“I just had a listing sell for $200,000 over asking. All of my homes are selling within a week, and at list price. This is not my reality. Am I missing something?”
That was a text I received last night from an extremely successful and experienced agent who has listed and sold more homes than pretty much anyone.
She sent the text after reading this headline in the WSJ: Home Prices in March Posted Biggest Annual Decline in 11 Years.
Enter Barry Habib. He beat this dead horse again yesterday in his morning update, and I decided not to blog about it because I have beaten this dead horse into hamburger myself.
But – there were so many headlines yesterday that I am going to keep pounding that horse into a pulpy, mashed-up mass of meat, hair, and flesh… wait, am I taking this metaphor too far?
Before jumping into Barry’s data, I want to remind everyone again that our buyers are up against multiple offers constantly now; that one of our buyers was one of 51 offers last week; and that my niece has been getting outbid (over asking) on properties in the $300,000 range in Texas repeatedly over the last few months. So, the above headline is not our reality either.
The report everyone is focusing on is the National Association of Realtors (NAR) report on Existing Home Sales for March.
Ironically, Barry was delighted with this “blockbuster” report, as he viewed it as entirely good news and below are a few of his points:
- The News Beat Expectations. Home sales were expected to be down 4% month over month but were in fact down only 2.4% – showing once again that the market is stronger than everyone expected, DESPITE CLIMBING MORTGAGE RATES.
- Median Home Price Was UP Month over Month. While median home prices dropped year over year, median home prices climbed 2.2% from February. Barry proclaims that this is proof of a “housing turnaround.”
- Median Home Price Misleading Anyway. This is a biggie, and it is something I blogged about recently: Putting the “Median Home Price” Nonsense to Bed Once and For All. TLDR: The median home price just reflects the middle price of all homes sold, and it does NOT reflect appreciation. Hence, if more smaller, lower-priced homes start to sell as a proportion of all homes sold, the median price will drop even if homes are still appreciating overall.
- Prices always fall from June. Barry showed a NAR chart going back years that shows home prices peaking every June, and then falling thereafter – and that is part of the reason why year-over-year prices are falling; it is just normal seasonal price movements.
- Inventory remains very tight. There were 980,000 listings for the third straight month – a far cry from the 4 million we saw in 2007. Active (non-pending) listings remained below 600,000. There is a 2.6-month supply of listings – far short of the “normal” 4.6-month supply. The average days on market fell to 29 from 34 in February. And finally, the % of listings selling in under 30 days increased by 8%. Note to the negative Nellies: This is all GOOD NEWS for housing.
Redfin Jumps on the Negativity Bandwagon Too!
I found it very interesting that Redfin jumped on the negativity bandwagon too, as they are in the business of selling real estate. But maybe getting clicks is now more important?
Anyway – here is Redfin’s headline: Home Prices Fell 3% in March—Biggest Annual Drop in Over a Decade.
Barry’s team also hit this hard too, pointing out the following;
- Redfin too focuses on the very misleading “median home price” number – so I again recommend re-reading the blog I link to above;
- For those who insist on still focusing on median home prices, they should note that the median home price was UP 3.6% from February, according to Redfin;
- New listing fell 23.3% year-over-year to the lowest level on record (reflecting very tight inventory once again); and
- 44% of homes had multiple offers – indicating that activity and competition are picking up (what we are all seeing).
Once again, this is data that we love to share with all of our clients to ensure they know they are still buying in a healthy housing market.
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