All-Cash sales plunge 22% as investors don’t feel like overpaying either. The 2023 version of spring selling season is here.
By Wolf Richter for WOLF STREET.
OK, it’s spring selling season, the famously best times of the year to sell a home, because that’s when prices rise and sales rise due to hot demand from home buyers who were hiding out in the winter. But this year?
The median price of all types of previously owned houses, condos, and co-ops whose sales closed in April fell year-over-year by 1.7% to $388,800, the third month in a row of year-over-year declines, according to the National Association of Realtors. A debacle we haven’t seen since February 2012, when the market emerged from Housing Bust 1. From the peak last June, the median price declined by 6% (historic data via YCharts):
For single-family houses, the median price fell 2.1% year-over-year, the third year-over-year decline in a row, to $393,300. For condos, the median price still ticked up 0.7% year-over-year, to $348,000.
But it’s still spring selling season when prices always rise from one month to the next. Even during Housing Bust 1, the median price often rose month to month during spring selling season, and sometimes by quite a bit. And the median price in April was up from March, but that increase was smaller than the increase in April 2022 (+4.3%). Hence the larger year-over-year decline (historic data via YCharts):
Sales of all previously owned homes fell by 3.4% in April from March, to a seasonally adjusted annual rate of sales of 4.28 million homes, solidly entrenched in the dismal levels of Housing Bust 1.
Sales in April compared to the Aprils in prior years, per the seasonally adjusted annual rate of sales:
- April 2022: -23.2%.
- April 2021: -28.2%.
- April 2019: -18.2%.
- April 2018: -21.2%.
Priced right, nearly any home – nearly anything – will sell. And lower home prices would bring out more buyers which would help unfreeze the market. But that’s just not happening. Sellers are still thinking that this too shall pass, “this too” being the 6.5% mortgage rates.
Actual sales in April – not seasonally adjusted annual rate, month-over-month (MoM) and year-over-year (YoY):
- All existing homes: -6.4% MoM; -27.4% YoY; to 336,000 homes.
- Single-family houses: -7.1% MoM; -26.9% YoY; to 299,000 houses.
- Condos and co-ops: 0% MoM; -31.5% YoY; to 37,000 condos.
Investors pull back: All-cash sales – often investors and second home buyers – plunged by 22% year-over-year to 94,000 homes in April (a 28% share of 336,000 sales), from 120,000 homes in April 2022 (a 26% share of 463,000 sales).
By region, year-over-year sales plunged in all regions (map via NAR):
Median days on the market lengthened. Homes that actually sold spent 22 days on the market in April before they sold, up from 17 days in April last year, according to the National Association of Realtors.
Another measure of median days on the market also lengthened: Homes were either sold or were pulled off the market after 49 days in April, up from 32 days in April last year, according to data by realtor.com.
Inventory for sale rose to 1.04 million homes in April, from 980,000 homes in March and from 970,000 homes in February.
Months’ supply rose to 2.9 months, up from 2.6 month in March, and up from 2.2 months a year ago. In 2019, supply ranged between 3.0 months and 4.3 months.
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