INDICATOR: March Existing Home Sales
KEY DATA: Sales: down 0.6%; Year-over-Year: up 10.3%; Median Prices (Year-over-Year): up 11.8%
IN A NUTSHELL: “Home prices are soaring even as sales are stagnating.”
WHAT IT MEANS: Existing home sales eased a touch in March as the demand for housing seems to have plateaued. That is true for both single-family and condo units. For the past five months, sales have ranged between 4.90 million units annualized and 4.96 million units, a very tight shot pattern. Sales were flat in the Northeast, up modestly in the Midwest and down modestly in the South and West. In other words, not a whole lot of changes were going on. In part, that may be due to the relatively modest level of inventory on the market, which is helping drive up the price of houses. The increase over the year was the largest since November 2005. The jump in prices, though, may be having the desired effect on supply. After having bottomed in January, inventories have increased over nine percent in the past two months. With the big sales period starting and with more people seeing that they just might be able to sell their homes for a decent price, I expect that the number of houses being listed should continue to increase. As for distressed homes, they were the smallest percentage of sales since the National Association of Realtors started following that number. That is good news as it indicates that the market is moving back toward more typical buyers and sellers and is less dependent upon investors.