Home sales plunge – or do they?
A recent article headlined a home sales plunge in November, but as always it pays to look into the numbers in more detail.
The National Association of Realtors (NAR) used a more moderate headline in its Existing home sales suffer setback in November report.
So what actually happened in November?
Existing home sales fell 10.5% to a seasonally adjusted annual rate of 4.76 million, the lowest since April 2014, but the median price of a Single Family Home (SFH) increased 6.6% from a year ago, while the median condo price increased 4.7%.
Lawrence Yun, NAR chief economist, says multiple factors led to November’s sales decline, but the primary reason could be an anomaly as the industry adjusts to the new Know Before You Owe rule. “Sparse inventory and affordability issues continue to impede a large pool of buyers’ ability to buy, which is holding back sales,” he said. “However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it’s highly possible the stark sales decline wasn’t because of sudden, withering demand.”
According to Yun, although Realtors® are adjusting accordingly to the Know Before You Owe initiative, the main takeaway so far has been the need for longer closing times. According to NAR’s Realtors® Confidence Index, 47 percent of respondents in November reported that they are experiencing a longer time to close compared to a year ago, up from 37 percent in October.
“It’s possible the longer timeframes pushed a latter portion of would-be November transactions into December,” says Yun. “As long as closing timeframes don’t rise even further, it’s likely more sales will register to this month’s total, and November’s large dip will be more of an outlier.”
If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
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