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Slowdown in Showings, Sharp Decline in California Pending Sales, Inventory Surges.

By Al_Sharpton_for_President follow Al_Sharpton_for_President   2022 Jun 17, 7:50am 277 views  14 comments           share      

Housing Economist Tom Lawler's May Existing Home Projection.

There are three items in this note:

Housing economist Tom Lawler’s May existing home projection.

Slowdown in Showings in the Twin Cities.

A Sharp Decline in Pending Sales in California, Inventory Surges.

Early Read on Existing Home Sales in May.

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.35 million in May, down 4.6% from April’s preliminary pace and down 9.6% from last May’s seasonally adjusted pace. Unadjusted sales should show a smaller YOY % decline, reflecting this May’s higher business-day count compared to last May’s.

Local realtor reports, as well as reports from national inventory trackers, suggest that the inventory of existing homes for sale last month was up slightly from a year earlier. However, the NAR’s estimate may not show the same increase as other reports, many of which exclude listings with pending contracts. E.g., the Realtor.com report for May showed that listings excluding those with pending contracts were up 8.0% from last May, while listings including pending contracts were down 3.9% YOY. (Pending listings in the Realtor.com report were down 12.2% from last May.). The NAR’s inventory estimate has tracked the Realtor.com total inventory measure more closely that the “ex-pendings” inventory measure. (Note also that the Realtor.com inventory number reflects average listings during the month, while the NAR inventory number is an end-of-month estimate.)

Finally, local realtor/MLS reports suggest the median existing single-family home sales price last month was up by about 14.7% from last May.

Note: The National Association of Realtors (NAR) is scheduled to release May existing home sales on Tuesday, June 21, 2022, at 10:00 AM ET. The consensus is for 5.41 million SAAR.

Slowdown in Showings in the Twin Cities

The following data is courtesy of David Arbit, Director of Research at the Minneapolis Area REALTORS® and NorthstarMLS (posted with permission). Here is a link to their data.

This graph shows the 7-day average showings for the Twin Cities area for 2019, 2020, 2021, and 2022. The 7-day average showings (red) is currently off 22% from 2019.

There was a huge dip in showings in 2020 (black) at the start of the pandemic, and then showing were well above 2019 (blue) levels for the rest of the year. And showings in 2021 (gold) were very strong in the first half of the year, and then were closer to 2019 in the 2nd half.

Note that there were dips in showings during holidays (July 4th, Memorial Day, Thanksgiving and Christmas), and also dips related to protests and curfews related to the deaths of George Floyd and Daunte Wright.

2022 (red) started off solid but is now below the previous three years.

Sharp Decline in Pending Sales in California, Inventory Surges

From the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.): Home sales in California dip below pre-pandemic levels as the effects of rising interest rates begin to show even as prices set another record, C.A.R. reports

May’s sales pace was down 9.8 percent on a monthly basis from 419,040 in April and down 15.2 percent from a year ago …

“Pending home sales declined 30.6 percent in May – the biggest drop since the first month of the pandemic – likely due to eroding affordability, rising mortgage rates and home prices, and the increased risk of a recession,” said C.A.R. Vice President and Chief Economist Jordan Levine …

With both closed sales and pending sales slowing by double-digits, total active listings experienced a gain of 46.7 percent in May, the largest year-over-year growth in at least the last 89 months. Active listings in May also climbed to the highest level since July 2020 and had a month-to-month increase of 26.4 percent from April.

emphasis added

This California report was for May. With the recent increase in mortgage rates, sales will decline further - and inventory will increase.

https://calculatedrisk.substack.com/p/slowdown-in-showings-sharp-decline

1   AmericanKulak   2022 Jun 21, 11:19pm  

The GDP numbers come out June 29th

3   NuttBoxer   2022 Jun 22, 12:29pm  

Looking at properties in Imperial County and Yuma I'm seeing houses 2,700+ sqft listed for $350-450k. Won't be long before they start bailing in SD county too.
4   ForcedTQ   2022 Jun 22, 12:43pm  

Problem with those areas will be continuity of water and electric utilities…..
5   Ceffer   2022 Jun 22, 12:53pm  

Cabana Style Gazebo LOL! It's a fucking tent. Thing will probably blow away with the first good Santa Ana wind.
6   1337irr   2022 Jun 22, 12:58pm  

Ceffer says

Cabana Style Gazebo LOL! It's a fucking tent. Thing will probably blow away with the first good Santa Ana wind.

