April is supposed to be the month that real estate agents’ phones ring off the hooks, yard signs sprout like dandelions, buyers line up for showings and offers fall from the sky like cherry blossom petals.
Above all, this was to be the spring season when at last all the stars were properly aligned in the real estate galaxy after eight years of one disaster after another. Inventories at last are adequate. Interest rates have been better but they are still darn good. Lenders are finally showing some signs that they are paying attention to the marketplace and trying to make life a little easier for buyers.
Instead of sellers’ markets of buyers’ markets, the bywords today are balance and moderation. Everybody wins, just like the good old days.
Except something seems to be wrong. The first reports from sales front are confusing, unsettling, downright disappointing:
Freddie: Mixed Signals
Freddie Mac reports that due to a slower than normal first two months of the year, they are lowering their home sales projections slightly, from 5.6 million to 5.5 million. “We’re getting mixed signals as we start the spring home buying season. Tight inventory may pose a significant challenge for home buyers in many markets across the country, which may result in higher home prices and sales being lower than expected,” said Frank Nothaft, Freddie Mac VP and chief economist.
California, one place were slow sales can’t be blamed on the snow, saw the slowest sales for a March since 2008, reports DataQuick, when 24,565 homes sold – a record low for the month of March. California’s high for March sales was 68,848 in 2005. Last month’s sales were 23.9 percent below the average of 43,251 sales for all months of March since 1988, when DataQuick’s statistics begin.
NAR on the Bubble
Even the National Association of Realtors is sending signals that sales are sluggish. February sales declined 0.4 percent to a seasonally adjusted annual rate of 4.60 million from 4.62 million in January, and 7.1 percent below the 4.95 million-unit level in February 2013. February’s pace of sales was the lowest since July 2012, when it stood at 4.59 million. Pending home sales for March declined for the eighth straight month. Modest increases in the Midwest and West were offset by declines in the Northeast and South; all regions are below a year ago. Stay tuned for a critical update on the spring season when Lawrence Yun and crew release March existing home sales Tuesday, April 22.
Redfin’s Red Light
Redfin reports Home sales fell in 18 out of its 19 markets in March and were down 11.6 percent overall from last March. Baltimore was the only market that posted an increase in sales, with a 0.2 percent gain from a year ago. The largest drops in sales were in Ventura, Calif (-24.8%), San Diego (-19.1%) and Phoenix (-17.3%).
Should sales remain disappointing, what will the impact be on prices, now that inventories have picked up?