Supply is coming back, demand is not. Prices are still way too high.
By Wolf Richter for WOLF STREET.
The national median price of existing homes of all types – single-family houses, condos, and co-ops – whose sales closed in October dropped to $391,800, down by 5.1% from the peak in June 2022, according to data from the National Association of Realtors (NAR) today.
First “lower high” since Housing Bust. The median price in June 2023, the seasonal peak, was below the all-time peak of June 2022. This was the first such event of “lower highs” (purple line in the chart) since the Housing Bust, and prices have dropped further since then (historic data via YCharts):
Generally, there is an uptick or flat-spot in October from September that might also reach November. This year, the price fell in October from September. But last year, prices just kept plunging, which was very unusual, following the pandemic pattern of normal seasonality going out the window. Due to the steep plunge in prices last year in July through December, the median price was up year-over-year by 3.4%.
Sales of previously owned houses, condos, and co-ops, at a seasonally adjusted annual rate of 3.79 million homes in October, have collapsed to levels not seen since the worst three months of the housing bust: The post-Lehman-bankruptcy November in 2008 (matched it) and July and August 2010.
Sales compared to prior Octobers (historic data via YCharts):
- From 2022: -14.6% from already crashed sales
- From 2021: -38.8%.
- From 2019: -26.8%.
- From 2018: -29.9%.
Actual sales – not the seasonally adjusted annual rate – fell 10.2% from the already depressed levels in October 2022 to 333,000 homes.
Seasonally, January and February mark the low points of the year in terms of sales. Sales that closed in those two months reflect the lull in activity over the holidays. June marks the peak volume in closed sales, reflecting the end of “spring selling season.” During the second half of the year, sales head down, as we can see in the actual sales data, not seasonally adjusted and not annual rates (data via NAR):
Sales changes by region, year-over-year, from the beaten-down levels last year:
Price reductions at 37.6% of active listings in October blew by the pre-pandemic highs. Sellers are getting more motivated to sell their homes while buyers have vanished at these prices and sales volume has collapsed (data via realtor.com):
Supply rose to 3.6 months, the highest since June 2020, with 1.15 million homes for sale, according to NAR. Supply in 2017 through 2019 ranged between 3.0 and 4.3 months (historic data via YCharts).
Active listings jumped by 5% for the month to 737,480 homes. This 5% month-to-month was a huge increase for October, when active listings normally (pre-pandemic normally) didn’t move much or dipped. Active listings are inventory minus homes listed as “sale pending” (data via realtor.com):
Median days on the market rose to 50 days in October before the homes were either sold or pulled off the market, according to data from realtor.com. This metric reflect in part how aggressively sellers pull their listings back off the market when they don’t get the response they’d imagined:
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