Home Sales and a Hard-to-Follow Summer Plot

Jim Benson Real Estate Leave a Comment

If your idea of a gripping beachside summer read includes plots that revolve around real estate statistics, last week brought you a candidate. Was it the kind of megahit that would get you settling back in your folding chair, digging your toes into the sand, and becoming totally absorbed? For this latest would-be best-seller served up by the National Association of Realtors®—less-than-compellingly entitled, “Existing-Home Sales Housing Snapshot”—the answer is, ‘not so much.’

The healthy part of what would actually happen next is that you wouldn’t have forgotten to limit your time in the sun. Instead of becoming absorbed in the plot, you’d have reapplied sunscreen after the two (or is it four?) hours, the way you’re supposed to. In fact, after a very short while, you might be inclined to fold everything up and go back to the car.

The reason for your disappointment is that the plot is getting hard to follow. The “Seasonally Adjusted Annual [Sales] Rate of 4.07 million” is what you’d expect (it works out to a year-over-year decline of 16.6%). It’s what makes sense since mortgage interest rates continue to rise. The villainy is satisfying enough.

But next, you read that the national inventory of existing homes grew (3.3 months versus 3.2 months a year earlier). You’d certainly have come to expect that prices should lower since they have been bolstered by declining inventories for some time, yet now they tell you that U.S. Median Sales Prices rose by 1.9% over a year earlier! What’s going on here? Who’s on first?

The answers aren’t spelled out (and to be fair, the NAR did call it a “Snapshot”)—but the details aren’t going to hold many readers in thrall. This is a glimpse of existing home sales last month, but that doesn’t include new construction. And that sales price doesn’t take into account the effect of inflation on real, inflation-adjusted dollars. And median sales prices don’t take into account other reality factors like repeat sales prices (which gauge price performance for the same homes sold once again), and—well, the end result isn’t going to have critics raving about the Snapshot as a real summertime page-turner.

Another bottom-line fact is that our own Fishers home sales are more relevant for local buyers and sellers. Call us for more than a snapshot of the latest activity!

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Jim Benson