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Home Sales Down, but Home Prices Still Inch Up

By BayArea following x   2019 Jan 31, 6:15am 807 views   6 comments   watch   nsfw   quote     share    


The big headline over the past few months is huge sales declines YoY.

But prices look to still be inching upward.

What is the trigger or event or sequencing that will turn sales declines into pricing declines?

https://www.cnbc.com/2019/01/30/southern-california-home-sales-plunge-20percent-in-december-lowest-pace-in-11-years.html
1   HeadSet   ignore (1)   2019 Jan 31, 6:47am   ↑ like (0)   ↓ dislike (0)   quote   flag        

What is the trigger or event or sequencing that will turn sales declines into pricing declines?

Time. Prices will lower when people realize they must sell at market price, not what they think they "need" or "deserve."
2   Heraclitusstudent   ignore (2)   2019 Jan 31, 1:05pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

BayArea says
What is the trigger or event or sequencing that will turn sales declines into pricing declines?


Maybe you are confusing the causality: sales go down... because prices go up.
And as the market becomes more exclusive to the rich, prices can go on increasing. Doesn't matter if the rest population is either leaving or living in the streets.

The only moderation would be from building more.
3   mell   ignore (2)   2019 Jan 31, 3:24pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Heraclitusstudent says
BayArea says
What is the trigger or event or sequencing that will turn sales declines into pricing declines?


Maybe you are confusing the causality: sales go down... because prices go up.
And as the market becomes more exclusive to the rich, prices can go on increasing. Doesn't matter if the rest population is either leaving or living in the streets.

The only moderation would be from building more.


Not necessarily. Usually few sales will skew the median upwards as the rich are always willing to buy (they don't need to time the market). Overall price action has been down for regular houses.
4   WineHorror1   ignore (1)   2019 Jan 31, 3:29pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

It's because few homes are being built and the ones being built are expensive.

Fewer homes being built can only end up causing fewer sales and rising prices.
5   AD   ignore (0)   2019 Feb 24, 8:47pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

I agree about housing inventory being down, therefore lower supply is one of the main reasons that home prices may be rising especially in certain zip codes like in California, but perhaps not in increasing-property tax states in the northeast.

New housing construction (i.e., housing starts) has slowly decreased since October 2016:

https://tradingeconomics.com/united-states/housing-starts

https://fred.stlouisfed.org/series/HOUST

While mortgage applications have declined 5% compared to 12 months ago :

https://www.cnbc.com/2019/02/13/mortgage-applications-drop-3point7percent-as-homebuyers-pull-back.html
6   ThreeBays   ignore (0)   2019 Feb 24, 9:24pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Price increases plus rising interest rates make it not only tough for new homeowners to buy, but also for owners to want to move.

Consider an owner that bought a starter home in the past decade, and had prices go up 50 to 100% since. Or a longer time owner with even larger increases. For this owner in CA, moving is very expensive and increases ongoing costs substantially. Majority won't want to move and sell right now, just ppl retiring out of major metros in CA, or those that are so rich they just don't care to lose a few hundred thousand on moving.

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