Sellers suffer from denial. If you set the “right” price, the house will sell, but “right” is the buyer’s position, and they are much lower.
To wolf richter for wolf street.
Sales of all types of previously owned homes, including single-family homes, condos and co-ops, fell 5.9% in October from September, the ninth straight month of decline, with seasonally adjusted annual sales of 443. I became a million. In much less time than the lockdown month of April 2020, according to to the National Association of Realtors. Compared to the recent free money peak in October 2020, sales are down 34%.
Sales declined 28% year-on-year, marking the 15th consecutive month of year-on-year declines. Since April 2020 and his May, this was his lowest sales rate since December 2011 (historical data Y-chart):
Sales of detached houses October fell 6.4% from September and fell 28% year-on-year to a seasonally adjusted annualized rate of 3.95 million units.
Condominiums/co-op sales October was down 2.0% from September and down 30% year-over-year to a seasonally adjusted annualized rate of 480,000.
Investor or Second Home Buyer Purchased 16% of homes in October from a range of 17% to 22% for spring and winter. In other words, investors have also lost interest in buying at these prices, so their purchases plummeted at an even higher rate than those of regular buyers.
This plummeting sales shows that potential sellers and buyers are at odds. Many potential sellers refuse to accept reality and drop their prices to where they are. Instead, they’re thinking, “This too will pass,” hoping and praying for a Fed pivot or miracle or whatever, and they won’t put the house on the market or even pull it off the market. After not getting any traffic for your desired asking price. And buyers are losing interest in current prices.
There are decently priced homes, or discounted homes where there are buyers. But sellers don’t want to go there. And it’s also seen in active listings. However, as more sellers realize this, there have been some price cuts.
price cut: In October, the number of discounted homes rose to 327,184 units, the highest since October 2019 and slightly below (data showed realtor.com).
However, the percentage of active listings offering price reductions has been over 40% in the last five months, by far the highest data available on realtor.com going back to 2016.
Median The number of all types of homes closed for sale in October fell for the fourth month in a row, and is now down 8.4% from its peak in June.
That pushed the year-over-year profit down further to 6.6% from 8.0% in September, down from the 20% to 25% range of year-over-year profits during last year’s peak frenzy. Only part of the price drop is responsible, the rest of the price drop is some sellers becoming more realistic (Historical data by YCharts):
active listings (total inventory for sale less properties to be sold) rose to 754,000 units in October, up 33% from the previous year and the highest since August 2020.Be a pivot or a miracle for the Federal Reserve, don’t put vacant homes on the market or pull them off the market after a while (data via data realtor.com).
Total inventory days supply increased to 3.3 months of sales, the highest since June 2020.
Sales by region: Sales fell in all regions, but the worst in the West:
- Northeast: -6.6% mum; -23.0% y/y.
- Midwest: -5.3% Mom; -25.5% YoY.
- South: -4.8% mothers; -27.2% y/y.
- West: -9.1% mothers; -37.5% y/y.
When mortgage rates jump into normal ranges The era before paper money was printed:
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