Home sales are up!
Drill down and do some research and prices are down and not just down but down YoY like I have been forwarning for months. But wait 5 months for double-digit.
California is seeing a 20% decline, the Southwest 15%, the South 8 to 10% (except parts of Florida), and Washington DC 8% from the peak.
But yet the first thing you hear from real estate pundits and self-proclaimed experts is that sales and rates are down, housing shortages still exist, and supply is low.
No one talks of a backlog of new housing construction not selling, pending sales falling, inventory rising, sales pace falling, new mortgage applications down to 20-year lows, credit scores falling, mortgage denial rates rising, credit tightening, new household formations slowing at the fastest pace since GFC, net population growth is nearly at 0, home prices falling at the fastest pace since GFC, and home prices well above median incomes creating an affordability crisis not seen since the early 80s.
Cherry-picking data is easy. I can cherry-pick from the preponderance of the data that shows that this housing slump is still ongoing. When you pick 1 data point and talk all day long about supply and demand dynamics but ignore the oxymoron of low supply but falling prices. It’s not shocking, as it continues with claims that “all-cash sales accounted for 28% of transactions in February, down from 29% in January but up from 25% in February 2022”. That’s great just the math doesn’t really work when last year we sold 5.95M homes and this year we are projected to barely sell 4M as demand cratered. No matter how you do the math, all-cash sales are down significantly. In some areas, they are down 50% to 68% in places like Phoenix (where all the tech workers were going to move to), Austin, or Atlanta. All these areas have seen a jump in inventory, more new construction coming online, investors fleeing, the luxury market falling the most, and prices continuing to fall as stale inventory builds up and prices are simply out of reach of the locals.
No matter what they will come up with some cherry-picked data or narrative like 99% of homeowners have locked in low rates. At least 95.4% of homeowners don’t sell their homes but Well, 2,400 divorces happen every day, 7,452 die every day, and every year at least 4.6% sell. Life happens, the economy happens, and Fed policy happens. Real estate prices are dictated at the margins, not 95.4% that don’t sell.
If the Fed policy continues, the economy goes into a recession then you can rest assured that this journalist and many pundits and actors in the real estate industry will continue pumping out at ever higher rates more positive spin fluff pieces as prices of homes keep falling.