There is a fire hazard with the propane heater along with that Santa Ana wind...but, hey, it was cheap rent!
7   Ceffer   2022 Jun 22, 1:03pm  

1337irr says

There is a fire hazard with the propane heater along with that Santa Ana wind...but, hey, it was cheap rent!

Homeless always burn their shit down eventually. "Live like homeless royalty for only $600 a month. Of course, that is money you could always spend on fentanyl or crack, so you decide your priorities!"
8   Ceffer   2022 Jun 22, 1:05pm  

The great roll back.







9   Ceffer   2022 Jun 22, 1:14pm  

And in Santa Cruz:





10   exfatguy   2022 Jun 22, 1:26pm  

Lazy realtors don't help, either. There's a listing in my neighborhood (95138) for an overpriced home. The dippy realtor couldn't even be bothered to remove the rotting orange from the driveway during the open-house this past weekend. But I didn't see any cars come, so maybe nobody even saw it. The rotting orange remains there today.
11   HunterTits   2022 Jun 22, 1:50pm  

HunterTits says

WineHorror1 says



$18,000 is a big price drop?


For a $400k home, yes.

Esp since our resident RE 'experts' claimed that none of this should be happening.
12   HeadSet   2022 Jun 22, 2:35pm  

exfatguy says

The dippy realtor couldn't even be bothered to remove the rotting orange from the driveway during the open-house this past weekend. But I didn't see any cars come, so maybe nobody even saw it. The rotting orange remains there today.

"Rotting Orange Realty" thus would be a good moniker for any realtor office with low work standards.
13   Ceffer   2022 Jun 22, 3:59pm  

We're already deep in recession. I can see it in the 'earners' in my hoods. I think Santa Cruz will go down with SiCon job losses unable to support the vacation manses. All of the stretch, speculation, leveraging and overheating will crash.
I am tempted to buy at the bottom, but usually, these crashes are also accompanied by many years of stagnation. With stagflation to boot, and fiat monopoly money crashing, it would mainly be to shift value into a real commodity rather than the stock market fluff with currency resets.
14   B.A.C.A.H.   2022 Jun 22, 4:10pm  

Ceffer says


We're already deep in recession. I can see it in the 'earners' in my hoods.


Yes.

So many folks used two techie incomes, as if the RSU Gravy Train would never end, to "make it all work" in Leafy Neighborhoods with "good" (ie, high standardized test scores) school districts. It's a stressful life. Everything has to go perfect: both techie incomes, evergreen RSUs, etc. I shared on a different thread that for families with children such living at the edge of Peak Income can require Latchkey Children. Ilene Mischeloff's parents made that choice back in the day. (and no, Snarksters, - the mom did not work in the local community when this happened. She had a tech gig in Silicon Valley. The local job came later (too late)).

I used to be a FanBoy of Senator Warren (until she became Pocahontas by playing the Race Card) because I thought her 2004 book "The Two Income Trap" was Spot On about the situation.

pasted from https://www.vox.com/policy-and-politics/2019/1/23/18183091/two-income-trap-elizabeth-warren-book

"..."...The “two-income trap,” as described by Warren, really consists of three partially separate phenomena that have arisen as families have come to rely on two working adults to make ends meet:

The addition of a second earner means, in practice, a big increase in household fixed expenses for things like child care and commuting.

Much of the money that American second earners bring in has been gobbled up, in practice, by zero-sum competition for educational opportunities expressed as either skyrocketed prices for houses in good school districts or escalating tuition at public universities.
Last, while the addition of the second earner has not brought in much gain, it has created an increase in downside risk by eliminating an implicit insurance policy that families used to rely on.

This last point is really the key to Warren’s specific argument about bankruptcy, though it’s the first two that would drive her larger interest in politics. Bad things have always happened to families from time to time. In a traditional two-parent, one-earner family, there was always the possibility that mom could step up and help out when trouble arose.

The “two-income trap,” as described by Warren, really consists of three partially separate phenomena that have arisen as families have come to rely on two working adults to make ends meet:

The addition of a second earner means, in practice, a big increase in household fixed expenses for things like child care and commuting.

Much of the money that American second earners bring in has been gobbled up, in practice, by zero-sum competition for educational opportunities expressed as either skyrocketed prices for houses in good school districts or escalating tuition at public universities.

Last, while the addition of the second earner has not brought in much gain, it has created an increase in downside risk by eliminating an implicit insurance policy that families used to rely on.

This last point is really the key to Warren’s specific argument about bankruptcy, though it’s the first two that would drive her larger interest in politics. Bad things have always happened to families from time to time. In a traditional two-parent, one-earner family, there was always the possibility that mom could step up and help out when trouble arose...."...

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