What Did the Existing Sales Report Actually Reveal?
There will be headlines across the country reporting that the latest Existing Home Sales Report from the National Association of Realtors (NAR) revealed that sales were below year-ago levels for the first time in 29 months. The more dramatic will claim that this is proof that the housing sector is still on shaky grounds. Others will try to explain away the decrease in sales by looking at a possible lack of consumer confidence or rising interest rates.
We believe the fall in sales is directly attributable to a lack of salable listing inventory. Here is a map showing year-over-year sales numbers by region.
We can see that two of the four regions had an increase in sales (Northeast and South Regions) while a third was unchanged (Midwest Region). The big fall-off in sales occurred in the Western Region. The dramatic fall-off in the West can be directly linked to a shortage of inventory in their hottest markets.
If the decrease in sales was caused by an eroding of consumer confidence and/or rising interest rates, we believe each region would have seen similar decreases.