Pending Home Sales Decline For 4th Straight Month, Weather Blamed

Pending Home Sales rose just 0.4% MoM (missing expectations of 0.7% MoM) and saw prior months revised notably lower (Feb down from +3.1% to +2.8%).

Weather remains the 'go to' blame factor from realtors as the regional differences suggest...

  • Northeast fell 5.6%; Feb. rose 10.3%
  • Midwest up 2.4%; Feb. rose 0.7%
  • South up 2.5%; Feb. rose 2.9%
  • West fell 1.1%; Feb. fell 0.7%

Unadjusted pending home sales dropped 4.4% YoY (the 4th straight month of declines - the longest streak since 2014)...

 

“Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory,” Lawrence Yun, NAR’s chief economist, said in a statement.

“Prospective buyers are increasingly having difficulty finding an affordable home to buy.”

“It is an absolute necessity for there to be a large increase in new and existing homes available for sale in coming months to moderate home price growth,” he said.

“Otherwise, sales will remain stuck in this holding pattern and a growing share of would-be buyers -- especially first-time buyers -- will be left on the sidelines.”

Purchases dropped 5.6 percent in the Northeast, reflecting multiple winter storms...

"As anticipated, the multiple winter storms and unseasonably cold weather contributed to the decrease in contract signings in the Northeast."

As a reminder, economists consider pending sales a leading indicator because they track contract signings.

Comments

FireBrander Mon, 04/30/2018 - 10:17 Permalink

The sweet spot around here is $160K to $360k.

Below $160k and you're in MLK's Dream turned Nightmare territory.

Above $360k and the bankers just can't hand out the money no matter how hard they "massage" the borrowers income.

$1,000,000 plus homes...I've seen the same homes, year after year, on the front page of the papers real-estate section, home page of real-estate websites, and "featured" on home shows on weekend TV...no sale.

GunnerySgtHartman FireBrander Mon, 04/30/2018 - 10:41 Permalink

In my area, the sweet spot is $100k to $150k (I'm in a fairly rural area).  Houses in that range sell within days, sometimes 24 hours or less.  The lower you go under $100k, the more work the houses need - and a lot of people are too lazy to buy cheap and build equity these days ...

$150k-$200k and you begin to have problems with people being able to afford them, regardless of the loan rate or term.

Over $200k, sellers think they don't have to budge on prices, in part because of the garbage fed to them by real-estate agents - or the buyers want something that is absolutely perfect and needs nothing done to it.  I do know one woman who listed her house at $260K and watched it sit for over a year with no serious offers.  She eventually sold it for $220K, much to the displeasure of the real-estate agent (ha ha!), but she'd already bought another house and wanted out.

In reply to by FireBrander

HungryPorkChop GunnerySgtHartman Mon, 04/30/2018 - 11:49 Permalink

Where I'm at in Colorado the outsiders have overrun with their cash.  What used to be a small quiet town with affordable $200,000 and $300,000 housing is gone.  Lots of traffic and starter homes are $325,000 for a cracker box with a postage sized lot unless you're buying a dump.  Reasonable 3 or 4 bedroom homes with a garage and good school district are quickly at $375,000 to $550,000 range.  Want something nice with custom upgrades, well those are $600,000 to $900,000.   Want a McMansion on a large lot and killer view then be ready for that $1.0 to $1.5+ million price tag.

In contrast, Boulder CO the average home price is now just north of $1.0 million.  Not sure who keeps pushing up those home price but its not many locals where teachers are beginning to strike due to pay.  The average teacher salary is $46,155 according to teacher portal.  It would take about 6 to 8 teacher salaries to afford a home in Boulder and be able to keep food on the table.  Go figure!  LOL..

In reply to by GunnerySgtHartman

Endgame Napoleon Osmium Mon, 04/30/2018 - 10:34 Permalink

Do not blame the 62% out-of-wedlock birthrate or part-time jobs that keep the single and womb-productive under the earned-income limits for welfare-hoisted monthly bills, like free food and reduced-cost rent, in addition to refundable EITC child tax credits up to $6,431.

Do not blame part-time jobs that do not pay the non-womb-productive and non-welfare-eligible, single workers enough to rent an apartment, much less to buy a house. 

In particular for this market, do not blame assortative mating, which keeps two of the few decent-paying jobs with benefits under one roof, as employers accommodate the dual-earner parents to the max with excused absenteeism, even though this trend halved the size of the college-educated middle class.

In reply to by Osmium

Honest Sam Mon, 04/30/2018 - 10:27 Permalink

Maybe, but middle class housing prices have peaked. Or the MC has maxed out what it can afford for Mtg, taxes, insurance, and upkeep, even after nearly all their income is spent on housing.

Unless the builders get more reasonable in the profits they expect from building these shitty Stick homes, and condos, with $100,000 worth of parts and labor and jacking up the sales price to $400,000 or more, they will be sitting on them for a long time.

The price for homes is insane, even outside of Silicon Valley and the fetid swamp of D.C. its kin in San Francisco, and SoCAl.

 

FireBrander Honest Sam Mon, 04/30/2018 - 10:46 Permalink

Around here, $100,000 will buy you the lot in new neighborhoods.

