Sellers struggle to deny: At the “right” price the house will sell, but the “right” is where the buyers are, and they are far less.
By Wolf Richter for WOLF STREET.
Sales of all types of previously owned homes — townhouses, condos and co-ops — fell 5.9% in October compared to September, the ninth consecutive month of declines, to a seasonally adjusted annual sales rate of 4.43 million homes, just . A hair above closing month is April 2020, according to the National Association of Realtors. Compared to the last free money peak in October 2020, sales are down 34%.
On a year-over-year basis, sales fell 28%, the 15th consecutive month of annual declines. After April and May 2020, this was the lowest sales rate since December 2011 (historical data via YCharts):
Single family homes for sale It was down 6.4% in October compared to September, and down 28% year-over-year, to a seasonally adjusted annual rate of 3.95 million homes.
Sale of housing units and cooperatives It was down 2.0% in October from September, down 30% year-over-year, to a seasonally adjusted annual rate of 480,000.
Investors or second home buyers It bought 16% of homes in October, down from a range of 17%-22% in the spring and winter. In other words, their purchases fall at a higher rate than those of ordinary buyers, as investors also lose interest in buying at these prices.
This drop in sales is a sign that potential buyers and sellers are in trouble. Many potential sellers refuse to accept the reality and lower their prices to where the sellers are; Instead, they’re thinking, “This too shall pass,” and they’re hoping or praying for a Fed pivot or for a miracle or whatever, and they don’t put their homes on the market, or they pull them off the market after not getting any traffic at a price. their ambitious request. Buyers have lost interest in current prices.
Homes that are priced right – that is, at low prices where the buyers are – sell. But sellers don’t like to go there. We see this in active lists as well. But there are some price cuts going on, as more sellers become aware of this.
price cutsIn October, the number of homes listed with price reductions rose to 327,184, the highest level since October 2019, and slightly below it (data via realtor.com).
But the percentage of active listings with price cuts has been over 40% over the past five months, the highest percentage in data made available by realtor.com, dating back to 2016:
Average price Of all home types that closed in October, sales fell for the fourth consecutive month and are now down 8.4% from the peak in June.
This pared the year-over-year gain to 6.6%, down from 8.0% in September, and down from annual gains in the 20% to 25% range at the height of last year’s frenzy, suggesting that seasonality is solely responsible for part of the price drop. And the rest of the price drop is some sellers getting more realistic (historical data via YCharts):
active lists (Total inventory for sale minus properties with pending sales) rose to 754,000 homes in October, up 33% from a year ago, and the highest since August 2020. It’s still relatively low, another sign that potential sellers are still hoping to get a bank. Pivot or Miracle Feds do not put their vacant home on the market or take it off the market after a short period (data via realtor.com).
The daily supply of total inventory rose to 3.3 months of sales, the highest level since June 2020.
Sales by regionSales fell in all regions, but fell most in the West:
- Northeast: -6.6% illiterate; -23.0% YoY.
- Midwest: -5.3% um; -25.5% on an annual basis.
- South: -4.8% um; -27.2% YoY.
- West: -9.1% um; -37.5% YoY.
Mortgage rates have jumped into the normal-ish range Pre-money era:
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