One step forward, one step back. That seems to be the housing market story of late. Total existing home sales fell in the November 2019 Housing Market Recap after an increase in October. However, sales were up in two regions, with the Northeast and Midwest increasing while the West and South fell. Prices rose yet again, continuing a trend that began in 2012. Days on the market rose, while inventory fell both month-to-month and year-over-year.
November existing home sales fell 1.7 percent from October, but are up 2.7 percent compared to November 2018, according to the National Association of Realtors® (NAR) November Existing Home Sales Report, released December 19th.
Home prices rose again. The median price of existing homes sold in November was $271,300, an increase of 5.4 percent from November 2018 ($257,400). We’ve now reached 93 consecutive months of year-over-year increases.
Days on the market (DOM) increased compared to October, moving from 36 to 38. This is still lower than the 42 DOM in November 2018. Another way to look at this is that 45 percent of homes were listed and sold within a month. Buyers are moving quickly when they find the home they want.
Inventory fell 7.3 percent compared to October, and 5.7 percent year-over-year. At the current sales rate, the supply of unsold inventory was 3.7 months, down from 4.0 months a year ago. (NAR considers 6 months of inventory a balanced market.) Low inventory continues to be the dominant force in the market nationally.
NAR chief economist Lawrence Yun was not overly concerned by the drop in sales, but identified the lack of inventory as an ongoing problem. “Sales will be choppy when inventory levels are low, but the economy is otherwise performing very well with more than 2 million job gains in the past year,” said Yun. He continued by saying, “The new home construction seems to be coming to the market, but we are still not seeing the amount of construction needed to solve the housing shortage.” He suggested that builders consider incorporating more modular homes into their plans rather than focusing on site-built homes.
Sales mixed across regions. Comparing November to October, sales rose 2.3 percent in the Midwest and 1.4 percent in the Northeast, but fell 3.5 percent in the West and 3.9 percent in the South. The West led increases in year-over-year median home prices, rising 7.1 percent, followed by the Midwest at 5.9 percent, the South at 4.8 percent, and the Northeast at 3.9 percent.
Hottest markets. The NAR market hotness report reflects supply and demand by comparing median days on the market (supply) and listing views per property (demand). Fort Wayne, IN tops the list for the fifth (!) month in a row. The rest of the November top ten are Burlington, NC, Pueblo, CO, Columbus, OH, Colorado Springs, CO, Rochester, NY, Canton-Massillon, OH, Modesto, CA, Vallejo-Fairfield, CA, and Fresno, CA.
The takeaway. If you’re looking for a home, keep your eyes open. Something new might come on the market, even in this traditionally slower sales season. If you’re selling, consider a festive open house to keep your property in front of potential buyers. Whatever you do, take time to enjoy the holidays. Why rush to meet the future? January, the New Year, and the new decade will be here soon enough!