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NAR: existing home sales, prices, inventory levels improve

NAR’s chief economist says that the shrinking foreclosure volume is helping home values, and in some areas price conditions are improving as inventory levels tighten up, and the association expects even stronger price increases in areas like Phoenix, Miami and Orange County.

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Prices and sales levels on the rise

According to the National Association of Realtors (NAR), existing home sales (completed transactions) rose 3.4 percent in the month of April, up 10.0 percent over the year while national median existing home prices rose 10.1 percent year over year to $177,400 in April, up 3.1 percent from March. NAR Chief Economist, Dr. Lawrence Yun said in a statement, “This is the first time we’ve had back-to-back price increases from a year earlier since June and July of 2010 when the gains were less than one percent. For the year we’re looking for a modest overall price gain of 1.0 to 2.0 percent, with stronger improvement in 2013.”

Housing inventory levels rose 9.5 percent from March to 2.54 million existing homes for sale, a 6.6 month supply at the current sale pace, up from a 6.2 month supply in March. Inventory levels have improved, however, and are 20.6 percent below a year ago when the inventory levels hit a 9.1 month supply. NAR notes that the record for unsold inventory was 4.04 million in July 2007.

Dr. Yun said, “It is no longer just the investors who are taking advantage of high affordability conditions. A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices. The general downtrend in both listed and shadow inventory has shifted from a buyers’ market to one that is much more balanced, but in some areas it has become a seller’s market.”

Additionally, Dr. Yun noted, “A diminishing share of foreclosed property sales is helping home values. Moreover, an acute shortage of inventory in certain markets is leading to multiple biddings and escalating price conditions.” He observed that some areas with tight supply include the Washington, D.C., area; Miami; Naples, Fla.; North Dakota; Phoenix; Orange County, Calif.; and Seattle. “We expect stronger price increases in most of these areas.”

Housing facts from NAR

According to the NAR, in April:

  1. Distressed homes accounted for 28 percent of sales, down 1.0 percent for the month and 9.0 percent for the year.
  2. Foreclosures accounted for 17 percent of sales, short sales accounted for 11 percent.
  3. Foreclosures sold for an average discount of 21 percent below market value.
  4. Short sales sold for an average discount of 14 percent below market value.
  5. First time buyers rose 2.0 percent to account for 35 percent of buyers.
  6. All cash sales accounted for 29 percent of sales, down 3.0 percent from March and 2.0 percent for the year.
  7. Investors account for 20 percent of sales, within 1.0 percent of where it has been for over a year.
  8. Single-family home sales rose 3.0 percent to 4.09 million in April, 9.9 percent higher than the pace in April 2011.
  9. The median existing single family home price was $178,000 in April, up 10.4 percent year over year.
  10. Condo and co-op sales rose 6.0 percent for the month, 10.4 percent for the year, and hit 530,000 units for April.
  11. The median existing condo price was $172,900 in April, up 8.1 percent from April 2011.

Regional performance varied for the month, showing widespread signs of improvement, according to NAR:

  1. Existing-home sales in the Northeast rose 5.1 percent to an annual level of 620,000 in April and are 19.2 percent higher than a year ago. The median price in the Northeast was $256,600, up 8.8 percent from April 2011.
  2. Existing-home sales in the Midwest increased 1.0 percent in April to a pace of 1.03 million and are 14.4 percent above April 2011. The median price in the Midwest was $141,400, up 7.4 percent from a year ago.
  3. In the South, existing-home sales rose 3.5 percent to an annual level of 1.79 million in April and are 6.5 percent higher than a year ago. The median price in the South was $153,400, up 8.0 percent from April 2011.
  4. Existing-home sales in the West increased 4.4 percent to an annual pace of 1.18 million in April and are 7.3 percent above April 2011. The median price in the West was $221,700, a surge of 15.9 percent from a year ago.

Economic News

Boomers retirement may be the true reason behind the labor shortage

(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.

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Older man pictured in cafe with laptop nearby representing boomers retirement.

In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.

Why Boomers are leaving the labor force

CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:

  • Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
  • The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
  • Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.

As Boomers retire, how does this impact the overall labor economy?

According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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