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For those who wonder whether the real estate market is cooling off: Today’s data from the National Association of Realtors® shows a cool front, if not an ice storm. Existing-home sales were down 4.8% in August, to 5.31 million from 5.58 million in July.
Yes, even the Northwest and the Northeast, which have steadily held or gained for months, saw their numbers droop. This, the NAR says, “despite slowing price growth and a rise in sales to first-time buyers.”
Even though sales inched down last month, too, let’s not break out the bubbly just yet.
“While analysts had expected a 2% decline, this was worse than expected and likely impacted in part by the stock market declines in August,” said the chief economist of realtor.com®, Jonathan Smoke.
High prices are indeed still on the horizon. For one thing, the slowdown is partly the usual seasonal slowdown as kids go back to school and people put their house hunting on hold.
As NAR reports, “Despite last month’s decline, sales have risen year-over-year for 11 consecutive months and are 6.2% above a year ago.” The median price for existing homes in August was $228,700, and that’s not only a 4.7% year-over-year increase but “the 42nd consecutive month of year-over-year gains.”
Condo and co-op sales seem to be the most in demand. Those sales declined only 1.6%, compared with a 5.3% decline for single-family homes. The median price for single-family homes was $230,200 in August, an increase of 5.1% from August 2014. Existing condos and co-ops aren’t much cheaper, but their prices aren’t rising as fast; their median price was $217,400 in August, a 2.2% year-over-year increase.
More kindling for continued high prices: despite a 1.3% increase in inventory, it’s still 1.7% less than it was a year ago, to 2.29 million from 2.33 million. Meanwhile, as the NAR found earlier this month, “homebuilding activity is currently insufficient in a majority of metro areas.” You know what that means: not enough supply, too much demand. You can fill in the rest.
Regional Breakdown
Northeast: August existing-home sales were unchanged from July, 6.1% above a year ago. The median price was $271,600, 2.4% above August 2014.
Midwest: August existing-home sales declined 1.5% from July, 5.8% above a year ago. The median price was $181,100, 4.0% above August 2014.
South: August existing-home sales declined 6.6%% from July, 5.9% above a year ago. The median price was $196,300, 5.9% above August 2014.
West: August existing-home sales declined 7.2% from July, 7.2% above a year ago. The median price was $321,300, 7.1% above August 2014.
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