$100k = the lot.
$90k = 1600sqft home construction materials.
$20k = Foundation and utilities work.

Now add it labor costs, which have risen due to illegals moving to sanctuary states, and nothing can be built around here for less than a cost of $240k which is why Realtors have a waiting list of people wanting to buy sub $240k existing homes in good neighborhoods.

In reply to by Honest Sam

Endgame Napoleon Honest Sam Mon, 04/30/2018 - 10:47 Permalink

Those builders must be paying the 98 to 100% illegal alien work crews more than their wives / girlfriends present evidence of when applying for free EBT food at the Department of Human Services for multiple US-born kids.

They qualify for more in just free food more than I made in a week working there as a college grad, not counting their other monthly womb-productivity-based benefits and refundable EITC child tax credits up to $6,431.

With all of that cheap and welfare-boosted immigrant labor, and with so many materials coming from countries with even lower priced labor, developers still cannot make a profit building affordable housing.

Perhaps, the issue is really the cost of land in the few safe, middle-class areas left in America. Working families have never been paid so much by government to have sex and reproduce—both the citizens and the noncitizens in single-earner households—but they have produced the biggest generation of prisoners in American history.

America now has 5% of the world’s population and 25% of its prisoners. It is one reason why Millennials (and others) camp out in mom’s basement for so long. Many young people do not want to chain themselves to debt to live in an unsafe area; they do not see the value in the investment.

In reply to by Honest Sam

GunnerySgtHartman Honest Sam Mon, 04/30/2018 - 10:51 Permalink

Unless the builders get more reasonable in the profits they expect from building these shitty Stick homes, and condos

And these city councils/building commissions stop writing building codes that explicitly ban modular homes from the city limits at the behest of the contractors.  Contractors HATE modulars because they are built just as well, and in many cases better, than stick-built AND modulars are cheaper, so they get cities to ban modulars.

In reply to by Honest Sam

Endgame Napoleon Dogman57 Mon, 04/30/2018 - 10:51 Permalink

They could blame it on pushy realtors, working on straight commission with no benefits and twice-as-high SS taxes due to self-employment, incurring a bunch of expenses for the privilege, with only the agency owner making much for the effort.

Or...they could blame it on the hourly employee, the frequently absentee momma at the front desk. No, womb productivity, unearned income from a spouse, an ex spouse or welfare and the progressive tax code, puts her above critique.

In reply to by Dogman57

MuffDiver69 Mon, 04/30/2018 - 10:50 Permalink

Certainly has been weird weather in mid-Atlantic and north...The new homes issue will be with us for good...just try building in some states these days...certainly has driven existing home prices thru the roof...I can’t complain..you could knock 20% of the value here and I’m swimming...

hardmedicine Mon, 04/30/2018 - 10:53 Permalink

come to think of it i'm really depressed too.................... not just the economy ..... it's like 10 fucking years since we bailed out the POS banksters....... and the economy is NOT BETTER.  I'M PISSED OFF ABOUT THE FED AND THE BANKS.  I'm going to liquidate my bank account and buy gold.  that barbarous relic is all i trust.  

MopWater Mon, 04/30/2018 - 10:55 Permalink

Live in a rural town, very tight market, at most will have 5-7 houses for sale. In between two larger towns/cities so its a bedroom community that's safe (read 99% white). Houses listed early March in my area have all sold. Anything after that initial rush is sitting.

 

Commerical property is becoming more and more available in big town nearby. Mall lost 2 of 6 anchor stores now, with 2 more clinging to life (JCP and B&N). Mall is around 30% vacant I'd say.

GooseShtepping Moron Mon, 04/30/2018 - 10:57 Permalink

Despite the volatility, the long term chart seems to be drifting pretty steadily from the upper left to the lower right, which exactly mirrors other fundamental metrics such as working age population and full time employment. The slow, glacial, demographic grind continues apace, producing the inevitable outcome. Demographics is everything. All else is just noise. 

https://econimica.blogspot.com/

Listen to Chris Hamilton of the Econimica blog. This guy gets it.

Ink Pusher Mon, 04/30/2018 - 11:42 Permalink

LMFAO, blaming it on the weather?

I am sure the majority of those in possession of an IQ below 70 or the completely gullible will believe that line of absolute bullshit.

 

 

 

 

CrytpoFTW Mon, 04/30/2018 - 11:51 Permalink

I'm in Dallas, Texas, and the market is hot as hell.  Nothing is available under 185K, and above that to 250 you get crazy demand.  In fact, by the time you put your house on the market you will have a half a dozen offers.  I am trying to figure out what the fuck to do with my house as I am going through a divorce.  Good times!

snblitz Mon, 04/30/2018 - 14:21 Permalink

unseasonably cold weather contributed to the decrease in contract signings

The author has identified another benefit of global warming:

Come on folks! Let goose the housing market! Just produce more CO2!

brown_hornet Mon, 04/30/2018 - 14:55 Permalink

Just sold parent's house 20 mi. W of Chiraq. In a good area (not great) but got $2600 over asking price in 1 day. Lots of house for the money. Just needs kitchen update. Dad bought it in 1948 for $10,000, added 3 beds and another bath for $8500 in 1959. Sold $242,500.