income from government for womb productivity take most of the low-wage and often part-time office jobs, staying below the earned-income limits for free or reduced-cost housing, free EBT groceries and refundable child tax credits (EITC) up to $6,431. 

Millennial women at the high end of the salary range almost always marry men at the same high-income level, consolidating the wealth from high-paying salaried jobs in a few households. Those assortative mates can easily afford a high-priced house in a housing market that is not inflated without sacrificing any other luxuries. Many Millennial couples a few rungs down the pay ladder from the assortative mates are on the cusp of the sex-and-reproduction years and, thus, often get downpayments from their parents to buy houses to raise their grandchildren in. This group might be bumping the numbers up, too.

Due to divorce and the tumultuous job market, this group does not always sustain their mortgages over time. I met people like this when selling insurance. Some were struggling to pay a mortgage on too-much-house after a divorce. If they had selected the less-fashionable, less-expensive house, many of them would not have needed the downpayment (in the pre-2008 days, anyway), and the person who got the house after the divorce might have been able to sustain the mortgage over time.

In the princess show-wedding era, it is interesting that we have a 62% out-of-wedlock birthdate, and many marriages do not last long due, in part, to the stress from trying to cover an unaffordable mortgage with income from the part-time / low-wage / high-turnover / temporary and 1099-gig job market. But notes on the non-trendy, smaller homes outside of major cities are less expensive than apartment rent in safe areas of cities, probably less than the monthly payment on modest condos, too, and if you get divorced, they sell quickly. There are not enough modest homes in the safe areas with less-horrible schools.

 

In reply to by Disgruntled Goat

Ink Pusher Wed, 03/21/2018 - 10:24 Permalink

Ok , I'll bite.

What's the difference between a house or a condo other than attached land?

It's ALL real estate.

Why the fuck is there any distinction being made between the two other than being able to create fancy charts that all amount to the very same continent wide hyper-inflated housing bubble that's dying to get pricked?

Endgame Napoleon Ink Pusher Wed, 03/21/2018 - 11:23 Permalink

The difference is that married couples and couples with kids often want a house. They want houses more for various reasons, including privacy. It is harder to keep a marriage afloat with the decreased privacy in many apartment / condo settings, with the Catch 22 being that it is hard to keep a marriage together when the house note is too high, creating extra stress in the marriage.  

They built a bunch of luxury condos, thinking there was a big market of single, childless Americans who could afford a luxury condo. Single, childless people are the biggest group who want condos, but most of them cannot afford it, not even close.

The job market is rigged for the womb productive, whether that is the high-paying jobs held by often frequently absentee assortative-mate parents who “need the jobs,” as it requires two six-figure jobs per household to have kids in high style, or the mom-dominated, low-paying jobs for the frequently absentee 80% of busy-working moms at the bottom.

At the bottom, we have big groups of part-time-working married moms with spousal income that covers housing, divorced moms with child support that covers housing or single moms with welfare that covers housing / groceries and refundable child-tax-credit (EITC) infusions up to $6,431 from Uncle Sam, as long as they stay below the earned-income limits for the programs.

They dominate the office jobs at workplace ratios of 98% moms to 2% single, childless workers. In the less-married country that we live in, the biggest group of potential condo buyers has one earned-only income stream and no access to womb-productivity-based unearned income from government, either. They just have the mom’s-basement housing market, like half of all American males between ages 18 and 34. Plenty of non-womb-productive women are in the same boat.

It is amazing that the condo market does as well as it does, especially since 50 million US citizens are out of the workforce, and half of all Americans work part time with average yearly earnings of $13k. Design and build a condo complex for that group; it is called Section 8 hosing or the mixed-income alternative for part-time-working single moms. http://davidstockmanscontracorner.com/the-everything-bubble-waiting-for…

 

 

In reply to by Ink Pusher

FireBrander Endgame Napoleon Wed, 03/21/2018 - 11:52 Permalink

half of all Americans work part time with average yearly earnings of $13k. Design and build a condo complex for that group

Another recently completed complex did aim at that group...it was fully rented before the doors opened...they didn't even bother with an advertising campaign...simple sign out front and "word of mouth" took care of the rest....city made it possible by selling the land for $Change and 10 years tax abatement in return for signing a contract to build "affordable" apartments for low income folks.

In reply to by Endgame Napoleon

Let it Go Wed, 03/21/2018 - 11:09 Permalink

We can thank Washington. My frustration with America's housing policy boiled over when I read a piece about how roughly 80% of new apartment construction was for the high-end luxury market. The government holds huge responsibility for a rising share of our housing problems in low-income situations because its policies avoid dealing with the growing number of tenants that are irresponsible.

Government housing cherry-picks the best of the low-income renters providing them with very low rents and nice apartments and dumps the rest on the private sector. The following piece argues the best way to address or level the playing field would be to move away from public housing and give those needing housing aid "rent only vouchers" that could be used with any landlord rather than putting these people into a quasi-government ran project.

 http://Housing Policy Feeds And Hides Growing Problems.html

everything1 Wed, 03/21/2018 - 12:19 Permalink

Condo's and apt.'s suck, and it can depend on the community, and the landlord.  I.E. when landlord tells you they need a credit check and I have to pay them $100 for it thats either a really good thing or major problems, I would always check places out by hanging out in the neighborhood and if I could inside the building I may move into.

When I purchased condo (converted to a condo), it had to be top floor with a loft, so yeah I'm sleeping in the loft.  I see some, I said some newer condo's don't play the shared floor game, they stack the floors, and put a thick wall in between the units. 

Condo's are doing fairly well because interest rates are low, it's less than a home, you can still customize your place, and maybe build equity, live like apartments with several people in the unit making it affordable, the cities love them because it's a boon for collecting property taxes, i.e. we have 72 units that take up the space 6 houses might, and they tax us the same, so that's about a 150,000 in revenue vs. maybe 15,000.