{"id":1665,"date":"2020-02-21T11:24:37","date_gmt":"2020-02-21T16:24:37","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1665"},"modified":"2020-02-21T11:24:37","modified_gmt":"2020-02-21T16:24:37","slug":"january-existing-home-sales-2","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1665","title":{"rendered":"January Existing Home Sales"},"content":{"rendered":"\n

KEY DATA:<\/strong>  Sales: -1.3%; Over-Year: +9.6%; Median Prices\n(Over-Year): +6.8%<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cThe scarcity of existing homes on the market\ncontinues to limit sales.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>   The\nmeek have been leading way in the economy as housing has gone from okay to Tony\nthe Tiger land: Grrrrrrrreat!  Existing\nhome demand is generally following the pattern set by new homes and starts. Sales\neased in January<\/em><\/strong>, which is not what I had expected.  I thought we would see a bit of a rise.  The drop was pretty much equal in both\nsingle-family and condos.  But remember,\nthese are closings, compared to contract for new homes, so we may see a major\npick up over the next couple of months.<\/em><\/strong> \nThree of the four regions posted gains or were flat.  Only a sharp decline West kept the sales pace\ndown.   Compared to January 2019, though,\ndemand surged.<\/em><\/strong>  As\nfor prices, they were still up pretty sharply over the year. <\/em><\/strong> The key for both prices and sales is the\ninventory number.  It stands at 3.1\nmonths.<\/em><\/strong>  That is, at the current\nselling pace, the number of homes listed would be depleted in a little over\nthree months.  That is up slightly from the historic\nlow set in December.  In other words,\nthere are few homes to be bought so there are few sales to be made and with\ndemand still decent, prices should be rising solidly.   <\/em><\/strong><\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>  Existing\nhome sales are a lagging indicator in that they represent purchase decisions\nmade a month or more in the past.  That\nthey are holding up pretty well is an indication that the sector is strong. <\/em><\/strong> The level of home construction (housing\nstarts) this quarter started off over 8% above the average in the fourth\nquarter and there is little reason to think that gain will tail off significantly.  So expect housing investment to be a key factor\nin growth this quarter. <\/em><\/strong> But it\nwould be nice if sales rose faster.  Home\npurchases translate into consumer demand for housing related goods, usually\nwithin about six month after the rise in demand.  We need something to offset the slowing in\nvehicle purchases <\/em><\/strong>if growth is to be sustained at 2% and\nfixing up a newly-purchased housing unit would be one source of that\ndemand.  But homeowners seem to be\nentrenched and are unwilling to put their places up for sale, so don\u2019t expect\ndemand to rise sharply anytime soon.  Should\ninvestors worry about that?  Only if they\ncare about economic fundamentals<\/em><\/strong> and I am not really sure where they\nstand on that.  Actually, I am not sure\nthey really care that much.  But the\nFed does and while no Fed member is out there saying there is irrational\nexuberance in the markets, they have to be wondering if the disconnect between economics,\nearnings and stock prices could create some real issues going forward.<\/em><\/strong>  Indeed, I think the recent spate of comments\nabout how to manage in an environment of low interest rates is a warning that\nthere is not much rate-cut ammunition left.<\/em><\/strong>  That, of course, is a problem created in part\nby last year\u2019s rate reductions, which we know did nothing but hype the markets\neven more.  It should be an interesting\nspring and summer, when the full impacts of the coronavirus start showing up.<\/em><\/strong>   <\/em><\/strong>   <\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA:  Sales: -1.3%; Over-Year: +9.6%; Median Prices (Over-Year): +6.8% IN A NUTSHELL:  \u201cThe scarcity of existing homes on the market continues to limit sales.\u201d WHAT IT MEANS:   The meek have been leading way in the economy as housing has gone from okay to Tony the Tiger land: Grrrrrrrreat!  Existing home demand is generally following … Continue reading January Existing Home Sales<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1665","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1665"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1665\/revisions"}],"predecessor-version":[{"id":1666,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1665\/revisions\/1666"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}